Physiomics Regulatory News (PYC)

31 Mar 2008 07:00

Physiomics PLC31 March 2008 Physiomics plc ("Physiomics" or "the Company") Interim Results Statement for the six month period ended 31 December 2007 Oxford, UK 28 March 2008: The Board of Physiomics plc (AIM:PYC), a Europeansystems biology simulation company, today announces the financial results forthe six months ended 31st December 2007. Physiomics plc is a computationalsystems biology services company, applying simulations supporting pharmaceuticaldecision making throughout the entire drug discovery process, particularly forcancer therapies. Highlights of the period: • Turnover of £55,271 • Losses after tax of £194,160 • September 2007: Collaboration announced with Eli Lilly, a global pharmaceutical company • December 2007: Memorandum of Understanding (MoU) with Swansea University for access to their IBM supercomputer, "Blue C" • Significant technical progress made in developing virtual tumour models • Appointment of Dr Paul Harper as non-executive Chairman Post-period end highlights: • Appointment of Mr Roger Jones as Financial Controller and Company Secretary Dr Paul Harper, Chairman of Physiomics commented: The six months to December has been a very positive period, with the achievementof significant commercial and technological milestones. Eli Lilly, a majorpharmaceutical company has joined our growing list of partners and ourSystemCell(R) Technology has been adapted to enable simulation on supercomputerarchitecture, reducing tasks that would take many hours to complete to just afew minutes. Following a strategic review of technology progress, thecompetitive environment and the improvement in business prospects engendered bythe landmark deal with Lilly, we have aligned our internal programmes to matchnew opportunities. This has resulted in a re-structuring of the board, inparticular the appointment of myself as Chairman and of Mr. Roger Jones as GroupFinancial Controller and Company Secretary. In August 2007 we completed a project for ValiRx Plc (formally CronosTherapeutics). Our apoptosis model technology has supported both "no-go" and "go" decisions for therapeutic targets in record time (seven months). As a result of this project, we are in the process of filing a joint patent application on a combination of drug targets. In September 2007 we secured a contract with the US-based pharmaceutical companyEli Lilly. We are obviously excited about the possibilities of working with aprestigious global company such as Eli Lilly. The Directors see this as animportant endorsement of our technology platform by a pharmaceutical companythat already has major in-house investment in systems biology and therefore iswell able to assess the quality of the Physiomics' package. We have continued to further our relationship with the Institute of Life Scienceat Swansea University, with the signature of 3 year MoU to secure access totheir IBM supercomputer. This is one of the most powerful computers in the worlddedicated to life science and will reinforce Physiomics' modelling framework andhelp address the ever increasing computing requirements in the field of systemsbiology. During the period we have also reached a long-term agreement with BayerTechnical Services over the use of their ground breaking "MoBi" technology toassist us in the pharmacokinetics (PK)/pharmacodynamics (PD) analysis of ourwork. Physiomics has continued to develop its oncology model portfolio andvirtual tumour project by extending our expertise to include the apoptosisprocesses. Apoptosis is one of the processes in living cells which leads to celldeath and the biochemical pathways responsible for this are primary targets foranti-cancer treatments. We are currently integrating this new apoptosis modelwith our existing cell cycle model to provide a more complete picture of thebalance between cell proliferation and cell death, which is the key to attackingdiseases such as cancer. In recent months we have also seen a significant increase in expressions ofinterest from pharmaceutical and biotechnology companies concerning ourfee-for-service consultancy. We are looking forward to securing additionalcontracts and repeat business from existing partners and to adding new customersto our portfolio. Dr Paul Harper Non-executive Chairman 28 March 2008 Physiomics plc Unaudited Income Statement for the half year ended 31 December 2007 Unaudited Unaudited Audited Half year to Half year to Year ended 31-Dec-07 31-Dec-06 30-Jun-07 £'000 £'000 £'000 Revenue 55 48 216 Net operating expenses -262 -202 -466 Other operating income 6 - - Operating loss -201 -154 -250 Finance income 1 - 1Finance costs -4 -3 Loss before taxation -204 -154 -252 UK corporation tax 10 - 59 Loss for the period attributable to equity -194 -154 -193shareholders Loss per share (pence)Basic and diluted 0.05 p 0.04 p 0.06 p Physiomics plc Unaudited Balance Sheet as at 31 December 2007 Unaudited Unaudited Audited Half year to Half year to Year ended 31-Dec-07 31-Dec-06 30-Jun-07 £'000 £'000 £'000 Non current assetsIntangible assets 43 49 46Property, plant and equipment 4 7 8 47 56 54 Current assetsTrade and other receivables 156 56 173Cash and cash equivalents 3 263 75 159 319 248 Total assets 206 375 302 Current liabilitiesTrade and other payables -164 -136 -84Short-term provisions -24 -13 -38Bank and other loans -5 - -Government grants - - - -193 -149 -122Non current liabilitiesOther non-current liabilities -107 -100 -82 Total liabilities -300 -249 -204 Net assets -94 