20 Nov 2009 07:00
| For immediate release | 20 November 2009 |
MINSTER PHARMACEUTICALS PLC
("Minster" or "the Company")
Interim Results for the six months ended 30 September 2009
Minster Pharmaceuticals plc (AIM: MPM), the drug development company specialising in neurological and psychiatric disorders, is pleased to announce its results for the six months ended 30 September 2009.
Highlights in the year to date:
H1 2009 pre-tax loss of £927,464 (H1 2008: £3,629,695)
Substantial reduction during H1 of £250,000 in annual operating cost base
Cash and cash equivalents of £4,839,738 (H1 2008: £9,009,917)
Decision to focus on sabcomeline for treatment of cognitive decline in schizophrenia and to seek a partner to pursue tonabersat's further development
Currently finalising the development plan for sabcomeline
John Russell, Minster Pharmaceuticals' Chairman and Interim CEO, said:
"We have decided to seek a partner to pursue tonabersat's further development and to focus our clinical work on sabcomeline. We remain in a strong financial position, having substantially reduced operating expenditure to achieve savings of £250,000 a year. At the completion of the half year, we had cash and cash equivalents of £4.8 million. We continue to explore all options to generate value for shareholders."
For further information:
| Minster Pharmaceuticals plc | |
| John Russell, Chairman and Interim CEO | |
| Karl Keegan, Chief Financial Officer | Tel: +44 (0) 20 7936 9921 |
| Buchanan Communications | Tel: +44 (0) 20 7466 5000 |
| Mark Court / Catherine Breen | |
| Nomura Code Securities Limited | Tel: +44 (0) 20 7776 1200 |
| Chris Collins / Richard Potts |
Notes for editors:
About Minster Pharmaceuticals plc
Minster Pharmaceuticals is a drug development company focussed on neurological and psychiatric disorders. Its principal pipeline assets are tonabersat and sabcomeline. Worldwide rights to both compounds were acquired from GlaxoSmithKline and the compounds benefit from comprehensive safety tolerance data as a result of investment by GSK.
Tonabersat is the leading compound in an exciting new class of selective drugs designated as neuronal gap junction blockers. Sabcomeline, a muscarinic partial agonist, has potential in the treatment of cognitive decline in schizophrenia and the strategy for its further clinical development is currently under consideration.
Minster joined the AIM market in February 2005 and trades under the symbol MPM. For further information please visit www.minsterpharma.com.
CHAIRMAN AND INTERIM CEO'S REVIEW
The half year to 30 September 2009 was a period during which we made good progress in evolving our strategy for generating value for shareholders. During the period, we also focused closely on our cost base, making substantial reductions in our operating expenditure to achieve annualised savings of £250,000 a year. At the completion of the half year, we had cash and cash equivalents of £4.8 million.
We enter the current half with a compact and highly experienced operational team of three executives and a full-time consultant. This team is examining the possibilities for maximising the value of our pipeline assets, tonabersat and sabcomeline.
The result of the TEMPUS study of tonabersat in migraine prevention was disappointing, as we stated in February this year. However we remain confident about the long term potential of tonabersat in other indications. Preclinical data suggests strongly that tonabersat could be effective in the treatment of epilepsy and neuropathic pain. We also announced very encouraging results from the Phase II trial of tonabersat in migraine with aura in October 2008.
The result of the TEMPUS study prompted the Board to look closely at the Company's assets in a strategic review focused particularly on the opportunities and costs associated with the development and commercialisation of tonabersat and sabcomeline.
Tonabersat
The Board has concluded that the value of the tonabersat compound will be best exploited in the areas of pain and epilepsy as well as the opportunity in migraine with aura. Owing to the substantial further clinical work required, we have decided to seek a partner to pursue the compound's further development.
We believe that tonabersat is a highly attractive asset to a company with the appropriate resources. It is the most advanced compound in a new class of drugs, known as gap junction blockers. It has also been shown to be safe and well-tolerated in extensive human trials carried out by GlaxoSmithKline, prior to Minster's acquisition of the compound, and in Minster's own studies.
