Interim Results for the Period Ending 30 June 2010
23 September 2010 - 8:01AM
UK Regulatory
TIDMRGT
FOR IMMEDIATE RELEASE
23 September 2010
REGEN THERAPEUTICS PLC
UNAUDITED INTERIM RESULTS FOR THE SIX MONTHS TO 30 JUNE 2010
ReGen Therapeutics Plc <AIM:RGT> ('ReGen' or the 'Company' or the 'Group') has
published its interim results for the six months to 30 June 2010
CHAIRMAN'S STATEMENT
FINANCIALS:
These are the best figures in terms of sales and Company performance that ReGen
has ever presented.
Sales increased to GBP134,000 compared to GBP9,000 for the first half of 2009. This
half year sales figure is greater than any full-year figure previously achieved.
Margins are lower than last year, but the previous figure included an extremely
high margin single order. For the first half of this year, sales were an
amalgam of revenues of varying profitability. The crucial point, however, is
that ReGen now has a number of customers and margins at 66% are high by the
standards of all but the most profitable pharmaceutical companies.
The Company continued to control costs very tightly. Administrative cash
expenditure was down GBP55,000, a fall of 18%, whilst development costs increased
by only GBP13,000 to GBP40,000. As we show later this does not mean that the
Company has abandoned developing for the future, but the Directors believe that
now is the time to exploit the research and development that had been undertaken
over the previous decade.
The impact of the rise in sales and tight control of expenditure was seen in a
substantial reduction in loss before tax down 29% to GBP242,000. The cash loss in
fact was GBP206,000. The Directors would comment that, even with the tighter
funding environment that has come since the credit crunch, the Company has
managed to fund the level of deficit as is indicated by our ability to raise
GBP601,000 from 1 January 2010 to 16 July 2010. This has enabled us to pay down
debt acquired during the more stringent environment of 2009 as well as providing
working capital.
The latest figures show that ReGen is getting nearer to profitability. We have
stated that we believe ReGen will obtain sustainable profitability in the 4th
Quarter of 2010. The Company has a number of initiatives in place, described in
this statement, to bring about this situation. It is too early to state yet
whether we will achieve our target but the Company continues to believe in the
initiatives it has under way.
TRADING:
There were two major developments in the first half of 2010 - Colostrinin(TM)
launches in Turkey and India
Turkey
Our Turkish licensee Eczacibasi Ilac Pazarlama A. S. ('Eczacibasi') based in
Levent-Istanbul, Turkey has now confirmed that it has launched ReGen's
nutritional supplement Colostrinin(TM) under the local trade name 'Dyna(TM)' in
the Republic of Turkey. Eczacibasi www.eczacibasi.com is a leading Turkish
industrials group with 40 companies, approximately 9,300 employees and revenues
of $3.2bn in 2007.
Since obtaining final product approval on 4 May 2010 and prior to formal launch
Eczacibasi have built a new marketing and sales team to launch the product and
have introduced the product to key opinion leaders in the market.
By way of reminder Eczacibasi are supplied with bulk blistered tablets for which
ReGen receive a fee for the active ingredient component. These are then
packaged locally. Revenues to ReGen from Eczacibasi pursuant to the minimum
annual purchase commitments in the distribution agreement are estimated to be
$52,000 in the first year and $104,000 in the second year.
India
On 27 April 2010 ReGen signed a supply agreement with an Indian Company
(revealed as USV Limited ('USV') on 7 July 2010) based in Mumbai, India. USV
www.usvindia.com is a 40-year-old leading healthcare company, which began as a
joint venture with USV & P Inc. USA, a subsidiary of Revlon. Its product
offering today includes Active Pharmaceutical Ingredients, Peptides,
Biosimilars, Injectables, Ophthalmics and Solid Orals.
The ReGen Board regards this as a crucial step for two reasons. Firstly, it
provides entry into the second most heavily populated market in the world and
one where self-medication is an integral part of healthcare. Secondly, India,
along with China, is one of the two major growth drivers of the world economy.
Thus, for these reasons a consumer launch in this market has significant
potential for ReGen's long-term profitability. USV is now launching
Colostrinin(TM) in India as Cognate(TM). USV's commitment to Colostrinin(TM) is
shown by the fact that is has developed and is manufacturing its own formulation
specifically tailored to the market in India.
