PVG.L Regulatory News (PVG)

11 Mar 2008 07:01

Ark Therapeutics Group PLC11 March 2008 Ark Therapeutics Group plc Preliminary results for the year ended 31 December 2007 London, UK, 11 March 2008 - Ark Therapeutics Group plc today announces itsunaudited preliminary results for the year ended 31 December 2007. HIGHLIGHTS Cerepro(R) • Phase III study completes recruitment • Two successful Data Safety and Monitoring Board ("DSMB") meetings advise no major safety concerns and recommend trial continuation • Clearance from the EMEA of historically difficult technical barriers represents major breakthrough for Cerepro(R) and the new gene-based therapeutic area overall Trinam(R) • Special Protocol Assistance (SPA) opened for Phase III trial • US Recombinant DNA Advisory Committee (RAC) gives early clearance for Phase III trial, expected to commence in H1 2008 VitorTM • Successful pre-Phase III FDA and EMEA scientific advice meetings. Pilot Phase III trial expected to commence H1 2008 Pre-clinical • Three gene-based products being prepared for Phase I/IIa trials • Ark Therapeutics-led consortium awarded €2.5m European Commission grant for baculoviral vectors research • Scavidin(R) demonstrates pre-clinical effectiveness in third cancer model Wound care • Wound care portfolio strengthened with the addition of Kerraped(R) Corporate/ • Formal grant of key patent for stroke in Europe Commercial • Placing and Open Offer completed in November, raising £35.4m net of expenses • Cash and money market investments of £65.1m at 31 December 2007 (£48.4m at 31 December 2006) Post-period events • January 2008 DSMB meeting confirms timing of preliminary results from Phase III Cerepro(R) trial due Q3 2008 • Acquisition of Lymphatix Oy strengthens gene research technology and secures licences for VEGF C and VEGF D genes • Finnish manufacturing facility completes validation review to USA standards • Neuropad(R) in-licensed and launched in the UK (see separate press release) Dr Nigel Parker, CEO of Ark, commented: "2007 was a very positive year for Ark. Our three most advanced products inlate stage clinical development all continued to make solid progress and, on theregulatory front, we have overcome the critical technical barriers to obtainingmarketing approval for gene therapy-based products. The successful fund-raisingcompleted towards the end of last year has enabled us to select our nextgeneration of gene-based medicines for Phase I studies and, with a broad rangeof both late and early stage products in our pipeline and a well-funded cashposition, Ark has become a far stronger and more robust business. We lookforward to building on our 2007 achievements and to maintaining our leadershipposition in the fast-emerging area of gene therapy." For further information: Ark Therapeutics Group plc Tel: + 44 (0)20 7388 7722Dr Nigel Parker, CEOMartyn Williams, CFO Financial Dynamics Tel: +44 (0)20 7831 3113David YatesSusan Quigley Notes to EditorsArk Therapeutics Group plc Ark Therapeutics Group plc is a specialist healthcare group (the "Group")addressing high value areas of unmet medical need within vascular disease, woundcare and cancer. These are large and growing markets, where opportunities existfor effective new products to generate significant revenues. With four marketeddevices, Kerraboot(R), Kerraped(R), Flaminal(R) and Neuropad(R), and threefurther lead pharmaceutical products in late stage clinical development: Cerepro(R), VitorTM, and Trinam(R), the Group is transitioning from an R&D company to acommercial, revenue generating business. Ark's own products are sourced from related but largely non-dependenttechnologies within the Group and have been selected to enable them to be takenthrough development within the Group's own means and to benefit from Orphan DrugStatus and/or Fast Track Designation, as appropriate. This strategy has allowedthe Group to retain greater value and greater control of clinical developmenttimelines, and to mitigate the risks of dependency on any one particularprogramme or development partner. Ark has secured patents or has patentapplications pending for all its lead products in principal pharmaceuticalmarkets. Ark has its origins in businesses established in the mid-1990s by Professor JohnMartin and Mr Stephen Barker of University College London and Professor SeppoYla-Herttuala of the AI Virtanen Institute at the University of Kuopio, Finland,all of whom play leading roles in the Company's research and developmentprogrammes. Ark's shares were first listed on the London Stock Exchange in March 2004(AKT.L). This announcement includes "forward-looking statements" which include allstatements other than statements of historical facts, including, withoutlimitation, those regarding the Group's financial