RNS Number:5462V
Medisys PLC
11 December 2000
Medisys PLC
("Medisys" or "the Group")
Preliminary Results For The Year Ended 30 September 2000
Highlights
* Significant strategic milestones passed in the year:
- Placing and Open Offer raising #43.4 million
successfully completed in April 2000
- Move to a Official List of the UK Listing Authority
completed in June 2000
- FDA approval to market 3ml Futura safety syringe
received July 2000
Futura
* Needlestick Safety and Prevention Act signed into law in
US - Federal mandate for safety syringes now in place
* High volume Futura safety syringe manufacturing deal with
Nypro, the leading injection moulding business, announced
today
* Discussions with potential marketing and distribution
partners progressing, further developments expected in
the near future
Hypoguard
* Licensing agreements with Drew Scientific PLC and The
Medical House PLC contribute to 156% increase in
licensing revenues to #3.1 million
* Major progress achieved on final development of Dart
biosensor based diabetes monitoring product - 510(k)
filing with FDA expected during first half of 2001
* Acquisition of MEDgenesis provides US sales infrastructure
for diabetes monitoring business ahead of launch of next
generation products in the US market
David Wong, Chief Executive, commented:
"This has been a year of very significant progress for
Medisys. Development work on our portfolio of new medical
safety and diagnostics products is proceeding to plan and,
in particular, we are now entering the pre-launch phase of
the Futura safety syringe programme. The high volume
manufacturing deal with Nypro, announced today, is a
further important step and is our first manufacturing
agreement covering the US market.
"2001 will be a very important year for the Group, seeing
the market launch of the Futura safety syringe and the
first of our next generation diabetes monitoring products.
We expect both of these products to have a significant
impact on the Group's future performance."
Enquiries:
Medisys PLC 020 7663 5800
Michael Barry, Chief Financial Officer
Square Mile Communications 020 7601 1000
Kevin Smith/Becky Jewers
Medisys PLC
("Medisys" or "the Group")
Preliminary Results For The Year Ended 30 September 2000
Chairman's Statement
I am pleased to report that Medisys continued to make
significant progress during the year ended 30 September
2000.
The Group's principal focus during the period has been on
the development of its portfolio of new medical safety and
diagnostics products. A number of significant milestones
were passed during the year with the major highlight being
the receipt, in July, of FDA approval to market the 3ml
model of the Futura safety syringe.
In addition, the Group successfully raised #43.4 million net
of expenses from a Placing and Open Offer in April and
subsequently moved to the Official List of the UK Listing
Authority in June.
More recently, the Group announced that it had agreed to
purchase the diagnostics business of MEDgenesis Inc, a
wholly owned subsidiary of Chronimed Inc. The acquisition
will expand significantly the Group's diagnostics interests
and establish a strong foothold in the US diabetes
monitoring market, the world's largest market for blood
glucose tests.
Financial Review
Turnover for the year ended 30 September 2000 rose by 2% to
#9.0 million, compared to #8.8 million from continuing
operations for the year ended 30 September 1999.
Gross margin from continuing operations increased from 54%
in the last financial year to 56% in this financial year.
This improved margin was the result of increased license
fees, against which there is no cost of goods.
As expected, operating losses increased during the period to
#4.3 million (1999: operating loss of #1.1 million). The
increase was due to a number of factors. Amongst these was
a #0.8 million increase in amortisation charges specifically
relating to the enabling technologies acquired from Elan
Corporation plc in June 1999. A #0.5 million increase in
research and development expense and a #2.9 million increase
in administrative expenses were also contributory factors.
The key elements in the rise in administrative expenses were
an increase of #1.2 million in personnel costs resulting
from investment in management infrastructure throughout the
Group, as well as costs of approximately #0.4 million
relating to the move to the Official List.
Interest receivable increased to #1.4 million from #0.1
million in the prior year reflecting the impact of the
Placing and Open Offer, which raised #43.4 million for the
Group in April 2000. Interest payable and similar charges
were #0.3 million compared to #0.6 million in the comparable
period last year, reflecting the reduction in short-term
borrowing and conversions of Convertible Bonds to ordinary
shares, which occurred during the year.
