PVG.L Regulatory News (PVG)

30 Aug 2006 07:01

Ark Therapeutics Group PLC30 August 2006 Ark Therapeutics Group plc Interim Results for the First Half of 2006 Progress continues in busy first half London, UK, 30 August 2006 - Ark Therapeutics Group plc today announces itsresults for the six months ended 30 June 2006. PERIOD HIGHLIGHTS • Cerepro(TM) MAA filing progressing with EMEA • Phase III study shows Vitor(TM) significantly slows progression of cachexia in two cancer types • Unique DNA-based targeting system, Scavidin(R), halts tumour progression in two cancer models • Kerraboot(R) patent granted in the US • Six international marketing/distribution deals signed for Kerraboot(R) • Flaminal(R) in-licensed to strengthen UK devices business and Drug Tariff price secured • Placing and open offer completed raising £25.5m (post expenses) • Cash, cash equivalents and money market investments of £49.4m at 30 June 2006 (£40.5m at 30 June 2005, £34.3m at 31 December 2005) POST PERIOD EVENTS • Vitor(TM) US patent granted • Trinam(R) Phase II recruitment completed; preliminary results very positive Dr Nigel Parker, CEO of Ark, commented: "The first half of this year has been one of the most demanding periods in thehistory of the Company as management has successfully executed a secondaryfundraising, the development and manufacturing groups have progressed the MAAfiling of Cerepro(TM) and progress continues to be made in our other clinicaland pre-clinical programmes. We look forward to building on the achievements of the first six months andreporting on developments with the Cerepro(TM) MAA filing and the Phase III/IVstudy for that product, as well as on regulatory next-steps for Vitor(TM) andTrinam(R) and on progress in our commercialisation activities." 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 YatesAnna Keeble Notes to Editors Ark Therapeutics Group plc Ark is a specialist healthcare group (the "Group"), addressing high value areasof clear unmet medical need. With one marketed product, Kerraboot(R), and threefurther lead products in late stage clinical development: Vitor(TM), Cerepro(TM)and Trinam(R), the Group is transitioning from an R&D focused company to acommercial, revenue-generating business. Capitalising on over ten years ofresearch in vascular biology and gene-based medicine, Ark has a broad productportfolio targeted at specific unmet clinical needs within vascular disease,wound care and cancer. These are large and growing markets, where opportunitiesexist for effective new products to generate significant revenues. Cerepro(TM)is on track to becoming one of the world's first commercially available gene-based medicines. Ark's existing 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 anddevelopment programmes. 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 Building on progress We are pleased to report that the first half of 2006 has seen Ark continue tobuild on the key milestone achievements reported in late 2005, a number of whichrepresented 'world firsts' for the industry. Strong interest in Ark from bothexisting and new investors, allowed us successfully to conclude a verywell-supported fundraising in May. It was particularly encouraging to see thelarge number of existing shareholders who exercised their pre-emption rights.Consequently, our balance sheet has been significantly strengthened and weclosed the period with just under £50m of cash reserves. Overall our progress in this increasingly challenging healthcare environment hasstrengthened our business significantly. Pipeline review Cerepro(TM) Early in the year we received the first questions from the EMEA in relation toour filing for marketing approval of Cerepro(TM) in malignant glioma. Cerepro(TM) is the first gene medicine ever to undergo formal review for amarketing approval (ex-China), so this review is particularly important as itclarifies the overall regulatory requirements for European approval of this newand exciting class of medicines. The Company's resources have been prioritisedto complete necessary work and respond to the EMEA's first questions. Somenotable achievements have been made in the period, without which we would not beable to file our response. Our cGMP facility in Finland has manufactured theessential 'conformity' batches to commercial supply specifications. Ark'sheadquarters has satisfactorily completed a full good clinical practice ("GCP")system inspection under the new EU pharmaceutical regulations. The Phase IICerepro(TM) study, which forms the main clinical evidence in the submission, hasalso been subject to a GCP