30 Sep 2008 07:00
| For Immediate Release | 30 September 2008 |
Plethora Solutions Holdings PLC (AIM:PLE)
Interim Results for the six months ended 30 June 2008
Highlights
Significant progression towards a commercial stage business to exploit late stage clinical development programmes.
Male Health Portfolio:
Product sales in H1 2008 increased 10% to $6m compared with H1 2007
Completion of European Phase III study of PSD502 for the treatment of premature ejaculation
Invicorp® (PSD510) - filed for orphan drug designation in the USA
Manufacturing partners in place for commercialisation of Invicorp®
Female Health Portfolio:
Positive clinical data from a PSD506 incontinence dose escalation study: Indication of clinical efficacy together with no evidence of dry mouth
Completion of patient recruitment into a Phase IIb study in dysmenorrhoea (PSD508)
Company focus now on out-licensing Phase II development programmes with no further material development cost
Financial
Group recognised revenues increase 18% to £3.3m (H1 2007: £2.8m)
Receipt of $15m under $25m revenue interest financing agreement with Paul Capital Healthcare
Cash at 30th June 2008 of £2m (£7.5m at 30th June 2007)
Post Balance Sheet Event: Additional financing of up to £1.3m (net of expenses) provided by Paul Capital Healthcare, Merlin Biosciences Fund III and ETV Capital S.A.
Dr Steven Powell, CEO said:
"Plethora has continued to deliver a flow of positive clinical data in the first half of the year. Despite the challenging financial climate, the $25m financing agreement concluded with Paul Capital in March 2008 provided a significant endorsement of the Plethora assets. It has also positioned the Company to accelerate the commercialisation of our assets in both our male and female product portfolios and we look forward to the second half of the year, where we will continue our transition from a development company to a commercial business with revenue streams derived from our male health sales operation in the USA and potential licensing income from the multiple programmes currently in clinical development."
For further information contact:
| Plethora Solutions Steven Powell | Tel : 020 3077 5400 |
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| FinnCap Geoff Nash | Tel : 020 7600 1658 |
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| City/Financial Enquiries Hansard John Bick | Tel : 020 7245 1100 |
About Plethora:
Plethora is focused on the development and marketing of products for the treatment of urological disorders. The Company has products in clinical development for the treatment of overactive bladder, stress urinary incontinence, interstitial cystitis, gynaecological pain, erectile dysfunction and premature ejaculation. Plethora has a Minneapolis, USA based subsidiary, Timm Medical Technologies Inc, which markets products for the treatment of erectile dysfunction (ED) to urology clinics through a US-based specialist sales team. The Company is headquartered in the UK and is listed on the London Stock Exchange's AIM (AIM ticker: PLE). Further information is available at www.plethorasolutions.co.uk
Chairman and Chief Executive's Statement
The first half of the year saw continued progress towards the transformation of Plethora from a product development company to a sales and marketing led business. Our main focus during the period has been on progressing the PSD502 premature ejaculation Phase III studies and conclusion of the Phase II programmes in our female health portfolio.
Completion of the European Phase III study for PSD502 for premature ejaculation, as announced today, is a major milestone for the Company and results of the European study are expected to be to be available towards the end of the year. Recruitment continues in the US arm of the PSD502 Phase III study, where the FDA has agreed to our recent actions for accelerating and closing recruitment. Our aim will be to combine the data from the two studies for submission for regulatory approval in the US and Europe in the first half of 2009. Licensing discussions are ongoing with a number of potential partners for PSD502 outside of the USA.
Commercial Strategy
We have divided our development portfolio into two groups, each with a defined and distinct commercial strategy.
For the male health portfolio, we will retain value in the US market by utilising our existing sales and marketing operation while offsetting commercial risk internationally through partnering. Consequently, in the USA we will continue to pursue direct sales of ErecAid® and PSD510, once launched, and will co-promote PSD502 with our partner, Sciele Pharma, Inc. We intend to license out rights to PSD502 for premature ejaculation and non-urology indications in geographic territories outside of the USA in exchange for milestone and royalty payments.
