Sareum Regulatory News (SAR)

4 Sep 2006 07:03

Sareum Holdings PLC04 September 2006 For immediate release 4 September 2006 SAREUM HOLDINGS PLC ("Sareum" or the "Company") RESULTS FOR THE TWELVE MONTHS ENDED 30 JUNE 2006 Sareum Holdings plc (AIM: SAR), the specialist structure-based drug discoverybusiness, is pleased to announce its results for the twelve month period ended30 June 2006. • Financial highlights: - Revenues increased 440% to £1.5M (2005: £0.3M) - Loss on ordinary activities for period (after taxation) reduced 50% to £0.6M (2005: £1.2M) - Loss on ordinary activities Jan-June 2006 (after taxation) reduced 96% to £22,000 (2005: £631,000) - Exercise of £500,000 Put and Call option - Cash in bank increased 20% to £528,000 (2005: £441,000) • Business highlights: - Major in-house drug discovery collaboration announced with the Institute of Cancer Research and Cancer Research Technologies Ltd - Ten revenue generating collaborations announced, the largest of which is worth up to $5M - "Crystal Bank" protein structure resource launched • Post year end highlights: - Substantial progress with in-house drug discovery collaboration with the Institute of Cancer Research and Cancer Research Technologies Ltd. - Repeat business with Almirall and Lundbeck Dr Paul Harper, Chairman of Sareum Holdings plc, said: "Sareum has enjoyed aparticularly productive and successful second full year of trading. The Companyand its management have made great progress, with financial performance beingclose to market expectations. The Board envisages strong growth in bothresearch activities and the generation of revenues for the year ahead. The Board and the entire Sareum team remains dedicated to generating shareholdervalue. The Sareum directors continue to work to develop the Company's in-housestructure-based cancer drug discovery and development pipeline and remainconfident about its future prospects." For further information please contact: Sareum Holdings plc 01223 497700Tim Mitchell, Chief Executive Officer Buchanan Communications 020 7466 5000Tim Anderson, Mary-Jane Johnson Results for the twelve months ended 31 June 2005 Chairman's Statement Sareum Holdings plc has enjoyed a successful second financial year of trading.Our in-house drug discovery activity has made excellent progress, generatingactive compounds that we believe will ultimately lead to a candidate forpre-clinical development. The fee for service business has been strong with,particularly in the second half of the financial year, a series ofcollaborations with leading pharmaceutical companies. Our in-house drug discovery was significantly enhanced by the announcement inJuly 2005 that the Company had established a joint research team with CancerResearch Technology Ltd. and the Cancer Research UK Centre for CancerTherapeutics at the Institute of Cancer Research, to develop cancer treatmentsthat are effective against tumours that are resistant to traditionaltherapeutics. The Institute of Cancer Research is one of the world's leadingcancer research organisations and thus a prestigious partner for Sareum'sin-house research, and this collaboration continues to progress on-track. We arecurrently working on a number of cancer targets for our in-house programmes inaddition to the joint venture activities. If all goes to plan we aim to have acandidate molecule ready to enter pre-clinical development by this time nextyear. Sareum continued making good progress in obtaining revenue-generating servicecollaborations, with the announcement of ten agreements, including top-50 globalpharmaceutical companies such as Schering AG, Organon, UCB and Lundbeck. Notable agreements included a total of three integrated Structural Biology,Fragment Screening and Discovery Chemistry projects, with Organon and IdenixPharmaceuticals, announced in January and February 2006. The two collaborativeprojects with Idenix have a combined success dependent value of up to $5Million. In addition to Idenix, Sareum has established itself in the USA, announcingcollaborations with Infinity Pharmaceuticals in September 2005 and SirtrisPharmaceuticals in June 2006. The Company was also very pleased to announce theachievement of success milestones in its collaboration with Schering AG, anextension to its collaboration with Almiral Prodesfarma and recently, a secondcollaboration with Lundbeck. The Crystal Bank protein structure resource was launched during the period. Thisprovides the Company with a source of additional revenue as well