Other markets
The US still remains our largest market. Following its takeover by Alticor we
understand that our licensee Metagenics is now working to further enhance the
profile of CogniSure(TM) with a view to re-invigorating the marketing of the
product.
Australia, Poland, Cyprus and the UK are continuing to market Colostrinin(TM).
NEW MARKETS:
China
China, with India, is a major potential market for ReGen because of its size and
tradition of self-medication. It should be noted that the rapid economic growth
in China is bringing more and more people into the consumer market. We have
engaged ICUK (a UK based British and Chinese Government Consultancy) to
introduce us to key players in the Chinese market. They have already introduced
us to a major Chinese Company, which is currently carrying out market research
to evaluate the commercial potential of Colostrinin(TM) in China. If this
research proves positive we would expect to negotiate and sign an agreement with
the major Chinese Company.
Other markets
We continue to talk to interested players throughout the world, but would point
out that sometimes it can take significant time from initial contact to the
launch of a product. Even in the case of Metagenics it took 15 months from the
signing of our agreement to launch and we had been talking to them for some
years before. Simply because we do not mention a market it does not mean that
everything is dead in that market, but that we have nothing factual to report.
SCIENCE:
Zolpidem
South African SPECT Scanning Study - Full Publication
The full paper reporting the results of the SPECT scanning study in South Africa
(first announced in a ReGen press release of 9 November 2009) was published in
the journal Arzneimittel Forschung/ Drug Research. An abstract is available
athttp://www.ncbi.nlm.nih.gov/sites/pubmed by searching under the authors names:
Nyakale NE, Clauss RP, Nel HW, Sathekge MM.
Zolpidem Website
A website drawing together all of the currently available scientific information
on the use of zolpidem in brain trauma has been put together and will be
maintained by Dr Ralf Clauss (http://sites.google.com/site/zolpidemtherapy/).
There is now a link to this from the ReGen website.
Mode of Action Hypothesis Paper
A paper proposing how zolpidem works to overcome the natural brain response to
trauma has been published by Dr Clauss.
http://www.ncbi.nim.nih.gov/pubmed/20347531
Colostrinin(TM)
Austen/Stewart publications - J Nutr and Aging
A publication, by Prof Brian Austen (a former scientific collaborator of ReGen)
and a subsequent letter from Dr Michael Stewart (a former collaborator and
consultant to ReGen) further elaborate on the mechanism of how Colostrinin(TM)
can protect human neurones in-vitro from cell death (apoptosis) induced by
aggregated beta amyloid and suggest that this mechanism might be the basis of
Colostrinin's(TM) protective effect in Alzheimer's disease.
Abstracts of both articles are available at:
http://www.ncbi.nlm.nih.gov/sites/pubmed by searching under the authors names.
Douraghi-Zadeh D, Matharu B, Razvi A, Austen B. and Stewart M.G respectively.