For the female health portfolio we will seek licensing partners for the four Phase II programmes now that we have attained positive Phase II or proof-of-concept data for each of these.
Male Health:
Plethora is developing products for the treatment of male sexual dysfunction in the form of erectile dysfunction and the unmet medical need of premature ejaculation. The product portfolio encompasses both marketed products and products in late stage clinical development.
Timm Medical, ErecAid®
Plethora markets a range of Vacuum Erection Devices (VEDs) through its US subsidiary, Timm Medical Technologies Inc., for the treatment of erectile dysfunction (ED). Products are marketed in the USA via a sales force calling on specialist urology clinics.
In the first half of 2008, Timm Medical delivered sales of $6.0m (H1 2007: $5.46m), a 10% increase. This was achieved through the continued demonstration of the safety and clinical efficacy of ErecAid® in patients post radical prostatectomy. We expect that sales growth will continue as we also begin to target the area of failed medical management, primarily for diabetes patients and other patient populations refractory to oral drug therapy.
The Timm Medical operation provides a platform for further development of our business with the potential to share in the future value of PSD502 in the USA if Plethora exercises its co-promotion option within the US license granted to Sciele Pharma Inc. Timm Medical will also provide a sales and marketing platform for PSD510 in the USA once approved.
PSD502 for Treatment of Premature Ejaculation
PSD502 commenced its Phase III study recruitment in the EU and the USA in Q4 2007. In June 2008 we announced the completion of recruitment into the European arm of the study. The Company has announced today that the European Phase III study is now complete and will report its results later this year. Recruitment into the US arm of the study has proceeded at a slower rate, but recent discussions with the FDA have led to protocol changes that will accelerate recruitment.
PSD502 also has a potential secondary application as a treatment for wound pain and this could deliver significant additional value via a licensing agreement with a commercial partner.
With the completion of the European PSD502 study for premature ejaculation, the pace of discussions to out-license PSD502 for territories outside of the USA has increased. It is intended that a successful licensing deal would be on terms at least as favourable as that negotiated with Sciele Pharma for the USA rights, with milestone payments and royalties.
PSD510 (Invicorp®) for Treatment of ED
Invicorp® is a non-oral treatment for erectile dysfunction. Phase II and III studies with the product have shown that, in contrast to some current, marketed non-oral therapeutics where pain is a common adverse event experienced by more than 30% of users, the reported incidence of pain associated with Invicorp® in clinical studies to date is substantially less with fewer other side effects. Following discussions with the US Food & Drug Administration (FDA), Plethora will initiate the final component of the North American clinical development programme for Invicorp®, a Phase III programme, at up to 30 sites in the USA. The Company also filed for Orphan Drug Status in the USA in September. This will provide additional market exclusivity and potentially accelerate regulatory filing.
Female Health:
Plethora's development activities in female health are focussed on the development of products for the treatment of urinary incontinence and gynaecological pain. Both clinical fields encompass substantial patient populations and poorly met clinical needs. To date, positive clinical data have been reported on three of the four female health programmes and consequently, in accordance with our strategy, we are engaging in a dialogue with multiple potential licensing partners for these programmes. We are awaiting the outcome of the remaining Phase II trial with PSD508.
PSD503: Topical therapy for Stress Urinary Incontinence (SUI)
Plethora has developed PSD503 to provide a viable 'on demand' treatment initially for the treatment of women suffering from mild to moderate SUI. The product has a potential patient population of over 20 million in North America and Western Europe. In November 2007 we reported a positive outcome for a PSD503 Phase II clinical trial and licensing discussions have now been initiated with potential development and commercial partners.
PSD506: An oral treatment for Overactive Bladder (OAB)
In February 2008, Plethora announced positive clinical data from a PSD506 incontinence dose escalation study. The results indicate clinical efficacy at doses equal to or greater than 20 mg, and the drug was well tolerated with no evidence of dry mouth.