The loss on ordinary activities after taxation for the year
was #3.4 million compared to #2.2 million in the year ended
30 September 1999. The diluted loss per ordinary share was
1.15 pence compared to 1.12 pence in the year ended 30
September 1999.
In line with stated strategy, the Directors are not
recommending the payment of a final dividend.
Net cash (cash less overdrafts for which a right of set off
exists) at 30 September 2000 was #38.9 million (1999: #1.8
million), again reflecting the receipt of proceeds from the
Placing and Open Offer. Of the cash on hand at 30 September
2000, approximately #2.7 million was in the Elan joint
venture. These funds are specifically set aside for the
development of the products and technologies contained in
the joint venture.
Variable rate convertible bonds due 2002 outstanding at 30
September 2000 were #2.6 million compared to #7.2 million in
1999. The reduction resulted from conversion of bonds into
ordinary shares.
Cash of approximately #5.3 million was received pursuant to
the exercise of warrants during the period.
OPERATIONAL REVIEW
Medical and Safety Products
Futura Medical Corporation ("Futura"), the Group's medical
safety product business, made good progress in the year.
Revenues from the existing business remained level with the
previous year. Margins and operating costs were also in
line with the previous year.
Development of the Futura 3ml safety syringe was completed
and following submission of 510(k) application to the FDA,
approval to market the product in the US was received in
July 2000. FDA approval represented a major milestone for
the Group and demonstrated its ability to acquire a partly
developed product, complete remaining development and obtain
FDA approval, all within a period of less than twelve
months.
Development of the 5ml and 10ml versions is continuing and
should be completed within the next few months. It is not
currently envisaged that these products will require
additional 510(k) filings as they are very similar in design
to the existing 3ml model. It is anticipated that the 1ml
syringe, which is also in development, will, most likely,
require a full 510(k) submission since its design will be
somewhat different from the current product.
The US regulatory environment continued to evolve with the
number of States adopting needlestick legislation growing to
16. Since the year-end, President Clinton has signed the
Needlestick Safety & Prevention Act into law, establishing a
nationwide federal mandate for the use of medical safety
products. The Directors believe that this latest
legislation will be a powerful driver of demand for safety
syringes in the US market.
During the second half a significant amount of work was done
to develop the roll out plan for the Futura safety syringe
including the development of a creative strategy and brand
positioning. The intention is to build upon the core
competencies of innovation and technology in a cost
effective product with the objective of claiming a
leadership position in medical safety products. As part of
this process, various focus group sessions were conducted to
provide an in-depth understanding of the critical marketing
drivers for the product. Participants in the focus groups
included medical professionals and key decision makers from
various segments of the healthcare industry. The process has
confirmed that for administrators and managers, the biggest
barrier to the widespread usage of safety syringes is cost.
Amongst clinicians, the greatest barrier is ease of use.
The Futura safety syringe scored highly on both of these
criteria.
A number of key appointments were made to the Futura sales
and marketing team during the year, including the
appointment of Joe Costa as Vice-President - Strategic
Operations. He was previously Director of Marketing with
responsibility for Becton Dickinson's safety syringes and
other sharps protection products.
Futura is pursuing a multi-level launch strategy for the
Futura safety syringe to ensure maximum market penetration
for the product. It will market safety syringes in the US,
directly to the alternate care sector. This sector includes
clinics, smaller doctors' offices, nursing homes etc. In
addition, the Group believes that the fastest, most
efficient and, ultimately, the most profitable route to the
larger hospital market is to partner with established
distributors, who have direct access to these end users.
The Board has now completed an evaluation of potential US
distribution partners and expects to announce a major
distribution alliance in the near future.
Discussions with potential large marketing partners in both
the US and certain other international markets are
continuing. The Board believes that agreements with such
partners will be complementary to the strategies outlined
above. The Group's objective is to negotiate agreements,
which fully recognise its position as both the developer and
high volume supplier of a full range of safety syringes
providing a cost effective solution to both the Federal and
State safety mandates.
Planning of the production scale-up of the Futura syringe,
to enable commercial production of the product by mid 2001,
is now at an advanced stage. High cavitation moulds and
final assembly equipment have been ordered and in due course
they will be installed at the manufacturing facilities of
the sub-contractors.