as being aneffective demonstration of Sareum's success in its core capability of proteinstructures determination. In November, we announced additions to the CrystalBank, increasing the number of therapeutically relevant proteins to 16 and, inJanuary, the addition of the first reported structure of Bcl-2, an importantoncology target, was announced. A number of the collaborations referred to aboveinvolve Crystal Bank targets and some others are expected to provide additionalproteins to Crystal Bank. Progress in the period has been close to market expectations. Sareum hasdemonstrated that it is able to considerably advance its in-house research bydeveloping programmes to plan whilst at the same time investing in strategicalliances to develop candidate drug molecules, whilst increasing its revenuegenerating activities by more than fourfold. This is a particularly creditableperformance confirming the strength of the technology, its attractiveness tomajor players in drug discovery and the ability of the team to deliver resultsthat satisfy the needs of our internal programmes and those of our clientcompanies. Financials During this period revenues amounted to almost £1.5 Million with approx. 75% ofthis figure being earned in the second half of the year, reflecting thecontinuing increase in business development activity throughout the year. Lossesafter taxation for the period were £624,000 representing a loss per share of0.18p. Encouragingly, the after tax loss for the second half of the period was£22,000, indicating that the Company is close to its stated goal of fullyfunding its in-house research through its revenue generating collaborations. Thecash position increased to £528,000, underpinned by the £0.5 Million put andcall option exercised by Billam AG in February 2006. Outlook Sareum has enjoyed a particularly productive and successful year, substantiallymeeting market expectations and continuing to deliver on its business strategy.The Directors continue to work to develop the Company's structure-based drugdiscovery programmes and services business and remain confident about futureprospects. 4 September 2006Dr Paul HarperChairman Sareum Holdings plc Chief Executive's Review Strategy and Business Model Sareum's strategy is to advance its own in-house research into novel cancertherapies whilst generating revenues through the provision of specialist drugdiscovery services to the pharmaceutical industry. Our business model comprises two main components: 1) Investment in proprietary research into novel cancer therapeutics togenerate drug candidates for partnering with pharmaceutical companies at theearly clinical or pre-clinical trials stage. Our collaboration with the Cancer Research UK Centre for Cancer Therapeutics atthe Institute of Cancer Research enables us to share the risks involved in drugdiscovery and to access specialist biology capabilities from one of the world'sleading cancer research organisations. We entered this collaboration in July2005 and recently have announced the discovery of novel compounds that areeffective in cancer cell models. During the next period we will continue to apply our unique and innovativestructure-based approaches in these programmes to rapidly optimise the selectedlead compounds with the aim of selecting a candidate for pre-clinical scale-upand toxicology studies in mid 2007. 2) Generation of revenues through the provision of specialist drugdiscovery services to pharmaceutical company customers. During this period we signed collaborations in Europe with Almirall Prodesfarma,Schering AG, Organon, Lundbeck and UCB, and established a strong presence in theUS with Infinity, Idenix and Sirtris. The collaborations with Organon and Idenixmark our first multi-disciplinary collaborations that deploy our fragmentsscreening and discovery chemistry capabilities in addition to our ability tosolve protein structures. We also launched "Crystal Bank", a collection of therapeutically relevantproteins that we are using to accelerate the discovery of potential drugcandidates. Crystal Bank demonstrates our ability to successfully solve thestructures of important target proteins in drug discovery, for example theimportant oncology target, Bcl-2, which, to date, has been the basis of threecollaborations. Our unique technology platforms and experienced scientific staff, combined withour integrated chemistry and biology capabilities have enabled us to meet andoften exceed our customers' expectations, as exemplified by the