Last checked at 10 May 2012 07:00
Tissue Regenix Group Plc
Preliminary results to 31 January 2012
YORK, 10 May 2012 - Tissue Regenix Group Plc ("Tissue Regenix" or "the Group"), the regenerative medical devices company which uses animal or human tissue to replace damaged or worn out parts of the human body, today announces its unaudited preliminary results for the year ended 31 January 2012.
Operational Highlights
·; Pivotal preclinical evaluation of dCell® Meniscus completed, results expected in the second half of the year
·; Agreement signed with PUCPR (Pontifical University of Parana, Brazil) and Cardioprotese Ltda providing exclusive worldwide rights to their decellularised technology pipeline and preclinical testing facilities in Brazil
·; Decellularised human heart valve data from Cardioprotese Ltda demonstrating superiority to cryopreserved valves presented at several major conferences. Early-stage discussions with a number of major tissue banks regarding commercialisation are on-going
·; NHSBT pilot study of the use of human donor decellularised skin in the treatment of chronic wounds continues with promising early results
·; dCell® Vascular Patch clinical acceptance continuing to build, first carotid patients implanted in UK
Financial Highlights
·; £25.0m raised (before expenses) via a share placing completed in December 2011 supported by a major new institutional investor and a number of existing shareholders
·; Increased expenditure on product programmes resulted in an increased loss after tax of £2.7m (2011: £1.7m, excluding deemed cost of reverse acquisition of £3.7m)
·; Cash and short term deposits as at 31 January 2012 of £28.0m (2011: £5.9m)
Antony Odell, Tissue Regenix Managing Director, commented:
"Last year was a pivotal year for Tissue Regenix: the December 2011 fund raising, as well as providing a significant endorsement of the commercial potential of our innovative technology platform, has enabled us to progress simultaneously the development of a number of programmes addressing a range of different clinical needs in orthopaedics, cardiology, advanced woundcare and vascular medicine. We believe that the investment we have and continue to make in these areas will enable us to become a significant global player in regenerative medicine.
We look forward to continuing our progress across several programmes during 2012 and to further building on the clinical acceptance of our technology."
Enquiries:
Tissue Regenix: | 01904 435 176 |
Antony Odell | |
Ian Jefferson | |
FTI Consulting: | 020 7831 3113 |
Ben Atwell | |
John Dineen | |
Peel Hunt LLP: | 020 7418 8900 |
James Steel | |
Vijay Barathan |
About Tissue Regenix
Tissue Regenix, the RegenMed Company, was incorporated in May 2006 to commercialise the academic research of Professor Eileen Ingham and Professor John Fisher from the University of Leeds in the field of tissue decellularisation. Its dCELL® Technology comprises a patented process which removes cells and other components from human and animal tissue allowing it to be used without anti-rejection drugs to replace worn out or diseased body parts.
Chairman's Statement
Overview
We continue to make good progress in the development of a number of products addressing a range of needs across multiple therapeutic areas, utilising our proprietary platform technology, dCell®. Our goal is to become a global leader in regenerative medicine. The successful share placing in December 2011, which raised £25.0m (before expenses), has greatly enhanced our momentum by allowing us to develop a number of products in parallel.
The dCell Process
The dCell® process is protected by a library of patents and is used to create biological scaffolds by decellularising human or animal tissue. These scaffolds are intended to replace damaged or diseased parts of the human body and have been shown to be capable of regeneration, thereby becoming integrated into the patient. Because the scaffolds are inert on implantation and the subsequent regeneration has been shown to occur through natural bodily functions, they are classified as medical devices and therefore follow a regulatory pathway which is typically faster and less costly than, for example, pharmaceutical products.
