SUMM.L Regulatory News (SUMM)

12 Oct 2005 07:00

VASTox plc12 October 2005 For immediate release 12 October 2005 VASTox plc Interim Results Oxford, UK: 12 October 2005 - VASTox plc (AIM: VOX), the drug discovery andservices business specialising in chemical genomics, today announces its interimresults for the six months ended 31 July 2005. Highlights • Turnover increased to £201,000 (H1 2005: £42,000) • Progress in the Duchenne Muscular Dystrophy and Tuberculosis programmes • Initiation of a third proprietary programme in Spinal Muscular Atrophy • Loss after tax £122,000 (H1 2005: loss of £44,000) • Relocation of all staff into a state-of-the-art 15,000 square foot facility in Milton Park, Oxfordshire Commenting on the Group's interim results, Steven Lee, Chief Executive Officerof VASTox plc, said: "VASTox became a public company in October 2004 to accelerate both our chemicalgenomics services business and our proprietary drug discovery programmes. Withsales up nearly five-fold, and compounds in our lead DMD programme enteringefficacy studies, we have delivered a step-change in operations. All this wasachieved whilst maintaining good financial discipline and consolidating all ofthe company in one excellent facility. We have now built a base from which ourshareholders will see continued business successes and accelerated value growth." For more information please contact: VASTox plc (www.vastox.com)Dr Steven Lee, Chief Executive Officer On the day: 07766 913 898 Afterwards: 01235 443 901 Buchanan Communications 020 7466 5000Tim Anderson, Mark Court, Mary-Jane Johnson Chairman and Chief Executive's statement Introduction During the past six months we have made significant advances in all areas of thebusiness. With a strong sales pipeline, progress on in-house proprietaryprogrammes and a new dedicated £3m chemical genomics facility, the company isentering its next stage of development and value growth. Services Sales for the half year have increased to £201,000 compared with £42,000 for theperiod to 31 July 2004 (£113,000 for the year to 31 January 2005). The increasein sales reflects the pharmaceutical and agrochemical industries beginning tovalue our genomics platform for both gene target identification and predictivetoxicity testing of potential drugs. Since January we have signed six deals with five new customers for chemicalgenomics and chemistry services. These deals range from fee-for-service to afull R&D collaboration with a top-tier agrochemical company where VASTox retainsall rights to intellectual property generated relating to drug discovery. Product development We have responded to the challenges facing the pharmaceutical industry byleveraging our expertise in compound screening and high-throughput in-vivotoxicology to produce a comprehensive range of value-added services. We nowoffer services in: • Cardiotoxicity • Acute toxicity • Hepatotoxicity • Genotoxicity • Carbohydrate synthesis • Medicinal chemistry These offerings have created real industry excitement. Cardiotoxicity forexample causes one in three drug candidates to fail; an effect that is often notseen until the late stages of clinical trials or even when the drug is in themarketplace. By using zebrafish we can provide rapid and highly predictivein-vivo data on the toxicity of our clients' compounds, saving cost and time. Programmes VASTox does not fund in-house research to derive proprietary drug discoveryprogrammes. Instead, the company leverages its relationships within the globalacademic community to initiate innovative programmes with minimal up-frontinvestment. Our first two programmes, in Duchenne Muscular Dystrophy (DMD) and Tuberculosis(TB) are based on the work of founding scientists Professors Kay Davies andEdith Sim respectively. Both academics are world-leading experts in theirfields having spent many years developing an understanding of these diseases toa point where commercial drug discovery can take place. In July we announced that Spinal Muscular Atrophy (SMA) would be the focus forour third proprietary drug discovery programme, after DMD and TB. SMA is afatal genetic condition that affects approximately 50,000 patients worldwide.The disease usually appears in young children and patients usually die beforetheir teens. There is currently no adequate treatment for this disease. Most drugs fail through toxic or unwanted side effects, rather than lack ofefficacy. We believe that our in-house drug programmes will stand a greaterchance of success because we will use our screening and toxicology technologiesbefore starting clinical trials. Scientific Advisory Board Since January we have strengthened our scientific advisory board through therecruitment of Professor Francesco Muntoni, a paediatric neurologist working atImperial College London; Professor Roger Patient, an expert in zebrafish andcardiovascular diseases currently research professor at the Weatherall Instituteof Molecular Medicine at the University of Oxford; Professor David Paterson, anexpert in cardiovascular diseases at the University of Oxford; and Dr Marcel vanden Heuvel, a group leader at the Medical Research Council Genetics Unit at theUniversity of Oxford and an expert in SMA and Drosophila. We will continue tomake selective appointments where we find talented and like-minded scientists. As our Scientific Advisory Board strengthens and our network of academiccollaborators grows we are building a pipeline of potential drug discoveryprogrammes. We will continue to select and fund those programmes that combineinnovative science, accomplished academics and well-developed assays. Operations Since January 2005 we have completed the move from university incubationlaboratories to a state-of-the-art, 15,000 square foot facility in Milton Park,Oxfordshire. For the first time since our inception, all the company'sbiologists, chemists and managers are working in the same facility. We believethat our customers are already benefiting from this synergy. We have recruiteddrug discoverers from industry to turn innovative academic science intopromising drug discovery programmes. We now have the people and facilities to grow both our services business anddrive our existing programmes. Board changes As we approach our first anniversary as a public company we have reviewed thecomposition of the Board as we begin our next phase of growth. We recently