position, business strategy,plans and objectives of management for future operations (including developmentplans and objectives relating to the Group's products and services), and anystatements preceded by, followed by or that include forward-looking terminologysuch as the words "targets", "believes", "estimates", "expects", "aims","intends", "will", "can", "may", "anticipates", "would", "should", "could" orsimilar expressions or the negative thereof. Such forward-looking statementsinvolve known and unknown risks, uncertainties and other important factorsbeyond the Group's control that could cause the actual results, performance orachievements of the Group to be materially different from future results,performance or achievements expressed or implied by such forward-lookingstatements. Such forward-looking statements are based on numerous assumptionsregarding the Group's present and future business strategies and the environmentin which the Group will operate in the future. Among the important factors thatcould cause the Group's actual results, performance or achievements to differmaterially from those in forward-looking statements include those relating toArk's funding requirements, regulatory approvals, clinical trials, reliance onthird parties, intellectual property, key personnel and other factors. Theseforward-looking statements speak only as at the date of this announcement. TheGroup expressly disclaims any obligation or undertaking to disseminate anyupdates or revisions to any forward-looking statements contained in thisannouncement to reflect any change in the Group's expectations with regardthereto or any change in events, conditions or circumstances on which any suchstatements are based. As a result of these factors, readers are cautioned not torely on any forward-looking statement. Chairman and Chief Executive's review During 2007 Ark made notable progress with most aspects of its business andparticularly so in the gene-based medicine area. Our three lead clinicalprogrammes moved through key clinical milestones into Phase III development andwhilst, in common with general industry experience, we have made slower progressin dealing with the regulators than we had originally expected, securing FDAspecial protocol assessments for Trinam(R) and VitorTM is a significantadvantage for us. We were very pleased to receive grant of the stroke patent inEurope and we have recently commenced the process of unlocking the full value ofthis patent through further out-licensing activity. Whilst in April the EMEA determined that data from the ongoing Phase IIIcorroborative study were needed for full marketing approval of Cerepro(R), wewere particularly pleased to report our success in pioneering the regulatorypathway and standards for approval of gene-based medicine in Europe. A numberof these advances, especially in the area of chemistry and manufacturingcontrols (CMC) and environmental sections, are breakthrough events for Ark, aswell as for the gene medicine sector overall, and gave us the opportunity offiling patents to secure our long term position in this sector. This progresswith the EMEA has added confidence to the general view that gene based medicinewill be one of the next major platforms in pharmaceutical medicine. We arepleased to see the value of gene-based medicines being recognised with largepharma activity on the increase and some significant sector deals by companieswith positive Phase I results. The strengthening of our pre-clinical portfolio,with five programmes with promising early results, three of which we aim to takeinto Phase I/IIa clinical studies, will enable us to build on our leadershipposition in gene-based medicine and to exploit the growing interest in thisexciting area. Our UK wound care business, whilst still relatively small, strengthened steadilyduring 2007. With overall ex-warehouse sales (which do not account for stocksalready in the supply chain) 66% up year on year, there are some signs that theretractive climate in the NHS may at last be stabilising. Perhaps, in thefuture, we will see more of a willingness to prescribe new devices like ourswhich, in gaining reimbursement and acceptance on the new NHS Trust formularies,have demonstrated significant health economic benefits. We opened the year hosting our first R & D day for analysts and investors at ournew laboratories and manufacturing facility in Finland. Fit-out of the newmanufacturing facility has progressed according to plan. In Q2 we had the firstroutine inspection by the EMEA of our existing cGMP facility and we are pleasedto report that the certification was renewed, confirming that the quality levelsand standards we have implemented to achieve the first commercial productionlicence have been maintained. Q3 of 2007 saw Ark commence commercialisation of its non-core technologies andproducts. We spun out our eye related science and compounds to a new company,Eyecopharm GmbH, led and funded by the respected German biotech entrepreneurProfessor Heinrich Schulte. We also out-licensed the final development andinternational marketing rights to our oxidised LDL test kit to the UKdiagnostics company Lab 21 Limited. Ark's progress resulted in strong support from existing and new investors and wewere delighted to have raised £35.4m (net of expenses) in the November Placingand Open Offer, with a remit from investors to bring our second generationgene-based programmes through Phase I development. 