Product Development
Cardiac
We are continuing to prepare the data required to support the development of a dCell® version of an existing bioprosthetic heart valve, which has already been used in over 1200 patients. The dCell® process has been used with human donor valves in over 140 patients and with encouraging results covering a period of over five years. Discussions are at an early stage to develop commercial agreements with tissue banks and work has commenced on both aortic and pulmonary replacement porcine heart valves. Although at an early stage we believe these products have the potential to represent a tremendous advance in this field.
Dermis
The pilot study of the use of human donor decellularised skin in the treatment of chronic wounds, which was initiated with our UK development partner NHSBT, continues with very early but promising results. We expect preliminary clinical data to be available towards the end of 2012. A porcine donor version is also under examination.
Vascular
Two year follow up data for the dCell® Vascular Patch will be available later this year and we continue to build clinical evidence and experience to assist in its commercialisation. Dialogue with the FDA continues in respect of approval of its use in the USA and we are preparing additional data that they have requested. Thus far its use has been mainly in the femoral position (arteries of the thigh) and we are examining how it may best be used by surgeons in carotid applications (arteries of the head and neck). A pre-pilot study for a cardiac patch is under way and showing early signs of promise and we expect a study of its use in patching the dura will be underway soon. Also, we continue to progress the Arterial-Vascular graft, which can be used to replace damaged veins and arteries, with our development partners in Brazil.
Orthopaedic
The preclinical trial of our porcine meniscal repair product is nearing its end and we expect data to be available in the second half of the year. There is a very large but un-met clinical need for this product and initial surgeon feedback has been encouraging. We have also begun to refine production processes for a porcine ligament repair product and will commence preclinical work shortly.
Financial Review
During the year we raised £25.0m (before expenses) through a placing of shares achieved in very demanding market conditions, with support from a major new institutional shareholder, Invesco Asset Management Limited, plus a number of our existing shareholders. The purpose of the fund-raising was to enable the development of a number of products simultaneously. As at the year end the cash balance was £28.0m (2011: £5.9m). Operating income of £0.1m (2011: £0.2m) was comprised mainly of grant income. Administrative expenses increased to £3.1m (2011: £2.1m) primarily due to increased development spend on new product trials and additional staff costs incurred as we began to scale up to develop multiple products concurrently. As a result of these investments, the operating loss for the period increased to £3.0m (2011: £1.9m excluding £3.7m of deemed cost on reverse acquisition).
The Board and external recognition
There have been no changes in the composition of the Board since the previously announced appointment of Ian Jefferson as Chief Financial Officer on 13 June 2011. I am however delighted that external recognition has been given to our development partners at Leeds University. The Institute of Medical and Biological Engineering at the University was awarded the Queens Diamond Jubilee Award for Higher and Further Education for their work in the field of regenerative medical devices.
Outlook
The chronic global shortage of donor tissue will result in clinical demand for products to address this issue continuing to increase. Tissue Regenix's programmes in Cardiac, Orthopaedics, Vascular and Advanced Woundcare are ideally placed to provide long term solutions to replace and regenerate diseased or aging body parts. Markets like advanced wound care (which has estimated revenues of $5bn per year globally) continue to grow as conditions such as chronic wounds and diabetic foot ulcers place huge burdens on healthcare systems and are prime candidates for products based on our technology platform.
The fundraising which we successfully achieved in 2011 leaves me confident that we are now ideally positioned to capitalise on major market needs and become a leader in regenerative medicine. Our product pipeline continues to progress well and we are looking forward to being in a position to advance these through a range of trials with the intention of commercialising them in due course.
John Samuel
Executive Chairman
9 May 2012
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 JANUARY 2012
2012 | 2011 | ||
£000 | £000 | ||
OPERATING INCOME | 109 | 173 | |
Administrative expenses | (3,097) | (2,117) | |
Deemed cost on reverse acquisition | - | (3,749) | |
OPERATING LOSS | (2,988) | (5,693) | |
Finance income | 62 | 28 | |
LOSS BEFORE TAXATION | (2,926) | (5,665) | |
Taxation | 239 | 238 | |
LOSS AFTER TAX ATTRIBUTABLE TO EQUITY HOLDERS OF THE PARENT | (2,687) | (5,427) | |
LOSS AND TOTAL COMPREHENSIVE EXPENSE FOR THE YEAR | (2,687) | (5,427) | |
LOSS PER SHARE | |||
Basic and diluted on loss from continuing operations | (0.57)p | (1.48)p |
There are no items of other comprehensive income. The loss for the period arises from the Group's continuing operations.