In addition, the Group is today announcing that it has
signed a contract manufacturing agreement with Nypro Inc., a
world leading injection moulding specialist, for high volume
manufacture of the Futura safety syringe. This production
capacity will supplement the capacity of the existing sub-
contract manufacturers in Asia. The agreement is the
Group's latest production contract for the Futura syringe
and is consistent with its strategy of using third party
manufacturers to ensure rapid production scale-up of the
product. Further details of the agreement are contained in
a separate Stock Exchange announcement.
In July 2000 Futura acquired the world-wide rights to a
needless IV access port. The Safety IV Port is a valve
which enables a syringe to be attached to an intra-venous
fluid line, for the purpose of introducing medication,
without the need for a needle. The acquisition was the
first step in the Group's stated policy of acquiring
additional medical safety products, which complement its
existing portfolio. Further new product opportunities are
currently being evaluated.
In September 2000, Futura acquired the business of Medical
Profiles Inc. ("MPI"), a Michigan based designer,
manufacturer and supplier of high precision plastic
components for use in medical devices. MPI has a strong
track record of successfully designing and developing new
plastic components to fulfil specific medical needs and the
Board believes that this capability will be invaluable as
the Group extends its portfolio of medical safety products.
Products, such as the Safety IV port, can be manufactured at
MPI in the early stages and subsequently transferred to the
Group's low-cost, high volume OEM manufacturers in the Far
East when the manufacturing processes have been optimised.
Diagnostics Division
As previously reported, the Supreme range of products is now
at the declining stage of the product life cycle. As a
result sales of Supreme strips and meters declined by
approximately #1.0 million year on year. The Board believes
that this decline will continue, though at a slower rate.
This decline was offset by a significant increase in
licensing revenues, which grew by #3.1 million compared to
the previous year. As a result, margins increased
significantly.
Much progress has been made in the process of bringing the
innovative Dart biosensor-based product closer to market.
Development of the Dart meter is substantially complete and
volume manufacturing capacity is being put in place using
high quality sub-contract manufacturers both in Europe and
in the Far East. Development of the associated bio-sensor
strip is also nearing completion with final optimisation of
the product specifications now taking place. It is
anticipated that the product will be ready for FDA filing
during the first half of 2001.
Hypoguard is working closely with a major global glucose
monitoring company with a view to entering into a marketing
partnership for its family of innovative bio-sensor based
systems including Dart and Flight. This potential partner
has expressed strong interest in the development work
completed by Hypoguard in this field.
The Board believes that there are significant private label
opportunities for Dart, both in the US and other
international markets. The initial launch will be in the US
where the focus of attention will be on the large retail
pharmacy chains. The Dart product will be complementary to
the existing product range within the acquired MEDgenesis
business.
David Conn was appointed President and CEO of Hypoguard in
June 2000. Prior to his appointment, Mr Conn spent five
years with LifeScan Inc, the world market leader in diabetes
monitoring which is owned by Johnson & Johnson.
In March 2000 Hypoguard entered into an agreement with Drew
Scientific PLC, under which Hypoguard provided a world-wide
exclusive license to certain technologies relating to an
Alzheimer's detection test in return for a license fee of
#1.3 million. Current work on this project is focussing on
classification of the specific antibodies to which the test
relates. A further programme of work has also been
established to study intact red blood cells to better
understand the cell surface antigens of these cells, another
important step in the characterisation and development of
the technology. Much of this work is being carried out in
collaboration with the University of Nijmegen in the
Netherlands.
In September 2000 Hypoguard granted an exclusive license to
Hyperlyser Limited, a wholly owned subsidiary of The Medical
House PLC, for the worldwide rights to a method of detecting
Helicobacter pylori. Hyperlyser paid a #1.4 million license
fee to Hypoguard for the rights. Work on the development of
prototype devices is underway at the University of the West
of England.
Both of these strategic alliances should ensure faster
completion of development work on these innovative
technologies enabling Medisys to benefit from progress while
allowing Hypoguard to remain focussed on its core diabetes
monitoring business.