inspection as part of the review process and thereport noted that the results give an accurate description of the trial andsource data, and that the endpoint data are reliable from a GCP perspective. Our financial and strategic plans for Cerepro(TM), as presented at the time ofthe recent fundraising, remain unchanged. It is, however, clear that we havemade good progress with the marketing application in the period. Recruitment into the Phase III/IV study has proceeded according to schedule andto date external concerns that patients would be reluctant to participate in agene medicine trial have proved unfounded. Over a third of patients have nowbeen recruited into the trial. Surgeons are finding the product acceptable toadminister and adverse events reported to the Company to date are consistentwith those of the earlier studies and give no cause for concern. Overall, Cerepro(TM) has progressed well during the first half of this yearand the product remains on track to become what would be the first gene-basedmedicine in the world (ex-China) to be made commercially available. Trinam(R) In the US-based Phase II study in kidney dialysis patients who have undergonevascular access graft surgery, enrolment of the high-dose patients and thestandard care controls is complete. The very promising efficacy results alreadyreported with the low-dose treatment have strengthened further in the period,with the average graft survival period of low dose patients increasing to 17.8months, compared with the 4.5 month average they had previously experienced.All five high dose Trinam(R) patients with successfully implanted grafts remainopen and the average patency period has already reached 8 months, with threeapproaching 12 months. We are therefore optimistic for the success of the highdose group. Three out of four of the standard care controls have alreadyblocked (average patency 3.3 months). No systemic distribution of the producthas been found at the high dose and we have previously reported this for the lowdose. Under US regulations, patients in gene therapy trials are monitored for life.The data to date from this study indicates that Trinam(R) has an acceptablesafety profile and a clinical effectiveness well beyond the Company'sexpectations. The Company plans an end of Phase II meeting with the FDA towardsthe end of the year in preparation for the Phase III study. Approval for astudy has already been received from the US Recombinant Advisory Committee. We are delighted with Trinam(R)'s progress and the efficacy results to dateconfirm our original enthusiasm for the product's potential. Vitor(TM) At the start of the year we reported full results of the first Phase IIIclinical study of Vitor(TM) in cancer cachexia, the first human study of the agentin this disease. Treatment with Vitor(TM) significantly (p = 0.028) slowed therate of cachexia in two of the cancers studied (small cell lung and coloncancer). In the smaller group of pancreatic cancer patients, who exhibit a moreaggressive form of cachexia, the rate of weight loss slowed with Vitor(TM)treatment and, whilst the magnitude of effect approached that observed in theother two cancers, the effect on this third cancer was not statisticallysignificant. The study reports are now finalised and, with thisproof-of-principle data, we are in a good position for discussions withregulators later this year, for finalising the architecture of a final Phase IIIstudy to commence in 2007. EG005 EG005 is an oral therapy for the treatment of the fat metabolism disorderlipodystrophy, in HIV-positive patients. The product is in early clinicaldevelopment to assess its effect on a range of end points relevant to thispoorly understood disease. Last year we reported results for a three-monthexperimental Phase II study in 50 patients which showed interesting data in theproduct's favour in four markers of the condition. The one-year voluntaryextension of that study has now completed and we expect to report the initialresults in the near future, at which point we will make a decision regarding theproduct's ongoing development. Devices Kerraboot(R) Following our decision to increase the absorbency of Kerraboot(R), we arepleased to report that the first half of 2006 has shown a steady growth in UKsales, with prescriptions written by doctors and nurses in the period being 38%higher than in the same period last year. We continue to receive consistentpositive reports of the efficacy of the product, particularly in diabetic footulcers. Whilst we still have a lot to achieve in growing UK sales, the period onperiod growth