2007 has been a year when the healthcare environment has shown furtherincreasing challenges in terms of regulatory stringency and barriers to drugentry. We are increasingly confident that our strategy of developing specialistproducts in areas of high clinical need, based on breakthrough biomedicaltechnologies, is one of the strategies most likely to succeed in such anenvironment. Pipeline Review Pharmaceuticals Cerepro(R) Throughout 2007 we continued to manufacture commercial grade batches of Cerepro(R) to the rigorous standards agreed with the EMEA. In the first half wepioneered the process controls necessary for approval of adenoviral genemedicines in Europe and we believe that the patents for these will, oncegranted, help maintain our leading position for both Cerepro(R) and in this areaoverall. At the end of 2006 the DSMB had reviewed the first 133 patientsrecruited into the Cerepro(R) Phase III corroborative study and recommended thestudy continue as planned. In early Q2 we completed recruitment of the full 250patients and in July the DSMB again recommended continuation of the study. Alsoin Q2, the EMEA concluded its first review of our application for conditionalmarketing approval which we filed on the basis of the existing Phase II trials.The EMEA concluded that whilst the critical chemistry and manufacturing controls(CMC), pre-clinical and environmental sections appeared satisfactory and thesafety profile appeared acceptable, an approval based on efficacy from a limitednumber of treated patients was insufficient for a new class of drug despite itbeing an Orphan Drug. Additional proof of efficacy from the ongoing Phase IIIcorroborative study was requested by the EMEA as necessary for an approval.Being cleared through the three key technical CMC, pre-clinical andenvironmental sections of the marketing application is a major breakthrough forArk and for the biotech sector overall. It has effectively established that,providing satisfactory clinical data exists, this type of gene medicine is anapprovable platform. Consequently, since the conditional approval route was no longer the correctprocess for an approval based on a full trials programme, the Company withdrewits application and will apply for a full licence once the results of thecorroborative study are available. Following the January 2008 DSMB meeting,these are scheduled for Q3 2008. VitorTM Following a successful pre-Phase III meeting with the EMEA and the FDA, theCompany applied for Special Protocol Assistance ("SPA") from the FDA. Oncegranted, SPA allows the final Phase III programme to be designed with the USregulators such that, if successful, a rapid review process takes place. WhilstSPA can delay commencement of the Phase III programme, it usually achieves agreater time-saving during the approval process and reduces the risk of aprogramme design problem preventing an approval. The SPA process opened in Q2and, following a number of consultation and review meetings with the FDA, theCompany decided to run a pilot Phase III to obtain extra data not available fromearly studies, prior to concluding the SPA. Whilst this has delayed the startof the Phase III programme by around a year, Ark believes this sensible andcautious approach is correct to ensure the appropriate Phase III programme isconducted. Recruitment of the first patient is expected H1 2008. Trinam(R) The end of Phase II meeting with the FDA in 2006 resulted in Ark being offeredSPA for the Phase III development. In the first half of the year we filed therelevant applications to the US recombinant advisory committee ("RAC") and tothe FDA to open the SPA. We were encouraged that attitudes to gene medicine inthe US had also advanced when rapid clearance for the Trinam Phase III was givenby RAC mid year, without the need for an oral hearing. The SPA progressedsteadily during the rest of the year and we conducted a further pre-clinicalstudy, as requested by the FDA, to expand the number of operative procedures forwhich Trinam(R) might be used. Whilst we had hoped to conclude the SPA in 2007,the outbreak of foot and mouth