Tissue Regenix Group Regulatory News (TRX)

Tissue Regenix Group plc ("Tissue Regenix" or "the Group")

Interim Results for the six months ended 31 July 2012

YORK, 4th October 2012 - Tissue Regenix, 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 interim results for the six months ended 31 July 2012.

Operational Highlights

·; dCELL® Meniscus preclinical study completed - results to be announced later this year

·; dCELL® Human Dermis presented at the prestigious Symposium for Advanced Wound Care in Atlanta. Further encouraging interim data has been published today

·; Yale University study into cell re-population shows dCELL® matrix in vascular patches outperforms competitor product

·; Recruitment of additional staff, including a head of commercialisation for our cardiac opportunities, to help drive our expanded development plan 

·; Strong pipeline of products, reinforced by clinical trial data, will result in commercialisation of some of these products in 2013

Financial Highlights

·; Planned increased investment in multiple development programmes and headcount resulted in an increased operating loss of £2,085k (H1 2011: £1,358k)

·; Net cash at the end of the period was £26,106k (H1 2011: £4,848k) having raised £25m (gross) by way of a share placing in December 2011

Antony Odell, Tissue Regenix Managing Director, commented:

"This has been another important six months for Tissue Regenix with the new funding now being deployed to drive our development plans in our four core areas of Advanced Wound Care, Orthopaedics, Cardiac and Vascular.

Over the period yet more preclinical and clinical data has shown the benefits of the dCELL® approach. The two year dCELL® Vascular Patch data was recently published as well as a case study from the human dCELL® Dermis pilot clinical and further interim data today. The dCELL® Meniscus preclinical data is due to be published before the end of the year and a number of different products including the ligament and cardiac patch are due to enter preclinical studies. In short the Company's product pipeline continues to develop and grow supported by strong data derived from 'real world' clinical needs.

In addition, Tissue Regenix has been selected as one of only twenty UK healthcare companies by UK Trade & Investment (UKT&I) to attend the Future Healthcare Mission to showcase the best in UK medical and healthcare science and technology to US investors and business partners.

We believe Tissue Regenix is an excellent example of a British company with world-beating technology, which is based on research conducted in UK universities and pioneered through patient treatment in the NHS. We remain committed to becoming a global leader in regenerative medicine through the development of new healthcare technologies".

Enquiries:

Newgate Communications: 020 7680 6550

Alistair Kellie

Andrew Adie

Martin Greig

Tissue Regenix: 01904 435 176

Antony Odell

Ian Jefferson

Peel Hunt LLP: 020 7418 8900

James Steel

Vijay Barathan

Chairman's Statement

Overview

We continue to make good progress in the development and commercialisation of our pipeline of products. We aim to become a global leader in regenerative medicine and having raised £25m (gross) by way of a share placing in December 2011 we are well placed to achieve that goal.

The dCELL® process

Our proprietary platform technology, dCELL®, is protected by a library of patents. It is used to decellularise human or animal donor tissue in order to create biological scaffolds that are then implanted into patients to replace diseased or damaged parts of their body. Since the tissue has been decellularised there is no need for anti-rejection drugs. These scaffolds are also capable of regeneration through natural bodily functions and because they are inert when implanted, they are classified as medical devices. This means they are required to follow a regulatory pathway that is typically faster and less costly than, for example, a pharmaceutical product.

Product Development

Advanced Wound Care

The human dermis clinical trial on chronic wounds continues to produce encouraging results. Further interim data has been released today and the final results of the study will be available soon. We will also be undertaking a registry study to provide a UK database to demonstrate the effectiveness of the product. We are beginning discussions for a clinical study in the USA. Early discussions with potential suppliers of the human dermis material are underway and we also continue to develop the equivalent porcine product. We are in the process of hiring a head of wound care to lead the commercialisation opportunities we see across the wound care space.

Orthopaedic

The preclinical study of the meniscus repair product has been encouraging with results expected to be released later this year. We will be looking to commence clinical trials in 2013 when we have completed biomechanical testing and refined the suturing technique. A US preclinical study is also planned following a pre-IDE discussion with the FDA. The anterior cruciate ligament repair product will be in preclinical studies by H1 2013 and we have begun discussions with the FDA in respect of approval requirements for the US market. As we move nearer to clinical and preclinical trials we are developing health economic models to support later commercialisation.

Cardiac

Pilot work with cardiac patches for mitral valve repair and pericardial patching has gone well and we intend to commence preclinical studies in H1 2013. A number of product enhancements are being introduced to an existing bioprosthetic valve which will become the design for a dCELL® version prototype that will be available for preclinical trials by mid-2013. We have commenced discussions with tissue banks for the commercialisation of the dCELL® human heart valve and a porcine version will be undergoing process optimisation work by the end of this calendar year. In order to support these development and commercialisation plans we have recently appointed a head of the cardiac therapy area.

Vascular

A pilot study for the AV graft is now in progress with plans for a preclinical study in H2 2013. Two year data was recently released for the existing vascular patch and we will be meeting the FDA shortly to progress US approval.

Financial Review

Administrative expenditure increased to £2,087k (H1 2011: £1,466k) reflecting additional headcount and product development costs incurred as we started to deploy the funds raised on multiple development programmes. As a result of this investment the operating loss for the period increased to £2,085k (H1 2011: £1,358k). Net cash at the end of the period was £26,106k (H1 2011: £4,848k).

Outlook

The programmes we have in place address acute needs in very large healthcare markets, including the US. Successful development of our range of cost effective products will also help relieve huge financial burdens being placed on healthcare providers around the world. Demand for products in regenerative medicine is forecast to increase and this, coupled with the chronic shortage of human donor tissue, gives me confidence that we are well positioned to create a global leader in our field.

John Samuel

Executive Chairman

4 October 2012

The loss for the period arises from the Group's continuing operations.

Approved by the Board and authorised for issue on 4 October 2012

John Samuel (Executive Chairman) Ian Jefferson (Chief Financial Officer)

1. Basis of preparation

The interim financial statements of Tissue Regenix Group Plc are unaudited condensed consolidated financial statements for the six months to 31 July 2012. These include unaudited comparatives for the six months to 31 July 2011 together with the audited accounts for the year to 31 January 2012.

These condensed consolidated financial statements do not constitute statutory accounts. The statutory accounts for the year to 31 January 2012 have been reported on by the auditors to Tissue Regenix Group Plc and have been filed with the Registrar of Companies. The report of the auditors was unqualified and did not contain a statement under section 498 of the Companies Act 2006.

2. Significant accounting policies

The condensed consolidated financial statements have been prepared under the historical cost convention in accordance with International Financial Reporting Standards as adopted by the European Union.

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 July 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 the bulk of 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

The Group has accumulated losses available to carry forward against future trading profits. No deferred tax asset has been recognised in respect of tax losses.

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 period 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 period to assume conversion of all dilutive potential ordinary shares.

The Company has issued employees options over 15,591,356 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 periods concerned.

6. Share capital

7. Movement in revenue reserve and own shares

8. Interim financial report

A copy of this interim report will be distributed to shareholders and is also available on the Company's website at www.tissueregenix.com