has occurred at a time when the UK market has been very difficult. In particular the influence of regional (primary care trust) formularies indetermining prescribing has never been greater and we are encouraged by the factthat, in the period, the number of formulary inclusions has risen to 17, fromtwo at November 2005. Immediately post-period, we introduced the white versionof Kerraboot(R), for patients who prefer their ulcers not to be visible. Theearly market signs are that this will be a beneficial addition to the salesportfolio. On the international front, we have successfully concluded six distributiondeals, including one for the important Chinese market. The first internationalorders have recently been received from two licensees (Turkey and Australia/NewZealand). Elsewhere, we are expecting regulatory and pricing approvals to beachieved by the majority of licensees during the second half of this year. Clinical trials of Kerraboot(R) in China and Norway, at national leg ulcercentres, have produced the same good clinical results as those seen in the UK,and have confirmed the cost benefit for the product in those markets. Whilst the healthcare sales environment in the UK will undoubtedly remain toughfor the foreseeable future, the cost benefit ratio of Kerraboot(R) should be afavourable catalyst in developing sales of the product. Flaminal(R) We were delighted to announce both the successful in-licensing and NHS pricereimbursement for Flaminal(R), a novel enzyme-based topical anti-infectiveproduct for wounds where healing is slowed by high levels of bacteria in thewound bed. This will be sold by our existing sales force. The UK market forthis product class is circa £30m and has grown over 50% in the last two years.With Flaminal(R) offering a healing rate benefit of up to three times thosepublished for existing products, and notably being highly active againstmethicillin-resistant Staphylococcus aureus (MRSA), we believe the salespotential of Flaminal(R) in the UK is significant. We will announce the launchdate shortly. We have identified further interesting in-licensing targets in the woundcaredevices area which will help us to build a stand-alone devices business in linewith our corporate objectives. Pre-clinical and research Scavidin(R), our novel gene-based drug-targeting system, demonstrated control oftumour growth with both the chemotherapy paclitaxel and the radiotherapy yttriumin two pre-clinical cancer models. This was achieved at dose levels up to tentimes less than those currently given. This represents a very significantbenefit in the use of these agents where effectiveness is limited by sideeffects at existing doses. Additionally, our Neuropilin 1 small moleculeantagonist programme has identified two interesting leads (one small peptide andone small molecule) which have shown in in vitro models to inhibit the growthand spread of cancer cells. Depending on regulatory agency advice, we hope totake at least one of these two programmes into human studies in the next 18months. At the research level, our targeted integrating vector clip technologyremains extremely exciting and considerable progress is also being made with theanti-angiogenic VEGF receptor antagonists which we believe may have high utilityin degenerative diseases in the eye. For these earlier stage projects, ourscientists continue to operate under our highly cost effective academic/industryco-operation model. Manufacturing and new facility Manufacturing of Cerepro(TM) commenced early in 2006 in our cGMP productionfacility in Kuopio. The manufacturing of virus-based gene medicines tocommercial specifications is one of the most complex manufacturing processes inthe industry. So far, we have completed six successful production runsconforming to the batch release criteria, confirming our ability to supplyfinished product for commercial use. We have successfully performed a furtherseries of specific production line process validations to comply with EMEArequirements. Construction of our new Kuopio manufacturing facility has progressed well duringthe period and we are now in the process of finalising the design of theinternal layout and production equipment installations. Financial review The unaudited financial statements for the six months ended 30 June 2006 areprepared in accordance with the Group's accounting policies based onInternational Financial reporting Standards ("IFRS") as adopted by the EuropeanUnion. Net cash outflow from operating activities for the period was £10.5m (six monthsended 30 June 2005: £7.5m). Following receipt of £25.5m net