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR TO 31 JANUARY 2012
Share Capital | Share Premium | Merger Reserve | Reverse Acquisition Reserve | Issued Equity Capital | Share Based Payment Reserve | Revenue Deficit Reserve | Total | ||
£000 | £000 | £000 | £000 | £000 | £000 | £000 | £000 | ||
At 31 January 2010 | 600 | 4,333 | - | (1,054) | 3,879 | 1 | (2,593) | 1,287 | |
Loss and total comprehensive expense for the year | - | - | - | - | - | - | (5,427) | (5,427) | |
Reverse acquisition | 1,210 | - | 10,884 | (6,094) | 6,000 | - | - | 6,000 | |
Issue of shares | 533 | 4,803 | - | - | 5,336 | - | (836) | 4,500 | |
Expenses on issue of shares | - | (481) | - | - | (481) | - | - | (481) | |
Employee interest in jointly owned shares | - | - | - | - | - | - | 8 | 8 | |
Share based payment expense | - | - | - | - | - | 331 | - | 331 | |
At 31 January 2011 | 2,343 | 8,655 | 10,884 | (7,148) | 14,734 | 332 | (8,848) | 6,218 | |
Loss and total comprehensive expense for the year | - | - | - | - | - | - | (2,687) | (2,687) | |
Issue of shares | 919 | 24,094 | - | - | 25,013 | - | (4) | 25,009 | |
Expenses on issue of shares | - | (784) | - | - | (784) | - | - | (784) | |
Employee interest in jointly owned shares | - | - | - | - | - | - | 1 | 1 | |
Share based payment expense | - | - | - | - | - | 122 | - | 122 | |
At 31 January 2012 | 3,262 | 31,965 | 10,884 | (7,148) | 38,963 | 454 | (11,538) | 27,879 | |
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 31 JANUARY 2012
2012 | 2011 | ||
£000 | £000 | ||
ASSETS | |||
Non-current assets | |||
Property, plant and equipment | 157 | 189 | |
TOTAL NON-CURRENT ASSETS | 157 | 189 | |
Current assets | |||
Trade and other receivables | 350 | 393 | |
Cash and cash equivalents | 28,021 | 5,889 | |
TOTAL CURRENT ASSETS | 28,371 | 6,282 | |
TOTAL ASSETS | 28,528 | 6,471 | |
LIABILITIES | |||
Current liabilities | |||
Trade and other payables | (649) | (253) | |
TOTAL LIABILITIES | (649) | (253) | |
NET ASSETS | 27,879 | 6,218 | |
EQUITY | |||
Share capital | 3,262 | 2,343 | |
Share premium | 31,965 | 8,655 | |
Merger reserve | 10,884 | 10,884 | |
Reverse acquisition reserve | (7,148) | (7,148) | |
Issue equity capital | 38,963 | 14,734 | |
Share based payment reserve | 454 | 332 | |
Revenue reserve | (11,538) | (8,848) | |
TOTAL EQUITY | 27,879 | 6,218 |
Approved by the Board and authorised for issue on 9 May 2012
John Samuel (Executive Chairman) Ian Jefferson (Chief Financial Officer)
CONSOLIDATED CASH FLOW STATEMENT
FOR THE YEAR ENDED 31 JANUARY 2012
2012 | 2011 | ||
£000 | £000 | ||
Operating activities | |||
Operating loss | (2,988) | (5,693) | |
Adjustment for non-cash items: | |||
Depreciation of property, plant and equipment | 62 | 46 | |
Share based payment | 122 | 331 | |
Deemed cost of reverse acquisition | - | 3,749 | |
Tax refunded | 280 | 183 | |
Operating cash outflow | (2,524) | (1,384) | |
Decrease/(increase) in trade and other receivables | 2 | (68) | |
Increase/(decrease) in trade and other payables | 396 | (24) | |
Net cash outflow from operations | (2,126) | (1,476) | |
INVESTING ACTIVITIES | |||
Interest received | 62 | 28 | |
Purchases of property, plant and equipment | (30) | (100) | |
Net cash outflow from investing activities | 32 | (72) | |
FINANCING ACTIVITIES | |||
Cash acquired on reverse acquisition | - | 2,327 | |
Proceeds from issue of share capital | 25,009 | 4,500 | |
Sale of joint interest in shares to employees | 1 | 8 | |
Expenses on of issue of share capital | (784) | (481) | |
Net cash inflow from financing activities | 24,226 | 6,354 | |
