MPM.L Regulatory News (MPM)

3 Dec 2007 07:00

Minster Pharmaceuticals PLC03 December 2007 For Immediate Release 3 December 2007 MINSTER PHARMACEUTICALS PLC ("Minster" or "the Company") Interim Results for the six months ended 30 September 2007 Minster Pharmaceuticals plc (AIM: MPM), the drug development companyspecialising in neurological and psychiatric disorders, is pleased to announceits interim results for the six months ended 30 September 2007. Highlights: • Start of Phase IIb TEMPUS study of tonabersat in the prevention of migraine to include 500 patients in the US and Canada • Successful £17 million secondary fundraising in March 2007, bringing in key US investors including Care Capital and Rho Capital • Pre-tax loss of £2.3 million (H1 2006: £1.3m loss), reflecting increased momentum in the Company's clinical trials • Strong balance sheet with net cash of £14.5 million at the balance sheet date (30 September 2006: £790,000) Paul Sharpe, Minster Pharmaceuticals' Chief Executive, said: "The Company has entered an exciting stage in its development with the start ofthe TEMPUS study in the US. The market for the prevention of migraine is growingvery rapidly giving us confidence that our strategy for the commercialisation oftonabersat has the potential to create significant value for shareholders.Migraine remains an under-diagnosed and under-treated condition, reflecting thepaucity of effective treatments on the market and in turn creating theopportunity for tonabersat to transform the lives of migraine sufferers." - ENDS - For further information: Minster Pharmaceuticals plc Tel: +44 (0) 1799 506623Paul Sharpe, Chief Executive OfficerRobert Aubrey, Chief Financial Officer Buchanan Communications Tel: +44 (0) 20 7466 5000Mark Court/ Rebecca Skye Dietrich Nomura Code Securities Limited Tel: +44 (0) 20 7776 1200Richard Potts / Gerard Harper CHAIRMAN'S AND CHIEF EXECUTIVE'S JOINT REVIEW The six months to 30 September 2007 were another period of continued progress atMinster Pharmaceuticals. In March 2007 we achieved a significant fundraising of £17m before expenses,which has given us the balance sheet strength to accelerate the development ofour lead compound, tonabersat, for the prevention of migraine. As a result of this fundraising, we were delighted to welcome to our shareholderregister two prominent specialist healthcare investors from the US: Care Capitaland Rho Capital. Their enthusiasm for investing in Minster is in part areflection of the much greater awareness in the US of the opportunity presentedby the prevention of migraine. In addition, Jan Leschly, the Chairman of CareCapital and the former Chief Executive of SmithKline Beecham, has an in-depthknowledge of tonabersat, as the compound was initially developed at SmithKlineBeecham. We were also pleased to welcome a number of UK-based institutionalinvestors. It was gratifying to see that the results of our Phase IIa trial of tonabersatin the prevention of migraine gave investors the confidence to contribute to thefundraising in a significant way. Prof. Peter Goadsby, the lead investigator inour Phase IIa trial and a world authority on headache, was invited to presentthe trial results to the American Headache Society annual convention in Chicagoand to the Congress of the International Headache Society in Stockholm. Bothpresentations took place in June and were an excellent opportunity tocommunicate the progress the Company has made in developing tonabersat for theprevention of migraine. The market for migraine management and prevention is changing dramatically. Itis being increasingly recognised in the medical profession and within the widercommunity that for many sufferers migraine is a debilitating disease with severesocial and economic consequences. Taking medication to deal with establishedheadache is ineffective for the treatment of all of the symptoms of migraine.Migraineurs are looking for treatments which reduce the frequency of attacksallowing them to lead more normal lives and increasing their confidence to dealwith the demands of the workplace and home. Shortly after the period end, the Company's TEMPUS study (Tonabersat Evaluationin Migraine Prevention in the United States) commenced. TEMPUS is a phase IIbtrial of tonabersat consisting of a dose ranging study in 500 patients in the USand Canada. The primary endpoint of the TEMPUS study, which is expected to report in Q42008, is the reduction in the number of migraine attacks that patients sufferduring the last 8 weeks of a 20 week treatment period. The treatment period inthe TEMPUS study is significantly longer than the 12 week treatment period inthe earlier Phase IIa trial as the earlier trial showed that tonabersat was mosteffective towards the end of the 12 week period, indicating that it takes sometime for the optimal therapeutic effect to be manifested. The TEMPUS study willalso take advantage of the good tolerability profile of tonabersat seen in theprevious study to explore the effects of increasing the dose. The Company has continued to develop its links with key academic centres in theUnited States. The resulting collaborations are expected to provide importantinsights into tonabersat's mechanism of action in the context of therapidly-developing scientific understanding of the changes in brain functionunderlying migraine attacks. The first results from these