Last checked at 23 Feb 2009 07:00
| 23 February 2009 |
SAREUM HOLDINGS PLC
("Sareum" or "the Company")
INTERIM RESULTS FOR THE SIX MONTHS ENDED 31 DECEMBER 2008
Sareum (AIM: SAR), the specialist cancer drug discovery business, is pleased to announce its interim results for the six month period ended 31 December 2008.
Financial highlights
Cash in bank at period end £531,000 (2007: £920,000)
Loss on ordinary activities (after taxation) of £848,000 (2007: £674,000), includes one-off re-structuring costs of £360,000
Operational highlights
Strategic review and restructuring completed
Trading on AIM restored
Primary focus is on development of compounds targeting cancer
Relocation of office premises, resulting in significant cost savings
Dr Tim Mitchell, CEO of Sareum Holdings plc, said: "We have completed the restructuring of the Company and operate from a greatly reduced cost base following our strategic review last year. We can now concentrate on the development and commercialisation of our cancer drug pipeline."
| Sareum Holdings plc | |
| Tim Mitchell | 01223 497 700 |
| John East & Partners Limited | |
| Simon Clements/Bidhi Bhoma | 020 7628 2200 |
| Hybridan LLP | |
| Claire Noyce/Stephen Austin | 020 3159 5085 |
Interim Results for the six months ended 31 December 2008
Chairman's Statement
During the period, Sareum Holdings plc completed a strategic review of the business, which it initiated in May 2008. This was prompted by an awareness of the increasingly difficult trading conditions experienced by the fee for services division. The executive directors presented a re-structuring plan to the Board and, following consultation with the Company's advisers, the plan was approved and implemented. The re-structuring of Sareum included selling the fee for services division, along with all of its laboratory equipment.
Sareum has retained the intellectual property contained in its research programmes and is now able to concentrate on its primary task of cancer drug discovery, whilst operating from a significantly reduced and controllable cost-base. The research activities, such as synthesis of new molecules and their testing, are sub-contracted to third parties. Sareum designs and selects the drug candidates for each of the three programmes currently in development, and maintains the appropriate patent portfolio
The Company has continued to make positive progress with its in-house cancer drug discovery programmes, resulting in three further patent applications and the publication of three patents from previous filings.
Sareum's most advanced in-house programme is carried out in conjunction with one of the world's leading cancer research organisations, The Institute of Cancer Research and Cancer Research Technologies Ltd. Additionally, we are developing cancer drug discovery programmes against a further two targets. These programmes are wholly owned by Sareum. Significantly, we have obtained positive results from in-vivo pre-clinical experiments designed to demonstrate that programme compounds increase the efficacy of cancer chemotherapeutics that are in clinical use.
We have received expressions of interest from pharmaceutical and biotechnology companies in these programmes. We are actively pursuing these approaches. This supports our belief that our approach to drug discovery is capable of generating valuable commercial assets.
Changes to the Board
Dr Alastair Riddell (Non-Executive Director), Giorgio Reggiani (Finance Director) and Dr David Williams (VP, Biology & Structural Sciences) resigned from the Board of the Company during the period. I thank them for their valuable contribution to the Company and wish them well for the future.
Financial review
During the period, revenues of £32,000 were recognised arising from fee-for-service collaborations prior to the sale of that part of the business.
The sale of the fee for service business included the sale of almost all of the equipment assets of the company and the write-down of the improvements made to the (now vacated) laboratory building. The cash received from the fee for service business and asset sale approximately equalled the write-down in equipment and building improvement assets, such that the effect on the balance sheet was an estimated £10,000 reduction in net assets. All of the Company's long-term loans, which included equipment lease financing and a loan from the landlord, have been paid off.
The re-structuring incurred one-off costs of £360,000, which included redundancy payments to staff, compensation to the landlord for early termination of the lease on the laboratory building and payments to specialist advisors. The consequential decrease in staff numbers and move to smaller office premises has resulted in an approximate 6-fold reduction in ongoing operating costs.
We ended the half year with net assets of £552,000, including £531,000 of cash in the bank. The Directors believe that the Company has sufficient cash to fund the business until at least January 2010. A commercial deal on one or more of the research programmes would further increase the duration of its funds.
Outlook
Our primary objective is to advance our in-house cancer drug discovery pipeline to deliver drug candidates that are positioned to attract lucrative partnering deals with pharmaceutical companies. We will continue to advance these programmes and file further drug patent applications during the year to protect our intellectual property portfolio. We expect to develop further drug candidates for pre-clinical studies during the current financial year. We are actively seeking licensing partners with the aim of achieving a licensing deal on at least one of our three current in-house programmes.