disease in the UK stopped animal movements andcaused us a three month delay, but work was completed at the end of the year andthe SPA process is expected to conclude shortly. Pre-clinical Research Our pre-clinical programmes have shown considerable advancement in 2007 and wehave increasingly focused our efforts on the DNA-based areas of our researchwhere our skill base and resources are world-leading. In January 2007 we heldour first R&D day for analysts and investors at our Kuopio facility. The daywas well attended and gave us the opportunity to show the size and scope of ournew research and manufacturing facilities and to introduce the results of someof our most promising research programmes. These are advancing the way DNA canbe used as highly selective medicines in conditions where existing treatmentsand old pharmaceutical chemistry based approaches are inadequate. We were verypleased with the positive response from attendees and the coverage which wereceived. In February we announced a €2.5m consortium grant to undertake pioneering workin the use of insect-derived baculoviruses to further their use in the genemedicine area. Further pre-clinical proof-of-principle results were obtainedmid year for our Scavidin(R) product which showed efficacy in a third cancermodel, giving us confidence to plan the final pre-clinical work and associatedGMP manufacturing to take the product into clinical development. In Q3 weshowed for the first time the extremely exciting results for our VEGF work inthe ischaemic myocardium using the same adenoviral delivery technology as inCerepro(R) and Trinam(R). In Q4 we also showed the market further pre-clinicalresults for our DNA-based medicines in the areas of foetal growth restriction,wound healing and coronary artery bypass graft. These are all serious areas ofunmet clinical need, in which our understanding of the disease at the molecularbiology level is enabling us to develop second generation gene medicine productswhere the therapeutic gene can be optimised to the problem and be delivered viaour established adenoviral platform. Late in the year we concluded negotiations with Lymphatix Oy, a Helsinki-basedprivate biotech company and acquired the business in an all-share transaction atthe start of 2008. This acquisition has given us access to certain scientifictechnologies to speed up our pre-clinical programmes, as well as a licence tothe angiogenic and lymphangiogenic applications for VEGF-D and C. We are also moving towards lead optimisation with our Neuropilin-1 antagonistprogramme and our targeted vector and earlier gene science research continues toadvance. Our goal is to move three of our most promising pre-clinical productsthrough to the first human studies, to gain key first efficacy data in thetarget disease. The strength and quality of our pre-clinical science was reinforced this year bythe European €2.5m baculovirus grant, where our application achieved one of thehighest scores possible in review, and by the successful Q4 fundraising wheresignificant proceeds were raised to progress the pre-clinical gene-basedprogrammes. Patent Portfolio Update In 2007 Ark had 36 new patents granted including the important "ACE stroke"patent for Europe. We filed 14 new applications and, in accordance with ourconstant review policy, abandoned 12 which we felt had no clear commercialvalue. At present Ark has 186 patents granted and 160 pending applications andwe continue to demonstrate success in overcoming the various objections andoppositions in the prosecution process. In the latter part of 2007 we filedapplications covering manufacturing processes which, if granted, would give ourgene-based products protection until 2027. Wound Care Business Combined sales of our wound care products showed good growth in 2007. Overall,our ex-warehouse sales averaged an increase of 66% over 2006. Whilst our woundcare business is still relatively small, we are pleased with the growth and webelieve we are seeing some signs that the NHS is beginning to move from acontainment mode towards an optimisation mode where Ark's new product range,which stands up to the latest health economic scrutiny, should do well. Late in the period we introduced Kerraped(R), a special medical shoe whichoff-loads pressure from the areas of the foot most prone to diabetic ulcers.This is the first product of this class to receive reimbursement in the UK.Early signs are that the market has received the product enthusiastically andfirst sales occurred at the very end of the year. Very recently, we haveintroduced the Neuropad(R) diagnostic test, to detect peripheral autonomicneuropathy in the feet of diabetic patients, to UK podiatrists and we willcontinue to add further new products to the business to build scale in