TIDMDNL
RNS Number : 3705N
Diurnal Group PLC
24 September 2019
24 September 2019
Diurnal Group plc
("Diurnal" or the "Company")
Results for the year ended 30 June 2019
Building on the successful launch of Alkindi(R)
Further key clinical and regulatory milestones expected in the
next 12 months
Diurnal Group plc (AIM: DNL), the specialty pharmaceutical
company targeting patient needs in chronic endocrine (hormonal)
diseases, announces its audited results for the year ended 30 June
2019.
Operational highlights
Alkindi(R)
-- Successful launch of Alkindi(R) in the UK as the first
specifically developed and licensed replacement therapy for
paediatric adrenal insufficiency
-- Alkindi(R) pricing agreed in Germany, Italy, Austria, Sweden, Norway, Denmark and Iceland
-- Confirmation of the current clinical and regulatory path for
Alkindi(R) in the US with the US Food and Drug Administration,
facilitating a New Drug Application (NDA) submission in Q4 2019
-- Progress in the rest of world with Alkindi(R) Marketing
Authorisation Application (MAA) submission in Israel and grant of
Orphan Drug Designation in Australia
Chronocort(R)
-- MAA submission is on track for Q4 2019: confirmation of the
current clinical and regulatory path for Chronocort(R) by the
European Medicines Agency (EMA) following completion of European
Phase 3 study
o Pivotal study in congenital adrenal hyperplasia, the largest
ever interventional study in this disease completed
-- Study missed primary endpoint of superiority of Chronocort(R)
to conventional therapy in control of androgens (17-OHP) over the
24-hour period
-- Chronocort achieved significantly better control of androgens
(17-OHP) in the period 07:00-15:00
-- Chronocort(R) achieved 24-hour control on the same or lower
overall dose of glucocorticoid with fewer patients requiring rescue
therapy (sick day rules)
o Scientific Advice from the EMA confirmed no additional
clinical studies required
Financial overview
-- Alkindi(R) revenues reached over GBP1 million during the financial year
-- Successful completion of a GBP5.9 million Placing and Open
Offer with institutional and private investors to fund further
development of Diurnal's late-stage pipeline and commercial
roll-out
-- Reduced operating loss of GBP14.5m (2018: GBP16.8m),
reflecting completion of the Chronocort European Phase 3 study,
implementation of cost-saving measures and increase in revenues
-- Cash and cash equivalents at 30 June 2019 of GBP9.1m (30 June 2018: GBP17.3m)
-- Net cash used in operating activities was GBP13.7m (2018:
GBP12.8m), in line with the Board's expectations
Post-period highlights
-- Successful launch of Alkindi(R) in Sweden and Denmark
-- Submission of MAA for Alkindi(R) in Australia following the
grant of Orphan Drug Designation
-- Investment in enhanced capsuling capability for Alkindi(R)
and Chronocort(R) agreed with manufacturing partner, Glatt
Pharmaceutical Services
Martin Whitaker, CEO of Diurnal, commented:
"Diurnal continues to execute on delivering its vision of
becoming a world leading endocrinology specialty pharma company.
During the year, we made substantial operational and commercial
progress, overcoming significant challenges, and remain in a strong
position.
"Alkindi(R) , our first commercialised product, demonstrated
strong market uptake, which we believe validates our strategy of
focusing on the treatment of underserved chronic endocrine
diseases, as well as our expertise in developing, registering and
commercialising high-quality products. Importantly, we have also
built a valuable sales infrastructure in Europe for Alkindi(R) ,
which we can use to commercialise future products including
Chronocort(R) . As further testament to the expert team at Diurnal,
we are pleased that following our detailed analysis of data from
our Phase 3 clinical programme of Chronocort(R) in Europe and our
discussion with the EMA, the product remains on track for
submission of an MAA in Q4 2019.
"Additionally, as we look ahead, we expect further country
launches in Europe for Alkindi(R) during H2 2019, along with a
planned NDA submission of the product in the US during Q4 2019.
Diurnal has received strong interest in Alkindi(R) and
Chronocort(R) for the US and we are progressing with licensing
discussions."
This announcement contains insider information for the purposes
of Article 7 of Regulatory (EU) No596/2014.
For further information, please visit www.diurnal.co.uk or contact:
+44 (0)20 3727
Diurnal Group plc 1000
Martin Whitaker, Chief Executive Officer
Richard Bungay, Chief Financial Officer
Panmure Gordon (UK) Limited (Nominated Adviser +44 (0) 20 7886
and Joint Broker) 2500
Corporate Finance: Freddy Crossley, Emma Earl
Corporate Broking: James Stearns
+44 (0)20 7894
Cantor Fitzgerald Europe (Joint Broker) 7000
Corporate Finance: Phil Davies, Will Goode,
Michael Boot
Healthcare Equity Sales: Andrew Keith
+44 (0)20 3727
FTI Consulting (Media and Investor Relations) 1000
Simon Conway
Victoria Foster Mitchell
Notes to Editors
About Diurnal Group plc
Founded in 2004, Diurnal is a UK-based specialty pharma company
developing high quality products for the global market for the
life-long treatment of chronic endocrine conditions, including
Congenital Adrenal Hyperplasia and Adrenal Insufficiency. Its
expertise and innovative research activities focus on
circadian-based endocrinology to yield novel product candidates in
the rare and chronic endocrine disease arena.