Percy Lomax
Executive Chairman
Copies of this interim statement are available from the Company's offices at
73, Watling Street, London EC4M 9BJ, or by visiting our website
atwww.regentherapeutics.com
For further information contact:
Percy Lomax
ReGen Therapeutics Plc
Tel: 020 7153 4920
Roland Cornish/Felicity Geidt
Beaumont Cornish Limited
Tel: 020 7628 3396
David Scott/Nick Bealer
Alexander David Securities Limited
Tel: 020 7448 9820
ReGen Therapeutics Plc
Interim Results for the Six Months to 30
June 2010
Consolidated income statement
For the six months ended 30 June 2010
Unaudited Unaudited Audited
6 months to 6 months to Year to
30-Jun-10 30-Jun-09 31-Dec-09
( GBP000) ( GBP000) ( GBP000)
Continuing operations
Revenue 134 9 56
Cost of sales (45) (1) (11)
-----------------------------------
Gross profit 89 8 45
+------------------------------------------------------------------------------+
|Research and development costs 40 27 80|
| |
| |
| |
|Other administrative costs 288 322 719|
+------------------------------------------------------------------------------+
Administrative costs 328 349 799
Operating loss ` (239) (341) (754)
Finance income - - -
Finance costs (3) 1 (4)
-----------------------------------
Loss before taxation (242) (342) (758)
Taxation Note 2 8 - 28
-----------------------------------
Loss after taxation for continuing
activities (234) (342) (730)
-----------------------------------
Attributable to:
Equity holders of the parent (234) (342) (730)
-----------------------------------
Basic and diluted loss per share Note 3 (0.46p) (1.69p) (2.67p)
ReGen Therapeutics Plc
Consolidated statement of comprehensive
income
For the six months ended 30 June 2010
Unaudited Unaudited Audited
6 months to 6 months to Year to
30-Jun-10 30-Jun-09 31-Dec-09
( GBP000) ( GBP000) ( GBP000)
Loss (234) (342) (730)
Other comprehensive income - - -
----------------------------------
Total comprehensive income (234) (342) (730)
----------------------------------
Attributable to
Equity holders of the parent (234) (342) (730)
----------------------------------
ReGen Therapeutics Plc
Consolidated statement of financial
position
Unaudited Unaudited Audited
As at As at As at
30-Jun-10 30-Jun-09 31-Dec-09
( GBP000) ( GBP000) ( GBP000)
Assets
Non current assets
Goodwill 965 965 965
Other intangible assets 572 797 599
Property, plant and equipment - 1 -
------------------------------
Total non current assets 1,537 1,763 1,564
------------------------------
Current assets
Inventories 32 40 38
Trade and other receivables 129 65 81
Tax receivable 24 81 16
Cash and cash equivalents 124 41 31
------------------------------
Total current assets 309 227 166
Total assets 1,846 1,990 1,730
------------------------------
Liabilities
Current liabilities
Trade and other payables 313 476 368
Loans and borrowings 44 53 49
------------------------------
Total current liabilities 357 529 417
Non current liabilities
Provisions 100 100 100
------------------------------
Total liabilities 457 629 517
------------------------------
Total net assets 1,389 1,361 1,213
Equity
Capital and reserves
Share capital - Issued and fully paid Note 4 7 3 4
- Deferred B shares 1,305 1,305 1,305
- Deferred A shares 5,298 5,298 5,298
Share premium 15,155 14,509 14,748
Other reserves 266 266 266
Retained earnings (20,642) (20,020) (20,408)
------------------------------
Total equity 1,389 1,361 1,213
ReGen Therapeutics Plc
Consolidated statement of cash flows
Unaudited Unaudited Audited
6 months to 6 months to Year to
30-Jun-10 30-Jun-09 31-Dec-09
( GBP000) ( GBP000) ( GBP000)
----------------------------------
Loss after tax for the period (234) (342) (730)
Amortisation of intangible assets 39 17 238
Depreciation of property, plant and
equipment - 1 1
Interest charged 3 1 4
Interest credited - - -
Taxation credit (8) - (28)
Taxation received - - 93
----------------------------------
Operating cash flows before movements
in working capital and provisions (200) (323) (422)
Decrease/(Increase) in inventories 6 (12) (10)
(Increase)/decrease in receivables (49) 22 7
(Decrease)/increase in payables (55) (14) (122)
----------------------------------
Net cash outflow from operating
activities (298) (327) (547)
----------------------------------
Cash flows from investing activities
Interest received - - -
Purchase of intangible assets (11) (20) (43)
----------------------------------
Net cash used in investing activities (11) (20) (43)
----------------------------------
Cash flows from financing activities
Net proceeds from issue of share
capital 410 363 603
Interest paid (3) (1) (4)
----------------------------------
Net cash from financing activities 407 362 599
----------------------------------
Net increase/(decrease) in cash and
cash equivalents 98 15 9
Opening cash and cash equivalents (18) (27) (27)
----------------------------------