collaborations areexpected to be available during 2008. Financials The unaudited loss after taxation for the six months ended 30 September 2007amounted to £2,170,000 (2006: £1,184,000) and is in line with management'sexpectations. The Group's cash and cash equivalents at 30 September 2007amounted to £14,484,000 (2006: £790,000). Outlook The Company has entered an exciting stage in its development with the start ofthe TEMPUS study in the US. The market for the prevention of migraine is growingrapidly giving us confidence that our strategy for the commercialisation oftonabersat has the potential to create significant value for shareholders.Migraine remains an under-diagnosed and under-treated condition, reflecting thepaucity of effective treatments on the market and, in turn, creating theopportunity for tonabersat to transform the lives of migraine sufferers. John Russell, Chairman Paul Sharpe, Chief Executive Officer 3 December 2007 Unaudited Consolidated Income StatementFor the six months ending 30 September 2007 6 months to 6 months to 12 months to 30 September 30 September 31 March 2007 2006 2007 £ £ £ Revenue - - - Research expenses (1,952,568) (611,287) (1,222,170) Administrative expensesNon-recurring professional fees - - (237,024)Other expenses (779,167) (664,369) (711,626) (779,167) (664,369) (948,650) Operating loss (2,731,735) (1,275,656) (2,170,820) Interest receivable 424,191 24,469 47,676 Loss on ordinary activities before taxation (2,307,544) (1,251,187) (2,123,144) Taxation on the results for the period 137,881 67,597 152,880 Loss on ordinary activities after taxation (2,169,663) (1,183,590) (1,970,264) Loss per shareBasic per share £0.037 £0.038 £0.062Fully diluted per share £0.027 £0.026 £0.042 Unaudited Consolidated Balance SheetAt 30 September 2007 30 Sept 2007 30 Sept 2006 31 Mar 2007 £ £ £Non-current assetsIntangible assets 12,397,754 12,397,754 12,397,754Plant and equipment 9,704 2,956 2,336 12,407,458 12,400,710 12,400,090 Current assetsTrade and other receivables 483,039 342,145 347,478Cash and cash equivalents 14,483,905 790,517 16,492,022 14,966,944 1,132,662 16,839,500 Total assets 27,374,402 13,533,372 29,239,590 Current liabilitiesTrade and other payables (620,469) (452,058) (360,232) Non-current liabilitiesUnsecured convertible loan notes - (90,000) (90,000)Provisions (4,630) - (15,854) Total liabilities (625,099) (542,058) (466,086) Net assets 26,749,303 12,991,314 28,773,504 Shareholders equityShare capital 2,945,066 1,563,286 2,918,978Share premium 26,071,250 10,797,155 26,007,337Capital reserve 4,837,500 4,837,500 4,837,500Special reserve - 54,572 -Retained earnings (7,104,513) (4,261,199) (4,990,311) Total shareholders' equity 26,749,303 12,991,314 28,773,504 Unaudited Consolidated Cash Flow StatementFor the six months ending 30 September 2007 6 months to 6 months to 12 months to 30 September 30 September 31 March 2007 2006 2007 £ £ £Reconciliation of operating loss to net cash outflow fromoperating activitiesOperating loss before taxation (2,731,735) (1,275,656) (2,170,820)Professional fees written off against share premium - - (1,034,125)Depreciation charges 1,079 675 1,295Potential national insurance liability on unapproved warrants (11,224) - (14,668)and share optionsEquity settled share options 55,462 - 33,512Change in receivables (7,623) 30,290 (23,711)Change in payables 260,237 237,428 145,402 Cash outflow from operating activities (2,433,804) (1,007,263) (3,063,115) Cash flow statementCash flows from operating activitiesCash outflow from operating activities (2,433,804) (1,007,263) (3,063,115)Interest received 434,134 24,469 47,676Taxation received - 8,158 142,308 Net cash outflow from operating activities (1,999,670) (974,636) (2,873,131) Cash flows from investing activitiesPurchase of plant and equipment (8,447) (1,573) (1,573) Cash flows from financing activitiesIssue of equity share capital - - 17,600,000 Net (decrease)/increase in cash & cash equivalents (2,008,117) (976,209) 14,725,296 Cash and cash equivalents at beginning of period 16,492,022 1,766,726 1,766,726 Cash and cash equivalents at end of period 14,483,905 790,517 16,492,022 Notes to the Interim Report 1. Publication of non-statutory accounts i) The interim financial information for the six months ended 30September 2007 includes the results of Minster Pharmaceuticals plc and itssubsidiary Minster Research Limited. The unaudited results for the period havebeen prepared on the basis of the accounting policies adopted in the auditedaccounts for the year ended 31 March 2007, as amended as a result of the firsttime adoption of International Financial Reporting Standards (IFRS) - see notes2 and 3 below. ii) The unaudited profit and loss account for the six month period to 30September 2007 and the unaudited balance sheet as at 30 September 2007 do notamount to full accounts within the meaning of Section 240 of the Companies Act1985 and have not been delivered to the Registrar of Companies. The InterimReport is unaudited and does not constitute Statutory Accounts. iii) No dividend is proposed to be paid in respect of the period(period to 30 September 2006 and year to 31 March 2007 - Nil). iv) The Interim Statement is available on the Company's websiteat www.minsterpharma.com and in printed form from the Company's RegisteredOffice at Audley End Business Centre, London Road, Wendens Ambo, Saffron