PSD597: A treatment for Interstitial Cystitis
PSD597 is a proprietary formulation of a marketed analgesic drug for the treatment of interstitial cystitis and painful bladder syndrome (IC and PBS).
In September 2007 we announced the successful conclusion of a PSD597 Phase II clinical study in North America in patients suffering from interstitial cystitis and painful bladder syndrome. The efficacy of the drug was later confirmed in an extension to the study, where 86% of patients elected to receive the second treatment. These results suggest that the benefits of PSD597 are sustained for a considerable period after treatment and, secondly, confirmed that clinical benefit can be increased with repeated doses. Licensing discussions have now been initiated with potential commercial partners.
PSD508: Dysmenorrhoea
PSD508 is a locally-delivered formulation of a well-characterised non-steroidal anti-inflammatory drug (NSAID) for the treatment of dysmenorrhoea; a painful, often incapacitating, menstrual cramp which afflicts more than 50% of women of reproductive age.
PSD508 entered a Phase IIb study for patients with dysmenorrhoea in December 2007. The study is a double-blind, placebo-controlled, multiple-dose, crossover proof of concept study which compares the efficacy of vaginally delivered PSD508 to that of an oral NSAID and placebo in relieving menstrual-related pain together with safety and tolerability of PSD508. Trial enrolment is complete and data is expected in Q4 2008.
Financial Review
The unaudited financial information for the six months ended 30 June 2008 is prepared in accordance with the Group's accounting policies and is in accordance with International Financial Reporting Standards ("IFRS") as adopted by the European Union.
In the first six months of 2008 the Group recorded revenues of £3.3m (six months ended 30 June 2007: £2.8m); an 18% increase. Sales of £3.0m were recorded in our Timm Medical business in the first six months of 2008 (six months ended June 2007: £2.8m); a 9% increase (10% in US dollars). Revenues of £0.3m (£nil six months ended 30 June 2007) were recorded as the recharge of development costs under the licensing agreement with Sciele Pharma Inc.
The first half of 2008 saw an increase in clinical activity across the portfolio and this has resulted in an increase in development expenditure in the first six months to £4.5m (six months ended June 2007: £3.5m). This reflects progress made in product development, notably with PSD502.
Sales and marketing expenses for the period were £2.4m (six months ended 30 June 2007: £2.0m). The increase of £0.4m relates to continued expansion of the field force and increased marketing spend to drive sales growth.
Other administrative expenses for the period were at £1.3m (six months ended 30 June 2007: £1.1m).
Cash and cash equivalents totalled £2.0m at 30 June 2008 (£7.5m at 30 June 2007). During the six months ended 30 June 2008, we received $15m gross under a revenue interest financing agreement from Paul Capital Healthcare. Net cash received was $10.8m after deduction of $2m (£1m) cash collateral put into escrow, legal and other transaction costs and the first revenue interest payment. Under the agreement with Paul Capital Healthcare, revenue interest will be paid on revenues derived from sales of ErecAid®, PSD502 and PSD510.
Net cash outflow from operating activities for the period was £5.5m (six months ended 30 June 2007: £4.1m). This reflects the increase in product development activity in the first half of 2008 together with increased interest payments.
The condensed financial statements have been prepared on a going concern basis, relying on assumptions about milestone income from future out-licensing of products, together with assumptions about future access to capital and the timing of debt repayments. The out-licensing, financing and debt repayments are, in turn, dependent upon successful data from clinical trials currently in progress. As described in note 3 to the condensed financial statements with respect to the Company's ability to continue as a going concern, those assumptions are subject to material uncertainties.
Financing
The Company announces that it has concluded the terms of an additional financing programme to provide up to a further £1.3 million of usable cash resources. This additional resource will be used for general working capital purposes. The financing has been provided through transactions with each of Paul Capital Healthcare, Merlin Biosciences Fund III and ETV Capital S.A. Full details of this financing are set out in note 2.