announced the appointment of Sir Brian Richards CBE as Non-ExecutiveDirector. Sir Brian was a pioneer of the European biotechnology industry in thelate 1980s, and continues to be a driving force within the sector. Histremendous industry experience and track record of success in growing biotechcompanies will be invaluable to VASTox. Andrew Mulvaney, Chief Operations Officer and founding scientist, will bestepping down from the Board to focus on a full-time role in sales and businessdevelopment. We thank Andy for his hard work and contribution to the growth ofthe company from its start-up stages in an all round operational capacity. Outlook We have achieved a great deal in the past twelve months since our listing on AIMin October 2004, and have set aggressive growth targets over the next fiveyears. For the remainder of the financial year we see increased activity in ourservices business, advances in our drug discovery programmes and the initiationof a further proprietary programme. From the strong business base built over the past year, we now have anopportunity to further accelerate the growth of our services division, ourexisting proprietary programmes and the engine for starting more new innovativeprogrammes. Prof. Stephen Davies Steven Lee, PhDChairman Chief Executive Officer 12 October 2005 Consolidated profit and loss accountfor the six months ended 31 July 2005 Unaudited Unaudited Restated Six months Six months Year ended ended ended 31 July 31 July 31 January 2005 2004 2005 £ £ £ Turnover 201,156 41,950 112,718 Cost of sales (75,894) (21,570) (90,200) Gross profit 125,262 20,380 22,518 Administrative expensesResearch and development (159,069) - (267,533)Other (393,235) (64,979) (40,348) (552,304) (64,979) (307,881) Operating loss (427,042) (44,599) (285,363) Interest receivable 305,322 582 215,368 Loss on ordinary activities before taxation (121,720) (44,017) (69,995) Tax on loss on ordinary activities - - 24,321 Loss on ordinary activities after taxation (121,720) (44,017) (45,674) Basic loss per ordinary share 0.39p 0.22p 0.19p Consolidated balance sheet at 31 July 2005 Unaudited Unaudited Restated 31 July 31 July 31 January 2005 2004 2005 £ £ £Fixed assetsTangible assets 1,139,645 - 1,353Intangible assets 35,000 - 20,000 1,174,645 - 21,353 Current assetsDebtors 429,687 1,950 93,140Cash on short term deposits 12,900,000 - 13,800,000Cash at bank 19,730 97,320 361,252 13,349,417 99,270 14,254,392 Creditors: amounts falling due within one year (555,886) (117,053) (185,849) Net current assets 12,793,531 (17,783) 14,068,543 Net assets 13,968,176 (17,783) 14,089,896 Capital and reservesCalled up share capital 3,131,311 1,000 3,131,311Share premium account 12,946,848 99,000 12,946,848Other reserves (1,942,589) - (1,942,589)Profit and loss account (167,394) (117,783) (45,674)Equity shareholders' funds 13,968,176 (17,783) 14,089,896 Consolidated cash flow statementfor the six months ended 31 July 2005 Unaudited Unaudited Restated Six months Six months Year ended ended ended 31 July 31 July 31 January 2005 2004 2005 £ £ £ Net cash flow from operating activities (371,110) (16,629) (184,863) Returns on investment and servicing of finance 305,322 582 215,368 Capital expenditure (1,175,734) - (6,803) Cash (outflow) inflow before management of liquid (1,241,522) (16,047) 23,702resources and financing Management of liquid resources 900,000 - (13,800,000)Financing - 33,776 14,057,959 Increase (decrease) in cash in the period (341,522) 17,729 281,661 Reconciliation of operating loss to net cash outflow from operating activities Unaudited Unaudited Restated Six months Six months Year ended ended ended 31 July 31 July 31 January 2005 2004 2005 £ £ £ Operating loss (427,042) (44,599) (285,363)Depreciation charge 18,645 - 450Amortisation of intangible fixed assets 3,797 - 5,000Increase of debtors (336,547) (1,748) (68,615)Increase of creditors 370,037 29,718 163,665Net cash outflow from operating activities (371,110) (16,629) (184,863) Notes to the interim results 1. Basis of preparation The results for the half-year are unaudited and do not constitute statutoryaccounts within the meaning of section 240 of the Companies Act 1985. They havebeen prepared on the same basis as the accounts for the year ended 31 January2005. The comparatives for the full year ended 31 January 2005 are not the company'sfull statutory accounts for that year. A copy of the statutory accounts forthat year has been delivered to the Registrar of Companies. The auditors'report (signed by the company's previous auditors) on those accounts wasunqualified and did not contain a statement under section 237 (2) - (3) of theCompanies Act 1985. Restatement The directors have reviewed the accounting treatment of share options in theaccounts for the year to 31 January 2005 in relation to UITF 17. The directorshave concurred that the share options were priced at the market value at thedate of grant. These accounts have therefore been restated to exclude thenon-cash charge of £453,351 for expensing of share options. This restatementhas had no effect on net assets or equity shareholders' funds. 2. Loss per share calculation The loss per share has been calculated by dividing the loss for the period of£121,720 (for the period ended 31 July 2004: loss of £44,017; for the year ended31 January 2005: loss of £45,674) by the weighted average number of 31,313,111shares in issue during the six month period to 31 July 2005 (for the six monthperiod ended 31 July 2004: 20,202,000; for the year ended 31 January 2005:23,442,741). Since the group has reported a net loss, diluted loss per share is equal tobasic loss per share. 3. Analysis of changes in net funds Unaudited Unaudited Six months Six months Year ended ended ended 31 July 31 July 31 January 2005 2004 2005 £ £ £ Movement in cash in the year (341,522) 17,729 281,661Cash (inflow) outflow from movement in liquid (900,000) - 13,800,000resources Opening net funds 14,161,252 79,591 79,591Closing net funds 12,919,730 97,320 14,161,252 4. Copies of this interim report are being sent to all shareholders. Copies are also available at the Registered Office of the Company: VASTox plc, 91 Milton Park, Abingdon, Oxfordshire, OX14 4RY. The interim results were approved by the Board of Directors on 11 October 2005. This information is provided by RNS The company news service from the London Stock Exchange