Increase in cash and cash equivalents | 22,132 | 4,806 | |
Cash and cash equivalents at start of year | 5,889 | 1,083 | |
CASH AND CASH EQUIVALENTS AT END OF YEAR | 28,021 | 5,889 |
The Company's annual report and accounts for the year ended 31 January 2012 have been published today and will be posted to shareholders shortly. The annual report and accounts are also available in electronic form for download on the Company's website, www.tissueregenix.com.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JANUARY 2012
1. Basis of preparation
The preliminary results of the year ended 31 January 2012 have been extracted from audited accounts which have not yet been delivered to the Registrar of Companies. The Financial Statements set out in this announcement do not constitute statutory accounts for the year ended 31 January 2012. The report of the auditors on the statutory accounts for the year ended 31 January 2012 was unqualified and did not contain a statement under Section 498 of the Companies Act 2006. The Financial Statements for the year ended 31 January 2012 included in this announcement were authorised for issue in accordance with a resolution of the Board of Directors on 9 May 2012.
The Company is a limited liability company incorporated and domiciled in England & Wales and whose shares are quoted on AIM, a market operated by The London Stock Exchange.
2. Significant accounting policies
The Group's financial statements have been prepared in accordance with International Financial Reporting Standards ("IFRS") as adopted by the European Union as they apply to the financial statements of the Group for the year ended 31 January 2012 and applied in accordance with the Companies Act 2006.
The accounting policies adopted are consistent with those followed in the preparation of the audited financial statements of Tissue Regenix Group Plc for the year ended 31 January 2012 and are disclosed in those statements.
3. Segmental reporting
At 31 January 2012, the Group operated in one business segment, that of the development and commercialisation of innovative platform technologies in the field of tissue engineering and regenerative medicine.
To date all significant revenues comprise grant income earned in the UK. All of the Group's assets are held in the UK and all of its capital expenditure arises in the UK.
4. Taxation
Year to | Year to | |
31 January 2012 | 31 January 2011 | |
£000 | £000 | |
Current tax: | ||
UK corporation tax credit on losses of year | (239) | (167) |
Tax credits received in respect of prior years | - | (71) |
(239) | (238) | |
Deferred tax: | ||
Origination and reversal of temporary timing differences | - | - |
Tax credit on loss on ordinary activities | (239) | (238) |
The Group has accumulated losses available to carry forward against future trading profits of £4,624k (2011: £2,806k). No deferred tax asset has been recognised in respect of tax losses as their recoverability is uncertain. The unrecognised deferred tax asset would equate to £925k (2011: £589k)
NOTES TO THE FINANCIAL STATEMENTS continued
FOR THE YEAR ENDED 31 JANUARY 2012
5. Loss per share (basic and diluted)
Basic loss per share is calculated by dividing the loss attributable to equity holders of the parent by the weighted average number of ordinary shares in issue during the year excluding own shares held jointly by the Tissue Regenix Employee Share Trust and certain employees. Diluted loss per share is calculated by adjusting the weighted average number of ordinary shares in issue during the year to assume conversion of all dilutive potential ordinary shares.