Summary and Outlook
With the completion of all of our Phase II female health programmes and the PSD502 Phase III study drawing to a close our remaining development activities are concentrated on PSD502 and PSD 510. Our focus is now on delivering value from the Company' assets via licensing partners and our own, direct sales and marketing activities in the USA. Our objective is to translate the last four years of investment into multiple revenue streams comprising product revenues in the USA balanced by a number of licensing revenue streams and to create a profitable and cash generative specialty pharmaceutical company in the medium term.
Stuart Wallis Steven Powell
Chairman Chief Executive Officer
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Condensed Consolidated Interim Income Statement - Unaudited Six months ended 30 June 2008
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Note | 6 months ended 30 June 2008 | 6 months ended 30 June 2007 | Year ended 31 December 2007 |
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| £'000 | £'000 | £'000 |
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| Revenue | 4 | 3,302 | 2,783 | 5,766 |
| Cost of sales |
| (522) | (390) | (789) |
| Gross profit |
| 2,780 | 2,393 | 4,977 |
| Administrative expenses |
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| - research and development expenses |
| (4,527) | (3,460) | (7,976) |
| - selling and marketing |
| (2,355) | (2,022) | (4,078) |
| - share-based charge |
| (464) | (457) | (736) |
| - other administrative expenses |
| (1,288) | (1,068) | (2,701) |
| - amortisation of intangibles |
| (232) | (232) | (464) |
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| (8,866) | (7,239) | (15,955) |
| Operating loss |
| (6,086) | (4,846) | (10,978) |
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| Finance costs |
| (1,425) | (54) | (484) |
| Finance income |
| 48 | 78 | 220 |
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| Loss for the period before taxation |
| (7,463) | (4,822) | (11,242) |
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| Taxation |
| 802 | 46 | 764 |
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| Loss for the period | 4 | (6,661) | (4,776) | (10,478) |
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| Attributable to equity shareholders |
| (6,661) | (4,776) | (10,478) |
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| Loss per ordinary share (basic & diluted) | 6 | (23.8p) | (18.3p) | (38.4p) |
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Condensed Consolidated Interim Balance Sheet - Unaudited As at 30 June 2008
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At 30 June 2008 |
At 30 June 2007 | At 31 December 2007 |
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| £'000 | £'000 | £'000 |
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| Assets |
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| Non current |
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| Goodwill |
| 1,463 | 1,463 | 1,463 |
| Other intangible assets |
| 3,960 | 4,424 | 4,192 |
| Property, plant and equipment |
| 184 | 193 | 231 |
| Deferred tax |
| 213 | 353 | 213 |
| Long term other receivables |
| 21 | 21 | 24 |
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| 5,841 | 6,454 | 6,123 |
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| Current |
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| Inventory |
| 222 | 290 | 308 |
| Trade and other receivables |
| 1,204 | 693 | 1,303 |
| Corporation tax |
| 763 | - | 632 |
| Cash and Cash equivalents |
| 2,040 | 7,507 | 2,595 |
| Cash in escrow |
| 1,000 | - | - |
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| 5,229 | 8,490 | 4,838 |
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| Total assets |
| 11,070 | 14,944 | 10,961 |
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| Liabilities |
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| Current |
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| Trade and other payables |
| 3,087 | 1,959 | 3,377 |
| Borrowings | 5 | 1,717 | 1,254 | 2,032 |
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| 4,804 | 3,213 | 5,409 |
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| Non-current |
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| Borrowings | 5 | 9,596 | 3,275 | 2,627 |
| Deferred tax provision |
| 1,188 | 1,327 | 1,258 |
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| 10,784 | 4,602 | 3,885 |
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| Total liabilities |
| 15,588 | 7,815 | 9,294 |
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| Net (liabilities)/assets |
| (4,518) | 7,129 | 1,667 |
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| Equity |
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| Share capital |