One of the key attractions of tonabersat is that it could have broad utility in a number of neurological conditions. The NINDS (part of the National Institutes of Health in the US) has been investigating tonabersat in its preclinical models of epilepsy and neuropathic pain and is expected to report its data on the profile of the compound in these indications in the near future. Receipt of this data should further the understanding of the compound and assist us in securing an appropriate development and commercialisation partner.
Sabcomeline
During the past few years, our clinical focus has been on tonabersat but we have also been evaluating sabcomeline for the treatment of cognitive decline in schizophrenia.
We have now decided, given the exciting potential of this compound in this serious unmet medical need, to prioritise the development of sabcomeline. We are in the process of finalising a development plan and are considering the most appropriate development or co-development route. The development plan will allow the start of a Phase II proof of concept study in the first half of next year, which would report around nine months later.
Sabcomeline is a functionally selective muscarinic partial agonist, which offers potential in arresting cognitive decline in schizophrenia. In common with tonabersat, sabcomeline benefits from extensive clinical data generated by GlaxoSmithKline indicating that the compound is safe and well-tolerated.
Cognitive decline in schizophrenia has become recognised as an area of major unmet clinical need in the past few years. Atypical neuroleptics and other drugs have been successful in controlling the positive symptoms of schizophrenia but unfortunately are unable to treat cognitive decline, which often begins whilst a schizophrenic is in their 20s and renders them unable to work or to conduct a fulfilling lifestyle. We believe that sabcomeline could be given in combination with currently available atypical neuroleptics to provide a significant improvement in the quality of life of schizophrenia sufferers. In the US there are 1.5 million schizophrenia sufferers, according to the US National Institute of Mental Health.
As an essential step towards the start of the Phase II proof of concept study, Minster has recently completed an in-vitro P-glycoprotein (P-gp) study of sabcomeline. The P-gp study was seeking to identify any adverse effect of sabcomeline on the P-gp transporter enzyme system, which is involved in the passage of drugs through the gut wall and blood-brain barrier, to ensure that no detrimental drug interaction is likely to take place.
This study, which was carried out at a likely clinical plasma concentration and also at higher multiples of that concentration, was successful in that it showed that sabcomeline did not act as a substrate, inhibitor or inducer of the P-gp system.
During the half year, Minster sought to further develop its intellectual property around sabcomeline in cognitive decline in schizophrenia and in July announced the successful filing of a divisional application in the US. Based on an opinion obtained from Minster's US attorney, the Company has confidence that the claims are patentable and should therefore be granted.
Cost base and business development
As part of the strategic review, the Board looked very closely at the Company's cost base and has made substantial reductions in operating costs. In addition to reducing the number of staff and consultants, Minster has closed its Audley End office in Essex and moved to a small serviced office in central London.
As part of the review, the Board also analysed the potential commercial partners for its compounds on a global basis and determined that the UK and mainland Europe should be the focus of its efforts given the development stage of the Company's assets. Minster has therefore curtailed its US business development activities but continues to work closely with US academics and clinicians. Minster's objective is to improve the understanding amongst potential partners of the commercial opportunities which the Company's compounds present and thereby attract the right partnering or collaborative opportunities.
Financial results
The unaudited loss after taxation for the six months ended 30 September 2009 was £927,464 (H1 2008: £3,478,875) and is in line with management's expectations. Cash and cash equivalents at 30 September 2009 were £4,839,738 (H1 2008: £9,009,917).
The loss for the half year has reduced significantly compared with the same period last year as a direct result of finishing the TEMPUS trial. Furthermore, given that the trial was not successful, we have been able to release accruals relating to this trial, resulting in a positive figure for research expenses in the first half year.
Outlook
Minster is making good progress in defining its strategy to unlock the value in its two compounds, tonabersat and sabcomeline.