On 4 December 2000, the Group announced that it had
conditionally agreed to acquire the diagnostics business of
MEDgenesis Inc. ("MEDgenesis"), a wholly owned subsidiary of
Chronimed Inc., for a total consideration of $39.975
million. MEDgenesis manufactures and distributes a range of
blood glucose monitoring products for diabetics, safety and
general purpose lancets and urine test strips. It is also
the US licensee for Hypoguard's Supreme technology. The
business has a nationwide sales infrastructure and a strong
market position in the US long term care sector. The Board
believes that the business will form the ideal platform for
the introduction of Hypoguard's exciting pipeline of next
generation blood glucose monitoring products into the all-
important US market.
The consideration payable by Medisys on closing will be
satisfied as to $30.475 million in cash and $9.5 million in
Medisys ordinary shares. The cash element will be funded by
a combination of bank debt and internal resources.
Board
Brian Timmons resigned as a non-executive director of the
Group in September 2000 to pursue other business interests.
The Board would like to thank Brian for his contribution to
the early development of Medisys and wish him well for the
future.
Current Trading and Prospects
The Board is enthusiastic about the growth prospects for
Medisys as products that are currently under development are
brought to market. 2001 will be a very important year for
the Group, seeing the market launch of the Futura safety
syringe and the first of our next generation diabetes
monitoring products. We expect both of these products to
have a significant impact on the Group's future performance.
Medisys remains committed to extracting the best
opportunities from existing products whilst seeking
marketing partnerships both for the Futura safety syringe
and its range of next generation diabetes monitoring
systems.
Although the current financial year is still at a very early
stage, trading is generally in line with expectations and
the Board remains optimistic about prospects for the year as
a whole.
Bill Bruce
CHAIRMAN 11 December 2000
Enquiries:
Medisys PLC 020 7663 5602
Michael Barry, Chief Financial Officer
Square Mile Communications 020 7601 1000
Kevin Smith/Becky Jewers
Medisys PLC
Consolidated profit & loss account
for the year ended 30 September 2000
2000 1999
#'000 #'000
Turnover
- continuing operations 8,950 8,782
- discontinued operations - 1,163
------- -------
8,950 9,945
Cost of sales (3,920) (4,025)
- continuing operations - (1,403)
- discontinued operations ------- -------
(3,920) (5,428)
------- -------
Gross Profit 5,030 4,517
------- -------
Research and development expenditure in (713) (203)
the year
Amortisation of acquired technologies (1,086) (271)
Amortisation of capitalised research and (252) (392)
development costs
Selling and distribution costs (1,620) (1,975)
Administration expenses (5,699) (2,820)
------- -------
Operating loss (4,340) (1,144)
------- -------
- continuing operations (4,340) (662)
- discontinued operations - (482)
------- -------
(4,340) (1,144)
Exceptional items
Gain on liquidation of associated
undertaking - 173
Loss on disposal of discontinued
operation (123) (673)
------- -------
Loss on ordinary activities before interest (4,463) (1,644)
Interest receivable 1,370 104
Interest payable and similar charges (294) (622)
------- -------
Loss on ordinary activities before taxation (3,387) (2,162)
Taxation on loss on ordinary activities - -
------- -------
(3,387) (2,162)
Loss on ordinary activities after
taxation for the year attributable
to shareholders (3,387) (2,162)
------- -------
Loss per ordinary share - basic and diluted (1.15)p (1.12)p
Consolidated statement of total recognised gains and losses
for the year ended 30 September 2000
2000 1999
#'000 #'000
Loss for the financial year (3,387) (2,162)
Unamortised issue costs on bonds converted
during the year (279) (442)
Loss of foreign currency translation (200) (87)
------- -------
Total recognised gains and losses for the
year (3,866) (2,691)
------- -------
Consolidated balance sheet
at 30 September 2000
2000 1999
#'000 #'000
Fixed assets
Intangible assets 17,400 11,478
Tangible assets 4,391 2,205
Financial assets 2,195 -
------- -------
23,986 13,683
------- -------
Current assets
Stocks 1,451 1,576
Debtors 5,140 3,573
Cash at bank and in hand 38,944 3,357
------- -------