| 280 | 280 | 280 |
| Share premium |
| 20,103 | 20,153 | 20,103 |
| Other reserves |
| 4,908 | 4,908 | 4,908 |
| Translation reserve |
| (114) | (137) | (126) |
| Share based payment reserve |
| 1,764 | 1,021 | 1,300 |
| Retained loss |
| (31,459) | (19,096) | (24,798) |
| Total equity |
| (4,518) | 7,129 | 1,667 |
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| | Plethora Solutions Condensed Consolidated Interim Cash Flow Statement - Unaudited Six months ended 30 June 2008 | |||
| | | 6 months ended 30 June 2008 | 6 months ended30 June 2007 | Yearended 31 December 2007 |
| | | £'000 | £'000 | £'000 |
| Cash flows from operating activities | | | | |
| Loss after taxation | (6,661) | (4,776) | (10,478) | |
| Finance income | (48) | (78) | (220) | |
| Finance costs | 1,425 | 46 | 484 | |
| Adjustment for foreign exchange | (10) | 3 | (1) | |
| Share based charge | 464 | 457 | 736 | |
| Depreciation of plant and equipment | 55 | 46 | 96 | |
| Amortisation | 232 | 232 | 464 | |
| Change in inventories | 86 | (104) | (122) | |
| Change in trade and other receivables | 99 | (108) | (559) | |
| Change in trade and other payables | (290) | (144) | 1,411 | |
| | Taxation income per income statement | (802) | (46) | (764) |
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| | Cash utilised from operations | (5,450) | (4,472) | (8,953) |
| | Interest paid | (679) | - | (433) |
| | Income taxes received | 601 | 403 | 533 |
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| | Net cash outflows from operating activities | (5,528) | (4,069) | (8,853) |
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| | Cash flows from investing activities | | | |
| | Purchases of property, plant and equipment | (8) | (44) | (128) |
| | Interest received | 48 | 78 | 211 |
| | Net cash from investing activities | 40 | 34 | 83 |
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| | Cash flows from financing activities | | | |
| | Proceeds from issue of shares | - | 4,145 | 4,145 |
| | Repayment of loans | (806) | - | - |
| | Proceeds from issue of loans | 7,500 | 4,000 | 3,873 |
| | Transferred to escrow | (1,000) | - | - |
| | Loan receipt costs | (756) | - | - |
| | Share issue costs | - | (42) | (92) |
| | Net cash from financing activities | 4,938 | 8,103 | 7,926 |
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| | Net increase/(decrease) in cash and cash equivalents | (550) | 4,068 | (844) |
| | Effect of exchange rate changes | (5) | - | - |
| | Cash and cash equivalents at beginning of period | 2,595 | 3,439 | 3,439 |
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| | Cash and cash equivalents at end of period | 2,040 | 7,507 | 2,595 |
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Condensed Consolidated Statement of Changes in Equity - Unaudited Six months ended 30 June 2008
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Share capital | Share premium | Other reserves |
Translation reserve | Share based payment reserve | Profit and loss account | Total |
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| £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | £'000 |
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| Balance at 1 January 2007 |
258 | 16,072 | 4,908 | (113) | 564 | (14,320) | 7,369 |
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| Issue of new shares | 22 | 4,123 | - | - | - | - | 4,145 |
| Cost of issue of new shares | - | (92) | - | - | - | - | (92) |
| Loss for the year | - | - | - |
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| (10,478) | (10,478) |
| Exchange movement | - | - | - | (13) | - | - | (13) |
| Employee share based compensation | - | - | - |
| 736 | - | 736 |
| Balance at 31 December 2007 | 280 | 20,103 | 4,908 | (126) | 1,300 | (24,798) | 1,667 |
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| Loss for the period | - | - | - | - | - | (6,661) | (6,661) |
| Exchange movement | - | - |
| 12 | - | - | 12 |
| Employee share based compensation | - | - | - | - | 464 | - | 464 |
| Balance at 30 June 2008 | 280 | 20,103 | 4,908 | (114) | 1,764 | (31,459) | (4,518) |
Notes to the Condensed Interim Report
Six months ended 30 June 2008
Notes to the Financial Information
1. Basis of Preparation
The interim financial information is unaudited but has been reviewed by the auditors, Grant Thornton UK LLP, and their report to Plethora Solutions Holdings plc is attached to this report. This consolidated financial information for the six months ended 30 June 2008 has been prepared in accordance with IAS 34, "Interim Financial Reporting" as adopted by the European Union. The half yearly consolidated financial report should be read in conjunction with the annual financial statements for the year ended 31 December 2007, which have been prepared in accordance with IFRSs as adopted by the European Union.