126 98 Capital and reservesShare capital 150 151 150Share premium account 1,611 1,617 1,611Other reserves 20 - 18Profit & loss account -1,875 -1,642 -1,681Equity shareholders' funds -94 126 98 Physiomics plc Unaudited reconciliation of Income Statement for the half year ended 31 December 2007 There are no conversion effects arising from the transition from UK GAAP to IFRS. Unaudited reconciliation of Balance Sheet for the half year ended 31 December 2007 Unaudited Unaudited Audited Half year to Half year to Year ended 31-Dec-07 31-Dec-06 30-Jun-07 £'000 £'000 £'000 Conversion effects comprise:IAS38 - reclassification of software from tangible to intangibleassetsNon current assets Intangible assetsUK GAAP 42 46 44Effect of transition to IFRS 1 3 2IFRS 43 49 46 Property, plant and equipmentUK GAAP 5 10 10Effect of transition to IFRS -1 -3 -2IFRS 4 7 8 There are no other conversion effects arising from the transition from UK GAAP to IFRS. Statement of changes in equity for the half year ended 31 December 2007 Share Total Share premium Other Retained shareholders' capital account reserves earnings funds £'000 £'000 £'000 £'000 £'000 At 30 June 2006 as previously stated 93 1,329 - -1,488 -66Prior period effect of adoption of IFRS - - - - -At 30 June 2006 as restated 93 1,329 - -1,488 -66 Share issue 57 282 - - 339Equity element of loan notes - - 18 - 18Loss for the year - - - -193 -193At 30 June 2007 150 1,611 18 -1,681 98 Equity element of loan notes - - 2 - 2Loss for the period - - - -194 -194 At 31 December 2007 150 1,611 20 -1,875 -94 Physiomics plc Unaudited Cash Flow Statement for the half year ended 31 December 2007 Unaudited Unaudited Audited Half year to Half year to Year ended 31-Dec-07 31-Dec-06 30-Jun-07 £'000 £'000 £'000 Cash flows from operating activities: Operating loss -201 -154 -252Amortisation and depreciation 6 6 14(Increase) decrease in debtors - - -58Increase (decrease) in creditors 85 -50 -104Increase (decrease) in provisions -14 -12 13 Cash generated from operations -124 -210 -387 UK corporation tax received 27 - - Net cash generated from operating activities -97 -210 -387 Cash flows from investing activities: Purchase of non-current assets, net of grants - - -4receivedDisposal of non-current assets - 1 - Net cash used by investing activities - 1 -4 Cash inflow (outflow) before financing -97 -209 -391 Cash flows from financing activities:Issue of equity share capital - 429 429Payment for share issue costs - -83 -89Loans from related parties 25 100 100 Net cash from (used by) financing activities 25 446 440 Net increase (decrease) in cash and cash -72 237 49equivalents Cash and cash equivalents at beginning of period 75 26 26 Cash and cash equivalents at end of period 3 263 75 Physiomics plc Notes to the Interim Financial Statements 1. General information Physiomics plc is a public limited company ("the Company") incorporated in theUnited Kingdom under the Companies Act 1985 (registration number 4225086). TheCompany is domiciled in the United Kingdom and its registered address is TheMagdalen Centre, Robert Robinson Avenue, Oxford Science Park, Oxford OX4 4GA.The Company's ordinary shares are traded on the AIM Market of the London StockExchange ("AIM"). Copies of the interim report are available from the Company'swebsite, www.physiomics-plc.com . Further copies of the Interim Report andAnnual Report and Accounts may be obtained from the address above. The Company's principal activity is providing services to pharmaceuticalcompanies in the areas of outsourced systems and computational biology. 2. Basis of preparation Physiomics plc has adopted International Financial Reporting Standards ("IFRS")with effect from 1 July 2006. The Company will apply IFRS in its financialstatements for the year ending 30 June 2008. Therefore, these interim statementsare the Company's first financial statements prepared in accordance with IFRS.These financial statements may need updating for subsequent amendments to IFRSrequired for first time adoption or for new standards issued post balance sheetdate. The basis of preparation and accounting policies followed in this interim reportdiffer from those set out in the Annual Report and Accounts 2007 which wereprepared in accordance with United Kingdom accounting standards (UK GAAP). Asummary of the significant accounting policies used in preparation of thisinterim report under IFRS is provided in note 3 below. As permitted, this interim report has been prepared in accordance with AIM rulesand not in accordance with IAS34 'Interim Financial Reporting', therefore theyare not fully compliant with IFRS. The interim financial statements do notconstitute statutory accounts as defined by Section 240 of the Companies Act1985. 