45,535 8,506
Creditors: amounts falling due within one (3,471) (4,100)
year ------- -------
Net current assets 42,064 4,406
Total assets less current liabilities 66,050 18,089
Creditors: amounts falling due after more
than one year - (245)
Convertible bonds due 2002 (2,615) (7,201)
------- -------
Net assets 63,435 10,643
------- -------
Capital and reserves
Called up share capital 3,276 2,254
Share premium account 67,433 13,677
Capital redemption reserve fund 20 20
Other reserves 22,854 22,854
Profit and loss account (45,061) (42,150)
------- -------
Surplus/(deficit) on shareholders' funds -
equity 48,522 (3,345)
Minority interest 14,913 13,988
------- -------
63,435 10,643
------- -------
Consolidated cash flow statement
for the year ended 30 September 2000
2000 1999
#'000 #'000
Net cash outflow from operating activities (2,076) (8,004)
Returns on investments and servicing of
finance
Interest received 1,370 104
Interest paid (77) (231)
Net cash inflow/(outflow) from returns on 1,293 (127)
investments and servicing of finance
Corporation tax paid - -
Capital expenditure
Purchase of intangible fixed assets (3,377) (11,814)
Purchase of tangible fixed assets (2,727) (493)
Sale of tangible fixed assets 4 313
Investment in listed company (945) -
Investment in unlisted company (1,250) -
Net cash outflow for capital expenditure (8,295) (11,994)
Acquisitions and disposals
Acquisition of business undertaking (1,819) -
Acquisition of minority interest in (212) -
subsidiary undertaking
Disposal of business undertaking - 1,888
Net cash (outflow)/inflow from acquisitions (2,031) 1,888
and disposals
Net cash outflow before use of liquid (11,109) (18,237)
resources and financing
Financing
Issue of ordinary share capital including 50,780 4,092
premium
Expenses paid in connection with share
issue (2,292) -
Issue of preference shares in subsidiary - 13,988
Repayment of secured loans (297) (1,553)
Net cash inflow from financing 48,191 16,527
Increase/(decrease in cash) 37,082 (1,710)
Turnover and segment information
Geographically 2000 1999
#'000 #'000
Turnover
United Kingdom 3,748 787
Rest of Europe 1,561 2,475
USA 3,153 4,536
Other 488 2,147
------- -------
Loss on ordinary activities before taxation
Loss before common costs 8,950 9,945
------- -------
Common costs (1,898) (1,201)
Interest receivable 1,370 26
Interest payable (294) (174)
Other (2,565) (813)
------- -------
(3,387) (2,162)
------- -------
Net assets/(liabilities) by location of
undertaking
United Kingdom 53,726 6,545
USA 9,011 3,976
Other 698 122
------- -------
63,435 10,643
Geographical turnover is shown by location of customer.
Loss before taxation by geographical segment approximates to
the geographical split of turnover.
Turnover and segment information
(continued)
2000 1999
Class of business #'000 #'000
Turnover
Manufacture and sale of medical equipment
and supplies 5,141 8,046
Royalty income 660 671
Licensing fees 3,149 1,228
------- -------
Loss on ordinary activities before taxation 8,950 9,945
------- -------
Loss before common costs:
Pharmaceutical research (114) (234)
Manufacture and sale of medical equipment
and supplies (1,784) (967)
------- -------
(1,898) (1,201)
Common Costs
Interest receivable 1,370 26
Interest payable (294) (174)
Other (2,565) (813)
------- -------
(3,387) (2,162)
------- -------
Net assets/(liabilities)
Pharmaceutical research (1,448) (538)
Manufacture and sale of medical equipment
and supply 64,883 11,181
------- -------
63,435 10,643
------- -------
Loss per ordinary share
Basic and diluted 2000 1999
(3,387) (2,162)
Loss attributable to ordinary
shareholders (#'000) (3,387) (2,162)
------- -------
Weighted average number of ordinary shares
outstanding 293,424,462 192,820,839
------------ -----------
Basic loss per share (1.15)p (1.12)p
------- -------
Basic loss per share is calculated by dividing the weighted
average number of ordinary shares in issue into the loss after
taxation for the year attributable to ordinary shareholders.
There is no difference for 1999 and 2000 between the basic net
loss per share and the diluted net loss per share as ordinary
share equivalents from bonds, warrants and share options have
been excluded from the computation as their effects are anti-
dilutive.
MDY Healthcare (LSE:MDY)
Historical Stock Chart
Von Jun 2024 bis Jul 2024
MDY Healthcare (LSE:MDY)
Historical Stock Chart
Von Jul 2023 bis Jul 2024