proceeds of theplacing and open offer in the period, cash, cash equivalents and money marketinvestments were £49.4m at 30 June 2006 (£40.5m at 30 June 2005). Revenues of £0.15m were recorded in the first six months of 2006 (six monthsended 30 June 2005: £1.3m, which included the first £1.2m of initial milestonereceipts due under the licensing agreement with Boehringer Ingelheim). TheKerraboot(R) revenues of £0.15m compare to £0.12m for the prior period.Prescriptions written for Kerraboot(R) in the UK rose 38% in the six monthsended 30 June 2006, compared with the six months ended 30 June 2005. Research and development expenditure in the first six months of 2006 was £6.2m(six months ended 30 June 2005: £5.7m), reflecting the continued investment inthe cGMP manufacturing facility in Finland as the Company scales up for PhaseIII and commercial production, and progress with the Cerepro(TM) and Trinam(R)later stage studies. Sales and marketing expenses for the period were £0.8m (six months ended 30 June2005: £0.7m) and related exclusively to the UK sales and marketing activitiesfor Kerraboot(R). Administrative expenses for the period were £3.2m (six months ended 30 June2005: £3.0m), with the rise being mainly due to an increase in the share-basedcompensation charge in the period. In the six months ended 30 June 2006 the Group earned interest on its cashdeposits of £0.8m (six months ended 30 June 2005: £1.0m), reflecting the lowercash balance prior to the fundraising. Summary and outlook The first half of this year has been one of the most demanding periods in thehistory of the Company as management has successfully executed a secondaryfundraising, the development and manufacturing groups have progressed the MAAfiling of Cerepro(TM) and progress continues to be made in our other clinicaland pre-clinical programmes. We look forward to building on the achievements of the first six months andreporting on developments with the Cerepro(TM) MAA filing and the Phase III/IVstudy for that product, as well as on regulatory next-steps for Vitor(TM) andTrinam(R) and on progress in our commercialisation activities. Dennis Turner, Chairman Nigel Parker, Chief Executive Officer 30 August 2006 Consolidated income statementFor the six months ended 30 June 2006 (unaudited) Six months Six months Year ended ended ended 30 June 30 June 31 December 2006 2005 2005 Note £'s £'s £'s Revenue 148,362 1,270,021 2,346,928Cost of sales (61,152) (44,200) (101,800) _____ _____ _____ Gross profit 87,210 1,225,821 2,245,128Research and development expenses (6,181,369) (5,733,109) (13,941,303) _____ _____ _____ Selling, marketing and distribution costs (835,906) (650,285) (1,273,122) _____ _____ _____ Other administrative expenses (2,749,402) (2,713,254) (5,181,539)Share-based compensation (476,643) (249,182) (504,600) _____ _____ _____Administrative expenses (3,226,045) (2,962,436) (5,686,139) _____ _____ _____ Other income 16,702 16,679 33,507 _____ _____ _____ Operating loss (10,139,408) (8,103,330) (18,621,929) Investment income 753,232 1,026,099 1,893,382Finance costs (12,298) (11,009) (46,521) _____ _____ _____ Loss on ordinary activities before taxation (9,398,474) (7,088,240) (16,775,068)Taxation 700,000 618,631 1,640,253 _____ _____ _____ Loss on ordinary activities after taxation, (8,698,474) (6,469,609) (15,134,815)being retained loss for the period _____ _____ _____ Loss per share 2 (0.06) (0.05) (0.12) All results relate wholly to continuing activities. Consolidated balance sheetAs at 30 June 2006 (unaudited) 30 June 30 June 31 December 2006 2005 2005 £'s £'s £'s Non-current assetsGoodwill 1,306,091 1,306,091 1,306,091Other intangible assets 267,942 62,310 74,787Property, plant and equipment 1,436,867 1,192,905 1,327,322 _____ _____ _____ 3,010,900 2,561,306 2,708,200 _____ _____ _____ Current assetsInventories 138,180 327,599 251,366Trade and other receivables 3,683,654 3,293,963 2,802,837Money market investments 45,180,305 20,000,000 28,000,000Cash and cash equivalents 4,252,873 20,507,642 6,290,227 _____ _____ _____ 53,255,012 44,129,204 37,344,430 _____ _____ _____ TOTAL ASSETS 56,265,912 46,690,510 40,052,630 _____ _____ _____ Current liabilitiesTrade and other payables 4,112,256 3,615,783 5,167,537Loans 46,429 22,485 46,301 _____ _____ _____ 4,158,685 3,638,268 5,213,838 _____ _____ _____Non-current liabilitiesLoans 411,167 465,704 433,185 _____ _____ _____ 411,167 465,704 433,185 _____ _____ _____ TOTAL LIABILITIES 4,569,852 4,103,972 5,647,023 _____ _____ _____ Equity Share capital 1,593,726 1,271,609 1,274,931Share premium 75,225,858 49,806,146 