3. Accounting policies Going concern The Directors consider that the company is a going concern and as a result thefinancial statements have been prepared on a going concern basis. Thisassumption is made in the expectation of sufficient cash generation fromexisting investors, exploitation of the Company's intellectual property assets,further access to the capital markets in the current period, and substantiallyimproved prospects of further fee-for- service consultancy. Revenue recognition The revenue shown in the income statement relates to amounts received andreceivable from the provision of products and services. In the event of a lump sum payment being received at the start of a contract,this sum is deferred over the life of the contract, with an equal amountreleased to the income statement each month over the life of the contract toensure that the income is recognised in accordance with the services provided. Intangible Assets Intangible Patents and Trademarks are included at cost and amortised on astraight line basis over their useful economic life, which is estimated to be 15years. It is the opinion of the directors that the value of the company'sintellectual property is not less than the carrying value in these accounts. Property, plant and equipment All items are initially recorded at cost Depreciation Depreciation is calculated to write off the cost of an asset over its usefuleconomic life as follows: Plant and machinery - three years, straight-line basisFixtures and computers - three years, straight-line basis Research and development expenditure Expenditure on research activity is recognised as an expense in the period inwhich it is incurred. Internally-generated intangible assets arising from the Company's businessdevelopment is recognised where it can be readily identified and quantified, offuture value and where resources will be present to complete. Trade and other receivables Trade receivables are recognised and carried at the lower of their originalinvoiced value and recoverable amount. Balances are written off when theprobability of recovery is considered to be remote. Financial liability and equity Financial liabilities and equity instruments are classified according to thesubstance of the contractual arrangements entered into. An equity instrument isany contract that evidences a residual interest in the assets of the Companyafter deducting all of its liabilities. Cash and cash equivalents Cash and cash equivalents in the balance sheet comprise cash at bank and in handand short-term deposits with an original maturity of three months or less. Foreign currency Assets and liabilities denominated in foreign currencies are translated intosterling at the rates of exchange ruling at the balance sheet date. Transactionsin foreign currencies are translated into sterling at the rate of exchangeruling at the date of the transaction. Exchange differences are taken intoaccount in arriving at the operating result. Leased assets and obligations Payments made under operating lease contracts are charged to the incomestatement on a straight-line basis over the lease term. Retirement Benefits The Company operates a defined contribution pension scheme for employees. Theassets of the scheme are held separately from those of the Company. The annualcontributions payable are charged to the income statement. Share based payments Goods and services received in the course of share-based payment transactionsfor material amounts are to be measured at fair value and recognised in thefinancial statements with a corresponding credit to equity, unless thetransaction is settled in cash. When applied to employee share-basedcompensation, this leads to the recognition of share options which have beengranted and are expected to vest as an expense in the income statement. Deferred Taxation Deferred taxation is recognised in respect of all timing differences that haveoriginated but not reversed at the balance sheet date where transactions orevents have occurred at that date that will result in an obligation to payfurther tax, or a right to pay less tax in future. Deferred tax assets arerecognised only to the extent that the Directors consider that it is more likelythan not that there will be sufficient taxable profits from which the futurereversal of the underlying timing differences can be deducted. Further notes on reporting under International Financial Reporting Standards. This interim report is the first to be prepared under IFRS. The comparativefigures have been prepared on the same basis and have therefore been restatedfrom those previously prepared under UK GAAP. The commentary below details thekey changes that have arisen due to the transition to reporting under IFRS. TheCompany's date of transition is 1 July 2006, which is the beginning of thecomparative period for the 2007 financial year. Therefore the opening balancesheet for IFRS purposes is that reported at 30 June 2006 as amended for changesdue to IFRS. First time adoption The Group has applied the provisions of IFRS1 - First Time Adoption ofInternational Financial Reporting Standards which, generally, requires that IFRSaccounting policies be applied retrospectively in determining the openingbalance sheet at the date of transition. The following reconciliation is included in these statements: Reconciliation of unaudited balance sheets at 31 December 2007 and 31 December2006 and audited balance sheet to 30 June 2007. The transition from UK GAAP to IFRS does not affect the cash flows generated bythe Company. The IFRS cash flow statement is presented in a different format tothat required under UK GAAP. The balance sheet has the following reconciling item between the UK GAAP formatand the IFRS format: Intangible assets At transition the Company followed the provisions of IAS36 and reclassifiedseparately identifiable computer software assets from tangible assets tointangible assets. There are no reconciling items between the UK GAAP format and the IFRS formatfor the income statement and the cash flow statement For further information:Physiomics plc +44 (0)7747 842 446Dr Paul Harper drpaulharper@tiscali.co.uk Grant Thornton Corporate Finance +44 (0)20 7383 5100Colin Aaronson This information is provided by RNS The company news service from the London Stock Exchange