thischallenging UK healthcare environment. Summary and Outlook In 2007 we made substantial progress. The pioneering work on regulatorystandards for gene therapy, progressing our other leads towards Phase III andthe grant of the European stroke patent are some of the most importantachievements in the history of the Company. This success, together with ourpre-clinical progress, catalysed the Placing and Open Offer which has allowed usto strengthen considerably our balance sheet, thus securing the next stage ofthe Company's development and building on our leading position in the genetherapy area. During 2008 we expect to maintain this momentum. Our manufacturing facilityrecently achieved US production validation standards. Trinam(R) and VitorTM areexpected to enter Phase III studies and we will report the results of theCerepro(R) Phase III study. We already have the sales and marketing plan forlaunch in place and key managers identified. 2008 should also bring furtherdevelopments in the commercialisation of our stroke patent and we expect tointroduce further wound care products to market in the UK. With the Lymphatixacquisition and strong cash reserves we also expect to make significant progresswith the late stage pre-clinical programmes, moving them towards Phase I/IIadevelopment in consultation with regulators. We are very excited by ourachievements in 2007 and, whilst there are still some major challenges ahead, welook forward to translating these plans into reality with confidence. Dennis Turner, Chairman Nigel Parker, Chief Executive Officer11 March 2008 Financial review Overview We report a loss for the year ended 31 December 2007 of £18.2m (2006: £17.5m).The Group's losses have increased in the year primarily as a result of thecontinuing progress made in the late-stage clinical development of its leadproducts, together with increased investment in the Group's promisingpre-clinical pipeline. Cash and money market investments at 31 December 2007 totalled £65.1m (2006:£48.4m). Results of Operations Years ended 31 December 2007 and 2006 Revenue Revenue of £1.1m was recorded in 2007 (2006: £0.3m). During the year, a furthermilestone receipt due under the licensing agreement with Boehringer Ingelheimwas received and an initial milestone payment was received from Lab21 Limitedfollowing the completion of the deal to out-license marketing rights for theOx-LDL heart attack risk test kit. Sales in the UK of wound care products were£0.57m (2006: £0.34m), the increase in the year reflecting the launch ofFlaminal(R) in late 2006 and the introduction of Kerraped in the second half of2007. It is expected for 2008 that the primary sources of revenues willcontinue to be wound care product sales and out-licensing receipts. In futureyears an increasing proportion of revenues is expected to come from the productsnow in late stage clinical development, together with further out-licensingreceipts. Research and development expenses Ark conducts research at its facilities in Kuopio, Finland, at UniversityCollege London and through a specialist chemistry sub-contractor. Clinicalstudies are generally carried out by approved clinical research organisationswithin Europe and North America under the close supervision of senior projectmanagers employed by the Group. Research and development expenditure in 2007was £14.6m (2006: £12.8m), with increased spending on the Cerepro(R) Phase IIIstudy and on Trinam(R), as well as additional investment in our follow-onpre-clinical portfolio. Clinical development costs Major expenditures during the year were the continuation of the Phase III studyfor Cerepro(R), where recruitment was completed in the year, and furtherdevelopment activities on Trinam(R). It is anticipated that 2008 will see thecompletion of the Cerepro(R) Phase III study and the commencement of recruitmentinto the Trinam(R) and VitorTM Phase III studies, as well as further expenditureon the late-stage pre-clinical programmes. Manufacturing development costs Manufacturing development expenditure increased slightly during 2007 aspreparations continued for commercial production of Cerepro(R). Research costs Research costs rose by £0.3m due to continuing investment, in Finland and in theUK, in the Group's highly promising pre-clinical pipeline. Sales and marketing expenses Selling, marketing and distribution costs for the period were £2.0m (2006:£1.8m). These costs related largely to sales force expenses and marketingactivities for wound care products although much of the increase in expenditurein the year related to pre-marketing activities for Cerepro(R). Other administrative expenses Other administrative expenses for the period were £5.8m (2006: £5.4m). Theseadministrative expenses consist primarily of remuneration for employees