Walden,Essex, CB11 4JL, UK. 2. Basis of preparation These consolidated interim financial statements are for the six months ended 30September 2007 and are prepared under the recognition and measurement rules ofIFRS 1. They have been prepared in accordance with the requirements of IFRS 1 "First-time Adoption of International Financial Reporting Standards" relevant tointerim reports, because they are part of the period covered by the Group'sfirst IFRS financial statements for the year ended 31 March 2008. They do notinclude all the information required for full annual financial statements, andshould be read in conjunction with the consolidated financial statements of theGroup for the year ended 31 March 2007. These consolidated interim financial statements have been prepared in accordancewith the accounting policies set out below which are based on the recognitionand measurement principles of IFRS 1 in issue as adopted by the European Union(EU) and are effective at 31 March 2008, our first annual reporting date atwhich we are required to use IFRS accounting standards adopted by the EU. Minster Pharmaceutical plc's consolidated financial statements were prepared inaccordance with United Kingdom Accounting Standards (United Kingdom GenerallyAccepted Accounting Practice) until 31 March 2007. The date of transition toIFRS was 1 April 2007. The comparative figures in respect of 30 September 2006and 31 March 2007 have been restated to reflect changes in accounting policiesas a result of adoption of IFRS. The revised policies are listed in note 3below, and their financial effects are listed in note 4 below. 3. Summary of significant accounting policies The financial statements have been prepared under the historical cost conventionand in accordance with applicable accounting standards. Basis of consolidation The financial statements consolidate the financial statements of MinsterPharmaceuticals plc and its subsidiary. Plant and equipment Plant and equipment is included at cost, net of depreciation and any provisionfor impairment. Depreciation has been provided on the straight-line basis on allplant and equipment assets in order to write off the assets over their estimateduseful lives, which are: Computer equipment 3 years Other office equipment 4 years Intangible assets Intellectual property rights, patents and licences are included at fair valueand amortised over their useful economic lives once each asset is brought intouse to generate income for the Group. Up to that point in time, the carryingvalue of each asset is reviewed annually for impairment. Deferred taxation Full provision is made for deferred taxation arising from timing differencesbetween the recognition of gains and losses in the financial statements andtheir recognition for tax purposes. Deferred tax assets are recognised to theextent that it is more likely than not that they will be recovered. Research and development Research and development costs are charged to the profit and loss account in theyear in which they occur. Foreign currencies Transactions in foreign currencies are recorded at the rate ruling at the dateof the transaction. Monetary assets and liabilities denominated in foreigncurrencies are translated at the rate of exchange ruling at the balance sheetdate. All differences are taken to the profit and loss account. Pensions Pension contributions to a group stakeholder pension plan in respect of certaindirectors and employees are charged to profit and loss account as incurred. Operating leases Rentals applicable to operating leases, where substantially all the benefits andrisks of ownership remain with the lessor, are charged to profit and lossaccount as incurred. Share based incentives Incentives in the form of share options are provided to certain directors andemployees and are measured at fair value at the date of grant. The fair valueof the services is charged as an expense on a straight line basis over theperiod during which the services are provided after making allowance for theproportion of options expected to be exercised. The fair value of the optionsgranted is computed using the Black-Scholes model taking into account theparticular circumstances of the Group. 4. Reconciliation of changes to prior periods on adoption of IFRS As explained in note 2, these are the Group's first interim financial statementsprepared in accordance with International Financial Reporting Standards. Thishas required a reappraisal of the accounting treatment of the formation of thepresent group structure, which arose on 25 January 2005 with the combination ofthe Company with its subsidiary. Previously, under UK Generally Accepted Accounting Practice, the excess of thefair value of the consideration given over the fair value of the net assetsacquired was capitalised as goodwill arising on consolidation and amortised on astraight line basis over its estimated useful economic life, which was estimatedto be 20 years. Under IFRS 3, intangible assets acquired as part of that business combinationare separately recognised provided they meet the criteria specified in IAS 38,Intangible Assets. In the opinion of the Directors, the excess of the fairvalue of the consideration given over the fair value of the assets acquired waswholly attributable to the value of intellectual property rights and licencesowned by the subsidiary, Minster Research Limited. Under