Closing cash and cash equivalents Note 5 80 (12) (18)
----------------------------------
ReGen Therapeutics Plc
Consolidated statement of changes In equity
Share Share Other Retained
Capital Premium Reserves Earnings Total
( GBP000) ( GBP000) ( GBP000) ( GBP000) ( GBP000)
At 1 January 2009 6,605 14,147 266 (19,678) 1,340
Loss for the period - - - (342) (342)
-----------------------------------------
Total comprehensive income and expense
for the period - - - (342) (342)
Net issue of share capital 1 362 - - 363
-----------------------------------------
Balance at 30 June 2009 6,606 14,509 266 (20,020) 1,361
Loss for the period - - - (388) (388)
-----------------------------------------
Total comprehensive income and expense
for the period - - - (388) (388)
Net issue of share capital 1 239 - - 240
-----------------------------------------
Balance at 31 December 2009 6,607 14,748 266 (20,408) 1,213
Loss for the period - - - (234) (234)
-----------------------------------------
Total comprehensive income and expense
for the period - - - (234) (234)
Net issue of share capital 3 407 - - 410
-----------------------------------------
Balance at 30 June 2010 6,610 15,155 266 (20,642) 1,389
-----------------------------------------
Notes to the Interim Results
Six Months Ended 30 June 2010
1. Basis of preparation
This financial information has been prepared using the recognition and
measurement principles of International Accounting Standards, International
Financial Reporting Standards and Interpretations adopted for use in the
European Union (collectively Adopted IFRSs). The principal accounting policies
used in preparing the interim results are those the group expects to apply in
its financial statements for the year ending 31 December 2010 and are unchanged
from those disclosed in the group's Report and Financial Statements for the year
ended 31 December 2009, except that the following standards and amendments have
now become effective - IAS 7 (revised 2009), IAS 27 (arising from the amendments
to IFRS 3) and IAS 36, none of which has had a material impact on the financial
information of the Group.
The Interim Statement has not been audited nor reviewed by the Company's
auditors. The comparatives for the full year ended 31 December 2009 are not the
Company's full statutory accounts for that year. A copy of the statutory
accounts for that year, which were prepared under IFRS, have been delivered to
the Registrar of Companies. The auditors' report on those accounts was
unqualified and included references to going concern which the auditors drew
attention to by way of emphasis without qualifying their report and did not
contain a statement under Section 498(2)-(3) of the Companies Act 2006.
2. Taxation
The interim tax credit reflects an estimate of the likely effective tax rate for
the period.
3. Loss per share
6 months to 6 months to Year to
30-Jun-10 30-Jun-09 31-Dec-09
Numerator
Loss for the period ( GBP) 234,000 342,000 730,000
Denominator
Weighted average number of shares of 0.01p 50,379,605 20,186,360 27,331,695
The Company has instruments that could potentially dilute basic earnings per
share in
the future, but that have not been included in the calculation of diluted
earnings per share because they are antidilutive for the presented.
There are 20,463 share options in issue that are currently anti-dilutive.
4. Share Capital
On 14 January 2010, the Company issued 8,333,333 ordinary shares of 0.01p each
at a premium of 1.49p per share for a consideration of GBP125,000.
On 30 March 2010, the Company issued 5,000,000 ordinary shares of 0.01p each at
a premium of 1.49p per share for a consideration of GBP75,000.
On 10 May 2010, the Company issued 11,550,000 ordinary shares of 0.01p each at a
premium of 1.99p per share for a consideration of GBP231,000.
On 30 June 2010, the Company issued 5,000,000 ordinary shares of 0.01p each at a
premium of 1.99p per share for a consideration of GBP100,000.
5. Note supporting cash flow statement
Cash and cash equivalents comprises:
Unaudited Unaudited Audited
As at As at As at
30-Jun-10 30-Jun-09 31-Dec-09
( GBP000) ( GBP000) ( GBP000)
Cash available on demand 123 40 30
Short-term deposits 1 1 1
------------------------------------
Cash and cash equivalents 124 41 31
Overdraft (44) (53) (49)
------------------------------------
80 (12) (18)
------------------------------------
[HUG#1446023]
This announcement is distributed by Thomson Reuters on behalf of
Thomson Reuters clients. The owner of this announcement warrants that:
(i) the releases contained herein are protected by copyright and
other applicable laws; and
(ii) they are solely responsible for the content, accuracy and
originality of the information contained therein.
Source: ReGen Therapeutics Plc via Thomson Reuters ONE
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