inexecutive and operational functions (including finance, commercial development,legal and IT), facilities costs and professional fees. The increase in the yearreflected additional expenditure on the Group's IT infrastructure and furtherstrengthening of the management team. Share-based compensation Share-based compensation charges for the period were £1.0m (2006: £1.1m). Thedecrease is partly as a result of a change in the estimation of cancelledoptions. Investment income The Company invests its surplus cash in bank deposits of up to one yearaccording to the terms of the Investment Policy approved by the Board. Netinterest receivable comprises the interest income generated from cash investedin term and overnight deposits. In the year ended 31 December 2007 the Groupearned investment income of £2.2m (2006: £1.9m) on cash deposits. The increasewas primarily because the average interest rate achieved in 2007 was 5.3% versus4.7% in 2006. Taxation There were no UK corporation tax charges for the year under review due to theincidence of tax losses. We continue the policy of surrendering tax losses forcash by making research and development tax claims to the tax authorities andanticipate a tax credit receivable of £1.8m in respect of the year ended 31December 2007 (2006: £1.6m), resulting from the continued investment in researchand development in the year. Balance sheet Total net assets (defined as total assets less total liabilities) have risenfrom £49.5m at 31 December 2006 to £68.1m at 31 December 2007, principally as aresult of the increase in money market investments and cash and cash equivalentsfollowing the share Placing and Open Offer in 2007. Cash flow The net cash outflow from operating activities for the year was £18.0m (2006:£17.4m). Ark's net cash outflow from capital expenditure was £3.0m (2006:£1.9m). The capital expenditure was principally the investment in upgrading theGroup's biologics manufacturing facilities in Kuopio, Finland. This investmentin expanded manufacturing facilities is expected to require additional capitalexpenditure during 2008. Intangible capital expenditure included licencepayments to access technology used in Ark's development programmes. Ark's net cash inflow from financing activities was £35.7m (2006: £31.7m)primarily through the proceeds from the successful Placing and Open Offer ofshares in November 2007. Interest received from term and overnight deposits was£2.1m (2006: £1.8m). The Board has implemented an Investment Policy governing the investment of theCompany's cash resources, under which the primary objective is to invest in lowrisk cash or cash equivalent investments to safeguard the principal, ensuringthat these resources remain available to fund the Group's operations while stillseeking to maximise returns. Martyn WilliamsChief Financial Officer 11 March 2008 Consolidated income statementfor the year ended 31 December 2007 (unaudited) Year Year ended ended 31 December 31 December 2007 2006 £'000 £'000 Revenue 1,125 344Cost of sales (374) (147) ______ ______ Gross profit 751 197Research and development expenses (14,611) (12,845)Selling, marketing and distribution costs (2,035) (1,842) Other administrative expenses (5,809) (5,413)Share-based compensation (1,006) (1,071) ______ ______ Administrative expenses (6,815) (6,484) Other income 491 33 ______ _______ Operating loss (22,219) (20,941)Investment income 2,226 1,867Finance costs (26) (23) _______ _______ Loss on ordinary activities before taxation (20,019) (19,097)Taxation 1,838 1,584 ______ ______ Loss on ordinary activities after taxation, being retained loss (18,181) (17,513)for the year ______ ______ Loss per share (basic and diluted) 11 pence 12 pence All results relate wholly to continuing activities. Consolidated balance sheetas at 31 December 2007 (unaudited) 31 December 31 December 2007 2006 £'000 £'000Non-current assetsGoodwill 1,306 1,306Other intangible assets 742 329Property, plant and equipment 5,327 2,034 ______ ______ 7,375 3,669 ______ ______Current assetsInventories 381 470Trade and other receivables 2,175 1,470Research and development tax credit receivable 2,055 1,499Current tax receivable 20 -Money market investments 46,000 40,000Cash and cash equivalents 19,067 8,433 ______ ______ 69,698 51,872 ______ _______ TOTAL ASSETS 77,073 55,541 ______ ______ Non-current liabilitiesObligations under finance leases 79 43Loans 321 338 ______ ______ 400 381 ______ ______ Current liabilitiesTrade and other payables 8,480 5,539Current tax liabilities - 14Obligations under finance leases 33 10Loans 94 86 ______ ______ 8,607 5,649 ______ ______ TOTAL LIABILITIES 9,007 6,030 ______ ______ EquityShare capital 2,019 1,659Share premium 116,571 81,196Merger reserve 36,989 36,989Foreign currency translation reserve (31) (22)Share-based compensation 3,052 2,042Retained loss (90,534) (72,353) ______ ______TOTAL EQUITY 68,066 49,511 ______ ______ TOTAL LIABILITIES AND EQUITY 77,073 55,541 ______ ______ Consolidated cash flow statementfor the year ended 31 December 2007 (unaudited) Year ended Year ended 31 December 31 December 2007 2006 £'000 £'000 Operating loss (22,219) (20,941)Depreciation and amortisation 1,019 993Increase in receivables (593) (132)Decrease/(increase) in inventories 89 (219)Increase in payables 1,413 162Share-based compensation 1,006 1,071Income taxes paid (52) (1) ______ ______ Net cash outflow used in operations (19,337) (19,067)Research and development tax credit received 1,300 1,648 ______ ______ Net cash outflow used in operating activities (18,037) (17,419) ______ ______ Investing activitiesInterest received 2,114 1,784Purchases of money market investments (6,000) (12,000)Purchases of property, plant and equipment (2,267) (1,223)Purchases of intangible assets (698) (692) ______ ______Net cash outflow used in investing activities (6,851) (12,131) ______ ______ Financing activitiesRepayments of borrowings (68) (48)Proceeds on issue of shares 35,735 31,753Finance costs (12) (19) ______ ______Net cash from financing activities 35,655 31,686 ______ ______ Net increase in cash and cash equivalents 10,767 2,136Cash and cash equivalents at beginning of year 8,433 6,290Effect of exchange rate changes (133) 7 ______ ______Cash and cash equivalents at end of year 19,067 8,433 ______ ______ Condensed statement of changes in equity for the year ended 31 December 2007(unaudited) Year ended Year ended 31 December 31 December 2007 2006 £'000 £'000 Equity at 1 January 49,511 34,405Exchange differences on translating foreign operations recognised (5) (1)directly in equityShare-based compensation 1,006 1,072Loss for the year (18,181) (17,513)Equity share options exercised 253 100Share issue 37,418 33,244Share issue expenses (1,936) (1,796) ______ ______ Equity at 31 December 68,066 49,511 ______ ______ Selected notes to the financial information (unaudited) 1 Presentation of financial statements The financial information set out in this unaudited preliminary statement doesnot comprise Ark's statutory accounts within the meaning of section 240(5) ofthe Companies Act 1985. The statutory accounts of Ark Therapeutics Group plc forthe year ended 31 December 2007, currently unaudited and to be published in duecourse, will be finalised on the basis of the financial information presented bythe Directors in this unaudited preliminary statement and will be delivered tothe Registrar of Companies for England and Wales in due course and will also besent to shareholders. Whilst the financial information included in this unaudited preliminaryannouncement has been computed in accordance with International FinancialReporting Standards (IFRSs), this announcement does not itself containsufficient information to comply with IFRSs. The Company expects to publish fullfinancial statements that comply with IFRSs in March 2008. The financial information set out in this unaudited preliminary statementincludes comparative figures that have been prepared on the same basis. Thefinancial information for the year ended 31 December 2006 is derived from thestatutory accounts for that year which have been delivered to the Registrar ofCompanies.The Auditors have reported on the financial statements for the yearended 31 December 2006 which were prepared under IFRSs. Their report wasunqualified and did not contain any statements under s237(2) or (3) CompaniesAct 1985. This preliminary statement was approved by the Board on 10 March 2008. 2 Revenue An analysis of the Group's revenue is as follows: Year ended Year ended 31 December 31 December 2007 2006 £'000 £'000Continuing operationsSales of goods 573 344Revenue from out-licensing deals 552 - ______ ______ 1,125 344 Investment income 2,226 1,867 ______ ______ 3,351 2,211 ______ ______ 3 Loss per share IAS requires presentation of diluted earnings per share when a company could becalled upon to issue shares that would decrease net profit or increase net lossper share. For a loss making company with outstanding share options, net lossper share would only be increased by the exercise of out-of-money options. Sinceit seems inappropriate to assume that option holders would exercise out-of-moneyoptions, no adjustment has been made to diluted loss per share for out-of-moneyshare options. The calculation of basic and diluted loss per ordinary share is based on theloss of £18,181,000 (2006: £17,513,000) and on 169,202,455 ordinary shares(2006: 147,291,176) being the weighted average number of ordinary shares inissue. This information is provided by RNS The company news service from the London Stock Exchange