The financial information set out in the interim report does not constitute statutory accounts as defined in Section 240 of the Companies Act 1985. Statutory accounts for the year ended 31 December 2007, prepared under IFRS, have been filed with the Registrar of Companies. The auditor's report on those financial statements was unqualified and did not contain a statement under Section 237(2) or Section 237(3) of the Companies Act 1985. The interim report was approved by the Board on 29th September 2008.
This interim financial information has been prepared using the accounting policies set out in the Group's 2007 statutory accounts.
A copy of the interim results for the six months ended 30 June 2008 will be available on the Company's website at www.plethorasolutions.co.uk.
2. Post Balance Sheet Event - Additional Financing
On September 29th the Company secured an additional financing of up to £1.3 million (net of expenses) of usable cash resources. This financing was provided by Paul Capital Healthcare, Merlin Biosciences Fund III ("Merlin") and ETV Capital S.A. as described below.
Paul Capital Healthcare has provided up to an additional $750,000 investment by way of an extension to the existing Revenue Interest Financing Agreement.
Merlin has provided £750,000 by way of a two-year 13.5% convertible loan note with warrants, both convertible/exercisable at 36p, a premium to the prevailing market price. Merlin was a founding investor of the Company, pre-IPO, and holds an aggregate of 9.7 million ordinary shares, representing 34.6% of the issued share capital. Each of the exercise of existing rights to subscribe for additional shares, the conversion of the loan note or the exercise of the warrant would give rise to Merlin increasing its equity interest in the Company. Consequently, following discussions with the Takeover Panel and in accordance with the Takeover Code, both the existing right to subscribe together with the Loan Note and the Warrants would, in accordance with Rule 9 of the Takeover Code, only be exercisable conditional upon there following a successful approval by shareholders of any appropriate resolutions pursuant to the "Whitewash" procedure as set out in Appendix 1 of the Takeover Code. The Company has agreed with the Panel that such a resolution will be put to shareholders at the next general meeting of the Company.
ETV Capital S.A. has provided up to an additional £225,000 by way of a release of funds held under a restricted escrow arrangement, in return for a reduction in the overall facility.
3. Going Concern
In determining the appropriate basis of preparation of the financial statements, the Directors are required to consider whether the Group can continue in operational existence for the foreseeable future.
Plethora had cash and cash equivalents of £2.0 million at 30 June 2008 together with £1.0 million held as cash collateral in escrow for ETV Capital S.A. and incurred a loss of £6.6 million for the six months ended 30 June 2008. The Group's Directors have prepared detailed cash flow projections for the period ending 30 September 2009 ("the Forecast") which include the additional financing secured on 29 September and a number of significant assumptions regarding income, expenditure and cashflows.
The Forecast assumes receipt of milestone income on the successful out-licensing of products. The events and timing giving rise to such milestones, such as further clinical development of the products and the amount of receipts, are outside the direct control of Plethora. Based on their understanding of the status of product development and their discussion with potential licensees, the Directors believe that it is reasonable to assume that certain such licensing agreements will be successfully completed and that the associated milestone payments will be received.
The Forecast also assumes a further financing exercise, by either equity or debt financing. This financing is in turn dependent upon successful data from clinical trials currently in progress. While the Directors have made reasonable enquiries as to the factors affecting such a financing exercise in the current economic climate, the success of such a financing is uncertain. Should insufficient cash be raised through these means, the Directors would seek to renegotiate the current schedule of debt repayments on more favourable terms.