Dr Paul Harper
Chairman
Sareum Holdings plc
Consolidated Income Statement for the six months ended 31 December 2008
| Unaudited Six months ended 31 Dec 08 £'000 | Unaudited Six months ended 31 Dec 07 £'000 | Audited Year ended 30 Jun 08 £'000 | |
| Revenue | 32 | 1,096 | 1,503 |
| Research and Development costs | (354) | (1,168) | (2,123) |
| Administrative expenses | (582) | (731) | (1,396) |
| Operating Loss | (904) | (803) | (2,016) |
| Interest receivable and similar income | 13 | 9 | 33 |
| Interest payable and similar charges | (3) | (3) | (36) |
| Loss on ordinary activities before taxation | (894) | (797) | (2,019) |
| Tax on loss on ordinary activities (R&D Tax Credit) | 46 | 123 | 327 |
| Loss on ordinary activities after taxation | (848) | (674) | (1,692) |
| Loss per share (pence) Basic Diluted | (0.10)p (0.10)p | (0.13)p (0.13)p | (0.28)p (0.27)p |
Consolidated Balance Sheet as at 31 December 2008
| Unaudited As at 31 Dec 08 £'000 | Unaudited As at 31 Dec 07 £'000 | Audited As at 30 Jun 08 £'000 | |
| Non-current assets | |||
| Intangible assets | 2 | 32 | 26 |
| Tangible assets | 2 | 917 | 724 |
| 4 | 949 | 750 | |
| Current assets | |||
| Debtors | 87 | 722 | 608 |
| Cash at bank and in hand | 531 | 920 | 481 |
| 618 | 1,642 | 1,089 | |
| Creditors: amounts due within one year | (70) | (530) | (313) |
| Net current assets | 548 | 1,112 | 776 |
| Total assets less current liabilities | 552 | 2,061 | 1,526 |
| Creditors: amounts due in over one year | - | (165) | (126) |
| Net assets | 552 | 1,896 | 1,400 |
| Equity | |||
| Called up share capital | 204 | 150 | 204 |
| Share premium account | 5,401 | 4,933 | 5,401 |
| Profit and loss account | (5,053) | (3,187) | (4,205) |
| Total equity | 552 | 1,896 | 1,400 |
Consolidated Statement of changes in equity for the six months ended
31 December 2008
| Share Capital £'000 | Share Premium £'000 | Retained Loss £'000 | Total £'000 | |
| As at 30 June 2007 (Unaudited) | 115 | 3,764 | (2,513) | 1,366 |
| Issue of share capital (net) | 35 | 1,169 | - | 1,204 |
| Loss for the period | - | - | (674) | (674) |
| As at 31 December 2007 (Unaudited) | 150 | 4,933 | (3,187) | 1,896 |
| Issue of share capital (net) | 54 | 468 | - | 522 |
| Loss for the period | - | - | (1,018) | (1,018) |
| As at 30 June 2008 (Unaudited) | 204 | 5,401 | (4,205) | 1,400 |
| Loss for the period | - | - | (848) | (848) |
| As at 31 December 2008 (Unaudited) | 204 | 5,401 | (5,053) | 552 |
Consolidated Cash Flow Statement for the six months ended 31 December 2008
| Unaudited Six Months ended 31 Dec 08 £'000 | Unaudited Six Months ended 31 Dec 07 £'000 | Audited Year ended 30 Jun 08 £'000 | |
| Operating activities | |||
| Cash outflow from operating activities | (792) | (930) | (1,847) |
| Interest paid | (3) | (3) | (36) |
| Research and Development tax credit | 325 | 123 | 198 |
| Net cash used in operating activities | (470) | (810) | (1,685) |
| Investing activities | |||
| (Acquisition)/Disposal of fixed assets | 721 | (84) | (89) |
| Interest received | 13 | 9 | 33 |
| Net cash used in investing activities | (734) | (75) | (56) |
| Financing activities | |||
| Net proceeds from ordinary shares issued | - | 1,203 | 1,727 |
| (Repayment)/Increase of loans | (214) | (58) | (165) |
| Net increase/(decrease) in cash and equivalents | 50 | 260 | (179) |
| Cash and equivalents at start of period | 481 | 660 | 660 |
| Cash and equivalents at end of period | 531 | 920 | 481 |
NOTES TO THE UNAUDITED RESULTS FOR THE SIX MONTHS ENDED
31 DECEMBER 2008
1. FINANCIAL INFORMATION
These interim statements do not constitute statutory financial statements within the meaning of Section 240 of the Companies Act 1985. The 30 June 2008 Annual Report and Accounts are available from Sareum's web site, www.sareum.co.uk.
2. BASIS OF ACCOUNTING
The interim financial statements have been prepared in accordance with the IFRS accounting policies.
3. TAXATION
No liability arises for corporation tax for the period ended 31 December 2008. Research and Development tax credits received as cash are estimated to be £46,000 for the period.
4. DIVIDENDS
The directors do not propose the payment of a dividend in respect of the six months ended 31 December 2008.
5. LOSS PER SHARE
Basic loss per share is 0.10p (2007: 0.13p). The basic loss per ordinary share is based on the Group's loss for the six months of £848,000 (2007: £674,000) divided by the weighted average number of shares in issue during the period of 818,098,000 (2007: 506,105,121).
Diluted loss per share is 0.10p (2007: 0.13p). The diluted loss per ordinary share is based on the Group's loss for the six months of £848,000 (2007: £674,000) divided by the total of the weighted average number of shares in issue and the number of dilutive options which amounts to 839,098,000 (2007: 519,105,121).
6. AVAILABILITY OF INTERIM ACCOUNTS
This interim statement is available on request from the offices of the Company at Unit 2a, Langford Arch, London Road, Pampisford, Cambridge CB22 3FX and from the Company's website www.sareum.co.uk.