announcements ofsuccess in our collaborations with Schering AG and Almirall. As well as leadingto repeat business, this track record provides solid evidence of ourcapabilities. We will continue to build on this tremendous business development record. Inaddition to our ongoing activities in Europe and the USA we have been active inJapan, a major market for outsourced pharmaceutical research. Objectives for the coming year We look forward to successfully building on the solid foundation created in oursecond trading year. Our primary objective is to advance our in-house drug discovery pipeline todeliver drug candidates positioned to attract lucrative partnering deals withpharmaceutical companies. We will continue to advance these programmes, filingdrug patent applications during the coming year, and developing drug candidatesfor pre-clinical studies in 2007/8. Additionally, we will seek to add furtherprograms to this pipeline, either by licence, collaboration or acquisition. We will continue to advance our worldwide business development pipeline togenerate the revenues to support our current drug discovery pipeline. Inaddition to securing repeat business from our impressive list of currentcustomers, we will seek to sign longer term collaborations, potentiallyincluding clinical development milestones, with major internationalpharmaceutical companies. We look forward to announcing successful results fromthese existing and developing relationships. 4 September 2006Dr Tim MitchellCEO Sareum Holdings plc Consolidated profit and loss account For the year ended 30 June 2006 2006 2005 £ £ £ £Turnover 1,475,792 332,335 Cost of sales 1,080,278 798,599Gross profit (loss) 395,514 (466,264) Administrative expenses 1,145,792 912,350Operating loss (750,278) (1,378,614) Interest receivable 10,478 28,846Interest payable (12,586) (13,786) (2,108) 15,060Loss on ordinary activities before taxation (752,386) (1,363,554) Tax on loss on ordinary activities (128,040) (119,796)Loss on ordinary activities after taxation (624,346) (1,243,758) Basic and diluted earnings per share (0.0018) (0.0042) The loss on ordinary activities before taxation arises from the Group'soperations all of which are continuing. There are no recognised gains or losses other than as stated in the profit andloss account. Consolidated balance sheet As at 30 June 2006 2006 2005 £ £ £ £Fixed assets Intangible assets 17,499 23,498Tangible fixed assets 792,072 964,455 809,571 987,953Current assets Debtors 436,982 362,191Cash at bank 528,476 441,435 965,458 803,626Creditors: amounts falling due within one year 517,010 378,762Net current assets 448,448 424,864 Total assets less current liabilities 1,258,019 1,412,817 Creditors: amounts falling due after more than 62,702 93,154one yearNet assets 1,195,317 1,319,663 Capital and reserves Called up share capital 93,187 86,937Share premium account 3,088,108 2,594,358Merger reserve 27 27Profit and loss account (1,986,005) (1,361,659)Equity shareholders' funds 1,195,317 1,319,663 Company Balance Sheet As at 30 June 2006 2006 2005 £ £ £ £Fixed assets Investment in subsidiary 30,000 30,000Debtors Long term debt - subsidiary 2,958,387 2,549,971Net current assets 2,958,387 2,549,971 Net assets 2,988,387 2,579,971 Capital and reserves Called up share capital 93,187 86,937Share premium account 3,088,108 2,594,358Profit and loss account (192,908) (101,324)Equity shareholders' funds 2,988,387 2,579,971 Consolidated cash flow statement For the year ended 30 June 2006 2006 2005 £ £Net cash (outflow)/inflow from operating activities (362,664) (1,553,557)Returns on investment and servicing of finance (2,108) 15,060Taxation 119,796Capital expenditure (66,145) (880,983)Cash flow before financing (311,121) (2,419,480)Financing 398,162 2,719,287Increase in cash 87,041 299,807 NOTES TO THE FINANCIAL STATEMENTS 1 General The financial information set out above does not constitute statutory accountswithin the meaning of s.240 of the Companies Act 1985. 2 Basis of accounting The financial statements have been prepared under the historical cost conventionand in accordance with applicable UK accounting standards. 3 Earnings per share The basic and diluted earnings per share is calculated on the loss after tax of£624,346 and a weighted average number of shares of 359,403,542 (2005:295,115,883). The calculation of diluted earnings per share takes account ofshare options that have vested. This information is provided by RNS The company news service from the London Stock Exchange