If further funds were not to be raised, adjustments would have to be made to revise the balance sheet value of assets to their realizable amounts and to provide for further liabilities that may arise.
Having reviewed the Forecast and made reasonable enquiries in making the underlying assumptions, the status of commercial negotiations and possible cost saving strategies, the Directors have reasonable expectation that the Group will be able to meet its liabilities as they fall due for the foreseeable future. It is on this basis that the Directors consider it appropriate to prepare the Group's interim financial information on the going concern basis.
4. Segmental Reporting
The Group's revenue and loss on ordinary activities after tax were all derived from the principal activity of development and sale of products for the diagnosis, treatment and management of urological disorders. These activities can be segmented by research and development and sale of products which match the Groups' geographic segments, the UK and the USA. All of the revenue of the group has been derived from external customers.
These activities may be analysed as follows:
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| UK | USA | Total |
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| £'000 | £'000 | £'000 |
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| 6 months to 30 June 2008 |
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| Revenue |
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| 277 | 3,025 | 3,302 |
| (Loss)/profit after tax |
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| (5,351) | (1,310) | (6,661) |
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| 6 months to 30 June 2007 |
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| Revenue |
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| 13 | 2,770 | 2,783 |
| (Loss)/profit after tax |
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| (5,097) | 321 | (4,776) |
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| Year to 31 December 2007 |
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| Revenue |
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| 13 | 5,753 | 5,766 |
| (Loss)/profit after tax |
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| (10,926) | 448 | (10,478) |
5. Borrowings
| | 6 months ended 30 June 2008 | 6 months ended 30 June 2007 | Year ended 31 December 2007 |
| | £’000 | £’000 | £’000 |
| Current borrowings | | | |
| Revenue interest financing loan | 574 | - | - |
| Convertible acquisition loan | - | 678 | 786 |
| Convertible third party loan | 1,143 | 576 | 1,246 |
| | 1,717 | 1,254 | 2,032 |
| Non current borrowings | | | |
| Revenue interest financing loan | 6,944 | - | - |
| Convertible third party loan | 2,652 | 3,275 | 2,627 |
| | 9,596 | 3,275 | 2,627 |
A revenue interest financing agreement was entered into on 27 March 2008 between Plethora and Paul Capital Healthcare ("Paul Capital"). Plethora received $15 million on signature. In return, Paul Capital received an interest in the revenues generated from Plethora's male-health portfolio, primarily on revenues derived from Sales of ErecAid®, PSD502 and PSD510. The revenue interest is calculated on a decreasing percentage of revenues over time. The agreement expires in 2018. Plethora has the right to terminate the agreement at any time before then by making a final payment to Paul Capital which will be the greater of either (a) 250% of the payments funded by Paul Capital, or (b) an amount that would generate an IRR of 25% on the amounts funded by Paul Capital. This final payment shall be reduced by amounts already paid to Paul Capital. The loan is secured against the assets of the male-health portfolio. The proceeds received from Paul Capital met the definition of financial liabilities under IAS39 and accordingly were treated as financial liabilities. Revenue interest paid to Paul Capital is treated as a repayment of the liability and notional interest was charged on the liability using the effective interest rate at inception of 26.9%. Any change in the estimated future payments to Paul capital is recognized as income or expense in the income statement. At 30 June 2008, £425,000 of revenue interest was accrued and payable to Paul Capital.
The gross repayment to Paul Capital (including notional interest) due within one year from 30 June 2008 is estimated to be £2.9 million and due in greater than one year is £15.5 million
In 2007 a £4,000,000 convertible loan was received from ETV Capital S.A. ("ETV"), repayable in 33 equal instalments commencing January 2008. As part of the revenue interest financing agreement with Paul Capital, the terms of the loan were amended and an additional interest free period was extended to August 2008. Interest is charged at 7.25% above the three year swap rate on the date of the loan draw down. The loan is secured against Plethora's female-health portfolio, and is recorded at fair value in the balance sheet with interest charged at an effective rate over the life of the loan. The gross repayment to ETV (including notional interest) due within one year from 30 June 2008 is estimated to be £1.6 million, and due in greater than one year is £3.1 million.