50,032,370Merger reserve 36,988,989 36,988,989 36,988,989Foreign currency translation reserve (21,027) (20,339) (21,028)Share-based compensation 1,446,507 714,446 969,864Retained loss (63,537,993) (46,174,313) (54,839,519) _____ _____ _____ Shareholders' funds 51,696,060 42,586,538 34,405,607 _____ _____ _____ TOTAL LIABILITIES AND EQUITY 56,265,912 46,690,510 40,052,630 _____ _____ _____ Consolidated statement of changes in equityFor the six months ended 30 June 2006 (unaudited) Share Share Merger Foreign currency capital premium reserve translation reserve £'s £'s £'s £'s Balance as at 31 December 2004 1,263,337 49,430,703 36,988,989 (23,194)Exchange differences on translating - - - 2,166foreign operations recogniseddirectly in equityShare-based compensation - - - -Loss for the year - - - -Equity shares issued 6,644 431,349 - -Bonus issue 4,950 (4,950) - -Adjustment of share issue expenses - 175,268 - - _____ _____ _____ _____ Balance as at 31 December 2005 1,274,931 50,032,370 36,988,989 (21,028) Exchange differences on translating - - - 1foreign operations recogniseddirectly in equityShare-based compensation - - - -Loss for the period - - - -Issue of share capital 318,745 26,774,592 - -Equity share options issued 50 3,751 - -Share issue expenses - (1,584,855) - - _____ _____ _____ _____ Balance as at 30 June 2006 1,593,726 75,225,858 36,988,989 (21,027) _____ _____ _____ _____ Consolidated statement of changes in equityFor the six months ended 30 June 2006 (unaudited)(continued from table above) Share-based Retained loss Total compensation £'s £'s £'s Balance as at 31 December 2004 465,264 (39,704,704) 48,420,395Exchange differences on translating - - 2,166foreign operations recogniseddirectly in equityShare-based compensation 504,600 - 504,600Loss for the year - (15,134,815) (15,134,815)Equity shares issued - - 437,993Bonus issue - - -Adjustment of share issue expenses - - 175,268 _____ _____ _____ Balance as at 31 December 2005 969,864 (54,839,519) 34,405,607 Exchange differences on translating - - 1foreign operations recogniseddirectly in equityShare-based compensation 476,643 - 476,643Loss for the period (8,698,474) (8,698,474)Issue of share capital - - 27,093,337Equity share options issued - - 3,801Share issue expenses - - (1,584,855) _____ _____ _____ Balance as at 30 June 2006 1,446,507 (63,537,993) 51,696,060 _____ _____ _____ Consolidated cash flow statementFor the six months ended 30 June 2006 (unaudited) Six months Six months Year ended ended ended 30 June 30 June 31 December 2006 2005 2005 £'s £'s £'s Note Net cash outflow from operating activities 3 (10,450,414) (7,483,600) (14,064,778)Investing activities 4 (17,074,770) (19,440,679) (27,455,521)Financing activities 4 25,490,393 204,613 552,075 _____ _____ _____ Decrease in cash and cash equivalents (2,034,791) (26,719,666) (40,968,224) Cash and cash equivalents at beginning of 6,290,227 47,256,285 47,256,285period Effect of exchange rate changes (2,563) (28,977) 2,166 _____ _____ _____ Cash and cash equivalents at end of period 4,252,873 20,507,642 6,290,227 _____ _____ _____ Notes to the financial information 1 Basis of preparation - IFRS basis The results for the six months to 30 June 2006 have been prepared on the basisof the accounting policies set out in Ark Therapeutics Group plc's 2005 AnnualReport and Accounts. The results for the six months to 30 June 2006 and 2005are unaudited but have been reviewed by the auditor, Deloitte & Touche LLP. Theinterim accounts do not constitute statutory accounts as defined in section 240of the Companies Act 1985. The results for the full year 2005 have been takenfrom the Group's 2005 Annual Report and Accounts. The auditor has reported onthe 2005 accounts and the report was unqualified and did not contain a statementunder section 237(2) or (3) of the Companies Act 1985. The Group's 2005 Reportand Accounts have been filed with the Registrar of Companies. Copies of the interim results for the six months ended 30 June 2006 are beingsent to all shareholders. A copy can also be found on the Company's website atwww.arktherapeutics.com. 2 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 £8,698,474 for the six months ended 30 June 2006 (six months ended 30June 2005: £6,469,609; year ended 31 December 2005: £15,134,815) and on133,836,891 ordinary shares (June 2005: 126,463,186; December 2005: 127,168,920)being the weighted average number of ordinary shares in issue. 