For further information about Diurnal, please visit
www.diurnal.co.uk
Forward looking statements
Certain information contained in this announcement, including
any information as to the Group's strategy, plans or future
financial or operating performance, constitutes "forward-looking
statements". These forward-looking statements may be identified by
the use of forward-looking terminology, including the terms
"believes", "estimates", "anticipates", "projects", "expects",
"intends", "aims", "plans", "predicts", "may", "will", "seeks"
"could" "targets" "assumes" "positioned" or "should" or, in each
case, their negative or other variations or comparable terminology,
or by discussions of strategy, plans, objectives, goals, future
events or intentions. These forward-looking statements include all
matters that are not historical facts. They appear in a number of
places throughout this announcement and include statements
regarding the intentions, beliefs or current expectations of the
Directors concerning, among other things, the Group's results of
operations, financial condition, prospects, growth, strategies and
the industries in which the Group operates. The directors of the
Company believe that the expectations reflected in these statements
are reasonable, but may be affected by a number of variables which
could cause actual results or trends to differ materially. Each
forward-looking statement speaks only as of the date of the
particular statement.
By their nature, forward-looking statements involve risks and
uncertainties because they relate to events and depend on
circumstances that may or may not occur in the future or are beyond
the Group's control. Forward-looking statements are not guarantees
of future performance. Even if the Group's actual results of
operations, financial condition and the development of the
industries in which the Group operates are consistent with the
forward-looking statements contained in this document, those
results or developments may not be indicative of results or
developments in subsequent periods.
Chairman's Statement
Diurnal has ended a challenging year in a strong position as the
Group continues to move towards its vision of becoming a
world-leading endocrinology specialty pharma company. The strong
market uptake of Alkindi(R) is a validation of both the Group's
strategy of focusing on the treatment of chronic endocrine diseases
and of its expertise in developing, registering and commercialising
high-quality products. Similarly, following the surprising initial
headline data from the Phase 3 trial, the progress made towards
ensuring the Chronocort(R) European commercial launch remains on
track is testament to the resilience and resourcefulness of our
staff and we look forward to the Marketing Authorisation
Application (MAA) submission which remains on track for Q4 2019. I
am particularly encouraged by the strong support we continue to
receive from physicians and patient groups who provide valuable
input into the development of our products, and from our investors
who have continued to support the Group during this critical period
in its development.
A focused strategy
Diurnal is focused on the in-house commercialisation of
Alkindi(R) and Chronocort(R) in key European territories where it
is able to optimise market access in a cost-effective manner. For
markets outside of these core territories, Diurnal's strategy is to
engage with partners who have extensive local knowledge, a strong
commitment to our products, and who are able to rapidly gain market
access to help patients.
The launch of Alkindi(R) has provided Diurnal the opportunity to
become a fully-integrated organisation with the capabilities to
successfully design, develop and commercialise innovative products
that address key unmet patient needs in chronic endocrine diseases.
The Group will realise significant synergies through the use of the
same commercial infrastructure and supply chain for Chronocort(R)
in Europe, following the anticipated marketing authorisation
submission in late 2019 and subsequent regulatory approval.
Chronocort(R) will also benefit significantly from the Group's
experience in obtaining regulatory and pricing approval for
Alkindi(R) .
Chronocort(R) presents the opportunity of a 'platform product',
with potential to expand beyond the treatment of congenital adrenal
hyperplasia (CAH) into adrenal insufficiency (AI), which is
approximately five times the size of the CAH market, as well as
other potential indications in inflammatory diseases. By leveraging
its late-stage portfolio in this way, Diurnal believes it can build
a highly cash-generative business, providing the capability to
invest both in its own innovative product portfolio, as well as
seeking new opportunities from external sources, to drive long-term
growth for shareholders.
Diurnal continues to believe its focus on rare and orphan
diseases in the endocrine space provides the opportunity to develop
high-quality, differentiated products that address the burden of
living with these diseases and demonstrate clear clinical benefits,
both to physicians and payers, as shown by the success of
Alkindi(R) following its launch in May 2018.
Delivering our late-stage pipeline
Diurnal has continued to make significant progress with its
innovative products for the treatment of cortisol deficiency,
Alkindi(R) for paediatric patients and Chronocort(R) .
Diurnal's belief in the clinical benefits for Alkindi(R) has
been borne out in the market, with pricing now agreed in a number
of European territories in line with the Group's aspirations. The
Group achieved revenues in excess of GBP1 million during the year,
reflecting a highly successful launch of Alkindi(R) .