IFRS 38, these assetshave been included in the financial statements as intangible assets with effectfrom the date of formation of the Group. The Group has adopted a new accounting policy in respect of the amortisation ofthese intangible assets under which they are amortised over their usefuleconomic lives once such assets are brought into use to generate income for theGroup. Up to that point in time, the carrying value of each asset is reviewedannually for impairment. The effect of the introduction of IFRS is, therefore, to re-classify goodwill asan intangible asset comprising the value of intellectual property rights andlicences, with a consequent write back to reserves of all amortisationpreviously charged in financial statements up until 31 March 2007, as set outbelow: 31 March 30 September 1 April 2007 2006 2006 £ £ £ Equity previously reported under UK GAAP 27,476,450 12,004,204 13,497,738 Write back amortisation of non-current assets 1,297,054 987,110 677,166 Equity as reported under IFRS 28,773,504 12,991,314 14,174,904 Loss reported under UK GAAP (2,590,152) (1,493,334) Write back amortisation of non-current assets 619,888 309,744 Loss as reported under IFRS (1,970,264) (1,183,590) 5. Statement of changes in equity 6 months to 30 6 months to 30 12 months to 31 September September March 2007 2006 2007 £ £ £ Equity shareholders' funds brought forward 28,773,504 14,174,904 14,174,904Loss for the year (2,169,663) (1,183,590) (1,970,264)New share capital subscribed 90,000 - 16,565,874Effect of share-based payment charge 55,462 - 17,658Special reserve adjustment - - (14,668) Equity shareholders' funds carried forward 26,749,303 12,991,314 28,773,504 6. Loss per share The calculation of loss per share is based on the following information: 6 months to 30 6 months to 30 12 months to 31 September 2007 September 2006 March 2007 Loss attributable to shareholders £2,169,663 £1,183,590 £1,970,264Average number of shares (basic) 58,874,386 31,265,727 31,981,698Average number of shares (diluted) 81,153,859 45,809,466 46,810,292 The calculation of the loss per share is based on the loss after taxation andthe average of the ordinary shares of 5p in issue during the period. For the diluted loss per share, the average number of ordinary shares in issueis adjusted to assume conversion of all dilutive potential ordinary shares. TheGroup has share options, warrants and shares to be issued as secondaryconsideration in respect of the subsidiary acquired during the period ended 31March 2005 as potentially dilutive. Independent Review Report to Minster Pharmaceuticals PLC Introduction We have been instructed by the company to review the financial information forthe six months ended 30 September 2007, which comprises the consolidated incomestatement, the consolidated balance sheet, the consolidated cash flow statementand notes 1 to 6. We have read the other information contained in the interimreport, which comprises only the chairman's and chief executive's statements,and considered whether it contains any apparent misstatements or materialinconsistencies with the financial information. Our responsibilities do notextend to any other information. This report is made solely to the company, in accordance with guidance containedin APB Bulletin 1999/4 "Review of Interim Financial Information". Our reviewwork has been undertaken so that we might state to the company those matters weare required to state to it in a review report and for no other purpose. To thefullest extent permitted by law, we do not accept or assume responsibility toanyone other than the company, for our review work, for this report or for theconclusions we have formed. Directors' responsibilities The interim report, including the financial information contained therein, isthe responsibility of, and has been approved by the directors. They areresponsible for preparing the interim report and ensuring that the accountingpolicies and presentation applied to the interim figures are consistent withthose that will be applied in preparing the next annual accounts, having regardto the accounting standards applicable to those accounts. Review work performed We conducted our review in accordance with guidance contained in APB Bulletin1999/4 "Review of Interim Financial Information" issued by the AuditingPractices Board for use in the United Kingdom. A review consists principally ofmaking enquiries of management and applying analytical procedures to thefinancial information and underlying financial data and, based thereon,assessing whether the accounting policies and presentation have beenconsistently applied unless otherwise disclosed. A review excludes auditprocedures such as tests of controls and verification of assets, liabilities andtransactions. It is substantially less in scope than an audit performed inaccordance with International Standards on Auditing (UK and Ireland) andtherefore provides a lower level of assurance than an audit. Accordingly, we donot express an audit opinion on the financial information. Review conclusion On the basis of our review we are not aware of any material modifications thatshould be made to the financial information as presented for the six monthsended 30 September 2007. Peters Elworthy and MooreChartered Accountants 3 December 2007 This information is provided by RNS The company news service from the London Stock Exchange