3 Reconciliation of operating loss to net cash outflow from operating activities Six months ended Six months ended Year 30 June 30 June ended 2006 2005 31 December £'s £'s 2005 £'s Operating loss (10,139,408) (8,103,330) (18,621,929)Depreciation and amortisation 516,799 194,527 447,343(Increase)/decrease in accounts receivable (193,804) (609,873) 3,873Decrease in inventories 113,186 3,410 79,644(Decrease)/Increase in accounts payable (1,188,008) 44,206 1,568,205Share-based compensation 476,643 249,182 504,600 _____ _____ _____Net cash outflow from operations (10,414,592) (8,221,878) (16,018,264) Research and development tax credit (35,822) 738,278 1,953,486(overpaid)/received _____ _____ _____Net cash outflow from operating activities (10,450,414) (7,483,600) (14,064,778) _____ _____ _____ 4 Analysis of cash flows for headings netted in the cash flow statement Six months ended Six months ended Year ended 30 June 30 June 31 December 2006 2005 2005 £'s £'s £'sInvesting activitiesInterest received 802,041 948,093 1,350,011Finance costs (10,696) 0 (17,050)Purchases of money market investments (17,180,305) (20,000,000) (28,000,000)Purchases of property, plant and equipment (369,045) (370,599) (745,554)Purchases of other intangible assets (316,765) (18,173) (44,927)Proceeds on sale of property, plant and 0 0 1,999equipment _____ _____ _____Net cash outflow from investing activities (17,074,770) (19,440,679) (27,455,521) _____ _____ _____FinancingIssue of shares 25,512,283 227,098 613,261Repayment of loans (21,890) (22,485) (61,186) _____ _____ _____ Net cash inflow from financing 25,490,393 204,613 552,075 _____ _____ _____ Independent review report toArk Therapeutics Group plc INDEPENDENT REVIEW REPORT TO ARK THERAPEUTICS PLC Introduction We have been instructed by the Company to review the financial information forthe six months ended 30 June 2006 which comprises the income statement, thebalance sheet, the statement of changes in equity, the cash flow statement andrelated notes 1 to 4. We have read the other information contained in theinterim report and considered whether it contains any apparent misstatements ormaterial inconsistencies with the financial information. This report is made solely to the Company in accordance with Bulletin 1999/4issued by the Auditing Practices Board. Our work has been undertaken so that wemight state to the Company those matters we are required to state to them in anindependent review report and for no other purpose. To the fullest extentpermitted by law, we do not accept or assume responsibility to anyone other thanthe Company for our review work, for this report, or for the conclusions we haveformed. Directors' responsibilities The interim report, including the financial information contained therein, isthe responsibility of, and has been approved by, the Directors. The Directorsare responsible for preparing the interim report in accordance with the ListingRules of the Financial Services Authority which require that the accountingpolicies and presentation applied to the interim figures are consistent withthose applied in preparing the preceding annual accounts except where anychanges, and the reasons for them, are disclosed. Review work performed We conducted our review in accordance with the guidance contained in Bulletin1999/4 issued by the Auditing Practices Board for use in the United Kingdom. Areview consists principally of making enquiries of Group management and applyinganalytical procedures to the financial information and underlying financial dataand, based thereon, assessing whether the accounting policies and presentationhave been consistently applied unless otherwise disclosed. A review excludesaudit procedures such as tests of controls and verification of assets,liabilities and transactions. It is substantially less in scope than an auditperformed in accordance with International Standards on Auditing (UK andIreland) and therefore provides a lower level of assurance than an audit.Accordingly, we do not 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 June 2006. Deloitte & Touche LLPChartered AccountantsCambridge, UK 30 August 2006 Notes: A review does not provide assurance on the maintenance and integrity ofthe website, including controls used to achieve this, and in particular onwhether any changes may have occurred to the financial information since firstpublished. These matters are the responsibility of the Directors but no controlprocedures can provide absolute assurance in this area. Legislation in the United Kingdom governing the preparation and dissemination offinancial information differs from legislation in other jurisdictions. This information is provided by RNS The company news service from the London Stock Exchange