Year to 31 January 2012 | Year to 31 January 2011 | |
£000 | £000 | |
Loss attributable to the equity holders of the parent | ||
Pre deemed cost on reverse acquisition | (2,687) | (1,678) |
Deemed cost on reverse acquisition | - | (3,749) |
Total loss attributable to the equity holders of the parent | (2,687) | (5,427) |
No. | No. | |
Weighted average number of ordinary shares in issue during the period | 469,184,667 | 366,159,076 |
Loss per share | ||
Basic and diluted on loss for the period | ||
Pre deemed cost on reverse acquisition | (0.57)p | (0.46)p |
Post deemed cost on reverse acquisition | (0.57)p | (1.48)p |
The Company has issued employee options over 16,036,328 ordinary shares and there are 17,540,386 jointly owned shares which are potentially dilutive. There is however, no dilutive effect of these issued options as there is a loss for each of the years concerned.
NOTES TO THE FINANCIAL STATEMENTS continued
FOR THE YEAR ENDED 31 JANUARY 2012
6. Share Capital
Share capital | Share premium | Merger reserve | Reverse acquisition reserve | Total | ||
Number | £000 | £000 | £000 | £000 | £000 | |
Allotted, issued and fully paid shares | ||||||
Ordinary shares of 0.1 p each as at 31 January 2010 | 600,000,000 | 600 | 4,333 | - | - | 4,933 |
Share consolidation 1 for 5 in to Ordinary shares of 0.5p each | (480,000,000) | - | - | - | - | - |
Issued to acquire the entire issued share capital of Tissue Regenix Limited | 241,885,103 | 1,210 | - | 10,884 | - | 12,094 |
Issued for cash | 90,000,000 | 450 | 4,050 | - | - | 4,500 |
Issued to Tissue Regenix Employee Share Trust | 16,712,800 | 83 | 753 | - | - | 836 |
Arising on reverse acquisition of Tissue Regenix Limited | - | - | - | - | (7,148) | (7,148) |
Expenses of issue of shares | - | - | (481) | - | - | (481) |
Total Ordinary shares of 0.5 p each as at 31 January 2011 | 468,597,903 | 2,343 | 8,655 | 10,884 | (7,148) | 14,734 |
Issued for cash | 181,818,182 | 909 | 24,091 | - | - | 25,000 |
Share options exercised | 1,136,376 | 6 | 3 | - | - | 9 |
Issued to Tissue Regenix Employee Share Trust | 827,586 | 4 | - | - | - | 4 |
Expenses of issue of shares | - | - | (784) | - | - | (784) |
Total Ordinary shares of 0.5p each as at 31 January 2012 | 652,380,047 | 3,262 | 31,965 | 10,884 | (7,148) | 38,963 |
7. Movement in revenue reserves and own shares
Retained Earnings Deficit | Own shares | Deficit Revenue Reserve | |
£000 | £000 | £000 | |
At 31 January 2010 | (2,593) | - | (2,593) |
Purchase of own shares | - | (836) | (836) |
Employee interest in jointly owned shares | - | 8 | 8 |
Loss for the year | (5,427) | - | (5,427) |
At 31 January 2011 | (8,020) | (828) | (8,848) |
Purchase of own shares | - | (4) | (4) |
Employee interest in jointly owned shares | - | 1 | 1 |
Loss for the year | (2,687) | - | (2,687) |
At 31 January 2012 | (10,707) | (831) | (11,538) |
8. Annual report and accounts
The Company's annual report and accounts for the year ended 31 January 2012 have been published today and will be posted to shareholders shortly. The annual report and accounts are also available in electronic form for download on the Company's website, www.tissueregenix.com.