The Company has decided to find a partner for the further development of tonabersat, which has potential in multiple neurological indications, and is preparing sabcomeline for a Phase II proof of concept study in the treatment of cognitive decline in schizophrenia, a condition of high unmet medical need.
The Board of Minster is focused on exploring all options to generate value for shareholders.
John Russell
Chairman and Interim CEO
20 November 2009
Unaudited Condensed Consolidated Statement of Comprehensive Income
For the six months ending 30 September 2009
| 6 months to | 6 months to | 12 months to | |
| 30 September 2009 | 30 September 2008 | 31 March 2009 | |
| £ | £ | £ | |
| Revenue | - | - | - |
| Research expenses | 79,045 | (3,078,550) | (6,195,211) |
| Administrative expenses | (795,399) | (1,238,688) | (2,109,744) |
| (Losses) / gains on foreign exchange | (225,130) | 472,489 | 1,368,790 |
| Operating loss | (941,484) | (3,844,749) | (6,936,165) |
| Interest receivable | 14,020 | 215,054 | 297,193 |
| Loss before taxation | (927,464) | (3,629,695) | (6,638,972) |
| Taxation on the results for the period | - | 150,820 | 326,641 |
| Loss for the period after taxation | (927,464) | (3,478,875) | (6,312,331) |
| Total comprehensive income for the period | (927,464) | (3,478,875) | (6,312,331) |
| Loss per share | |||
| Basic per share | £0.016 | £0.059 | £0.107 |
| Fully diluted per share | £0.013 | £0.048 | £0.088 |
Unaudited Consolidated Statement of Changes in Equity
For the six months ending 30 September 2009
| 6 months to | 6 months to | 12 months to | |
| 30 September 2009 | 30 September 2008 | 31 March 2009 | |
| £ | £ | £ | |
| Equity shareholders' funds brought forward | 18,238,499 | 24,407,992 | 24,407,992 |
| Total comprehensive income for the period | (927,464) | (3,478,875) | (6,312,331) |
| Effect of share-based payment charge | 74,169 | 70,761 | 142,838 |
| Equity shareholders' funds carried forward | 17,385,204 | 20,999,878 | 18,238,499 |
Unaudited Consolidated Statement of Financial Position
At 30 September 2009
| 30 September 2009 | 30 September 2008 | 31 March 2009 | |
| £ | £ | £ | |
| Non-current assets | |||
| Intangible assets | 12,397,754 | 12,397,754 | 12,397,754 |
| Property, plant and equipment | 7,310 | 8,276 | 6,999 |
| 12,405,064 | 12,406,030 | 12,404,753 | |
| Current assets | |||
| Trade and other receivables | 270,049 | 180,888 | 114,989 |
| Current tax assets | - | 150,820 | 326,641 |
| Cash and cash equivalents | 4,839,738 | 9,009,917 | 6,341,650 |
| 5,109,787 | 9,341,625 | 6,783,280 | |
| Total assets | 17,514,851 | 21,747,655 | 19,188,033 |
| Current liabilities | |||
| Trade and other payables | (129,647) | (747,284) | (949,534) |
| Non-current liabilities | |||
| Provisions | - | (493) | - |
| Total liabilities | (129,647) | (747,777) | (949,534) |
| Net assets | 17,385,204 | 20,999,878 | 18,238,499 |
| Shareholders' equity | |||
| Share capital | 2,945,066 | 2,945,066 | 2,945,066 |
| Share premium | 26,071,249 | 26,071,249 | 26,071,249 |
| Capital reserve | 4,837,500 | 4,837,500 | 4,837,500 |
| Retained losses | (16,468,611) | (12,853,937) | (15,615,316) |
| Total shareholders' equity | 17,385,204 | 20,999,878 | 18,238,499 |
Unaudited Consolidated Statement of Cash Flows
For the six months ending 30 September 2009
| 6 months to | 6 months to | 12 months to | |
| 30 September 2009 | 30 September 2008 | 31 March 2009 | |
| £ | £ | £ | |
| Reconciliation of operating loss to net cash outflow from operating activities | |||
| Operating loss before taxation and interest | (941,484) | (3,844,749) | (6,936,165) |
| Depreciation charges | 1,906 | 1,613 | 3,300 |
| Potential national insurance liability on unapproved warrants and share options | - | - | (493) |
| Loss on disposal of property, plant and equipment | - | 70 | 70 |