6. loss per Share
|
| 6 months ended 30 June 2008
| 6 months ended 30 June 2007 | Year ended 31 December 2007 |
|
| £'000 | £'000 | £'000 |
| Basic |
|
|
|
| Loss (£'000) | (6,661) | (4,776) | (10,478) |
| Weighted average number of shares (no.) | 28,014,365 | 26,114,690 | 27,232,275 |
| Loss per share (pence) | (23.8p) | (18.3p) | (38.4p) |
No diluted loss per share is shown as the share options and convertible debt are anti dilutive.
INDEPENDENT REVIEW report to Plethora Solutions holdings plc
Introduction
We have been engaged by the company to review the condensed set of financial statements in the half-yearly financial report for the six months ended 30 June 2008 which comprises the condensed consolidated interim income statement, the condensed consolidated interim balance sheet, the condensed consolidated interim cash flow statement and the related notes 1 to 6. We have read the other information contained in the half yearly financial report which comprises only the chairman and chief executive's statement and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of financial statements.
This report is made solely to the company in accordance with guidance contained in ISRE (UK and Ireland) 2410, 'Review of Interim Financial Information performed by the Independent Auditor of the Entity'. Our review work has been undertaken so that we might state to the company those matters we are required to state to them in a review report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company, for our review work, for this report, or for the conclusion we have formed.
Directors' Responsibilities
The half-yearly financial report is the responsibility of, and has been approved by, the directors. The directors are responsible for preparing the half-yearly financial report in accordance with the AIM Rules of the London Stock Exchange.
As disclosed in Note 1, the annual financial statements of the group are prepared in accordance with IFRSs as adopted by the European Union. The condensed set of financial statements included in this half-yearly financial report has been prepared in accordance with International Accounting Standard 34, 'Interim Financial Reporting,' as adopted by the European Union.
Our Responsibility
Our responsibility is to express to the Company a conclusion on the condensed set of financial statements in the half-yearly financial report based on our review.
Scope of Review
We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410, 'Review of Interim Financial Information Performed by the Independent Auditor of the Entity' issued by the Auditing Practices Board for use in the United Kingdom. A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK and Ireland) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that causes us to believe that the condensed set of financial statements in the half-yearly financial report for the six months ended 30 June 2008 is not prepared, in all material respects, in accordance with International Accounting Standard 34 as adopted by the European Union.
Emphasis of Matter - Going Concern
Without qualifying our conclusion, we draw attention to the disclosures made in note 3 of the condensed financial statements concerning the Group's ability to continue as a going concern. These include the following uncertainties:
Receipt of milestone income on the successful out-licensing of products to third parties, which is in turn dependent upon successful data from clinical trials currently in progress, and
A successful financing exercise assuming the receipt of positive results from the clinical trials currently in progress.
The timing of debt repayments and the Company's ability to meet them assuming successful out-licensing of products and a successful financing exercise.
These events and conditions, along with the other matters as set out in note 3, indicate the existence of material uncertainties which may cast significant doubt about the Group's ability to continue as a going concern. The interim report does not include the adjustments that would result if the Group was unable to continue as a going concern as it is not practicable to determine or quantify them.
GRANT THORNTON UK LLP
CHARTERED ACCOUNTANTS
BIRMINGHAM29 SEPTEMBER 2008
The maintenance and integrity of the Plethora Solutions Holdings plc website is the responsibility of the directors: the interim review does not involve consideration of these matters and, accordingly, the company's reporting accountants accept no responsibility for any changes that may have occurred to the interim report since it was initially presented on the website.