| Equity settled share options | 74,169 | 70,761 | 142,838 |
| Change in receivables | (155,060) | (17,470) | 48,429 |
| Change in payables | (819,888) | 298,023 | 500,273 |
| Cash outflow from operating activities | (1,840,357) | (3,491,752) | (6,241,748) |
| Cash flow statement | |||
| Cash flows from operating activities | |||
| Cash outflow from operating activities | (1,840,357) | (3,491,752) | (6,241,748) |
| Interest received | 14,020 | 215,054 | 297,193 |
| Taxation received | 326,641 | 443,383 | 443,382 |
| Net cash outflow from operating activities | (1,499,696) | (2,833,315) | (5,501,173) |
| Cash flows from investing activities | |||
| Purchase of plant and equipment | (2,216) | (1,490) | (1,899) |
| Net (decrease)/increase in cash and cash equivalents | (1,501,912) | (2,834,805) | (5,503,072) |
| Cash and cash equivalents at beginning of period | 6,341,650 | 11,844,722 | 11,844,722 |
| Cash and cash equivalents at end of period | 4,839,738 | 9,009,917 | 6,341,650 |
Notes to the Interim Report
| 1. | Publication of non-statutory accounts |
| i) | The interim financial information for the six months ended 30 September 2009 includes the results of Minster Pharmaceuticals plc and its subsidiary Minster Research Limited. |
| ii) | The unaudited income statement for the six month period to 30 September 2009 and the unaudited balance sheet as at 30 September 2009 do not amount to full accounts within the meaning of Section 435 of the Companies Act 2006 and have not been delivered to the Registrar of Companies. The Interim Report is unaudited and does not constitute Statutory Accounts. |
| The Group statutory accounts for the year ended 31 March 2009 have been filed with the Registrar of Companies and are available on the Company's website at www.minsterpharma.com and in printed form from the Company's Registered Office at Salisbury House, Station Road, Cambridge, Cambridgeshire, CB1 2LA. The auditors' report on these financial statements was unqualified. | |
| iii) | The Interim Statement is available on the Company's website at www.minsterpharma.com and in printed form from the Company's Registered Office at Salisbury House, Station Road, Cambridge, Cambridgeshire, CB1 2LA. |
| 2. | Basis of preparation |
| These consolidated interim financial statements are for the six months ended 30 September 2009 and are prepared in accordance with IFRS as adopted by the European Union on the historical cost basis. They do not include all the information required for full annual financial statements, and should be read in conjunction with the consolidated financial statements of the Group for the year ended 31 March 2009 which have been prepared in accordance with IFRS as adopted by the European Union. | |
| The unaudited interim financial statements have been prepared on the basis of the accounting policies adopted in the audited accounts for the year ended 31 March 2009. | |
| 3. | Loss per share |
The calculation of loss per share is based on the following information:
| 6 months to | 6 months to | 12 months to | |
| 30 September 2009 | 30 September 2008 | 31 March 2009 | |
| Loss attributable to shareholders | £927,464 | £3,478,875 | £6,312,331 |
| Weighted average number of shares (basic) | 58,901,312 | 58,901,312 | 58,901,312 |
| Weighted average number of shares (diluted) | 71,801,312 | 71,801,312 | 71,801,312 |
The calculation of the basic and fully diluted loss per share as set out in the condensed consolidated statement of comprehensive income is based on the loss after taxation and basic and diluted weighted average number of shares set out above.
The weighted average number of shares of 5p (diluted) is calculated to assume conversion of all shares to be issued as secondary consideration and those options and warrants where the exercise price is below the mid-market price of the Ordinary shares at the period end.