An important event during the year was the completion of the
Chronocort(R) European Phase 3 study in October 2018. Despite
Chronocort(R) controlling patients' condition more effectively than
in its successful Phase 2 trial, it failed to meet the complex
primary efficacy endpoint. Nevertheless, it is clear to Diurnal
that Chronocort(R) is a safe and effective treatment that is able
to deliver real benefits to patients; this was corroborated in a
successful meeting with the European Medicines Agency (EMA), which
confirmed the current regulatory path. As a consequence, a European
MAA will be submitted in Q4 2019 without the need for additional
clinical trials.
Following the unexpected headline result from the Chronocort(R)
European Phase 3 programme, the Group deemed it prudent to pause
the Chronocort(R) US development programme, in order to incorporate
key learnings from the European study. The US protocol has now been
redesigned and is ready for recommencement of development, which is
likely to be in conjunction with a partner.
Outside of these territories, Diurnal's partners in Israel and
Australia have continued to make excellent progress. The Group will
continue to seek opportunities to maximise the value of Alkindi(R)
by seeking partners in other territories, particularly those which
can accept the European regulatory dossier and which will support
pricing in line with the clinical benefits offered by the
product.
Financial stability
Diurnal successfully completed a GBP5.9 million placing and open
offer in June 2019, which will facilitate the submission of
marketing authorisation applications for Chronocort(R) in Europe
and Alkindi(R) in the US, as well as the continued build-out of the
commercial infrastructure to support the expected growth in
Alkindi(R) revenues over the coming years. Diurnal has managed
costs carefully during the year and believes that it is well placed
to raise the further funds required to reach sustainable
profitability. I would like to thank our existing and new
shareholders for their support as Diurnal aims to provide
much-needed, high-quality treatment options to patients with
chronic endocrine diseases.
Strong governance and risk management
The Group has continued to operate a strong system of internal
controls and appropriate risk management systems throughout the
year. The identification and management of risks is embedded in the
senior management team and is overseen by the Board, which enables
the Group to pre-empt and effectively manage issues across the
business.
A key focus during the year has been Diurnal's preparations for
the UK's planned departure from the European Union. Diurnal's
commercial supply chain is located entirely within the EU in order
to minimise any cross-border trading impacts on the
commercialisation of Alkindi(R) across Europe. The Group's wholly
owned subsidiary in the Netherlands is now fully equipped to
commercialise products within the EU on an ongoing basis. It is a
testament to Diurnal's quality approach and systems that it was
able to obtain the necessary licences and approvals on a timely
basis, to avoid disruption of the business.
People and culture
I would like to thank our employees for their continued support
and hard work in driving the Group's progress towards
commercialising its first products, in particular given the
challenges in the current year and the complexities of
transitioning from a development organisation to a fully-integrated
company. Few UK companies have successfully taken their own product
from concept to commercialisation and the fact our key milestones
have been met during a period of intense activity and change
demonstrates the strength of the Diurnal team. I am pleased that,
throughout this period of rapid growth and development, Diurnal has
managed to retain an entrepreneurial culture, both in its direct
employees and also in the highly skilled contractors and
consultants who support the business.
I would also like to thank my fellow Board members for the
progress made this year in overseeing a strategy that will ensure
continued and sustainable growth from our pipeline.
Key milestones expected next year
The next 12 months are expected to see further significant
progress in Diurnal, with two major regulatory filings anticipated
within the first half of our next financial year and continued
launches of Alkindi(R) in key European markets. The Group also
expects to report progress in finding a partner for its late-stage
products in the US and other markets globally. The Group remains
mindful of external growth opportunities and continues to assess
endocrinology assets that fit within its disease focus.
Looking forward, I am optimistic that the Group's novel
late-stage pipeline products are well positioned to deliver
Diurnal's ambition of becoming a world-leading,
endocrinology-focused specialty pharma company, delivering
significant value for our shareholders.
Peter Allen
Chairman
23 September 2019
Operational Review
The Group's primary focus remains on progressing Chronocort(R)
and Alkindi(R) , our two lead products, which are potentially
valuable treatment options with a combined opportunity in the US
and Europe of over $400 million for congenital adrenal hyperplasia
(CAH) and paediatric adrenal insufficiency (AI), underserved orphan
diseases resulting from cortisol deficiency. During the year,
Alkindi(R) has made significant commercial progress following first
country launches in the UK and Germany.
Despite the initially disappointing top-line analysis of data
from the Chronocort(R) European Phase 3 clinical trial during Q3
2018, Diurnal believes the overall data package is compelling with
respect to the drug as a potential treatment for CAH. Following a
positive Scientific Advice meeting with the European Medicines
Agency (EMA) in Q2 2019, the Group expects to file a marketing
authorisation application (MAA) for Chronocort(R) , using the
existing clinical data, in Q4 2019. With the operational progress
made over the past year, Diurnal believes it can become one of the
few UK biotechnology companies to successfully take multiple
products from concept to commercialisation.
Late-stage pipeline: targeting patient needs in diseases of
cortisol deficiency
Diurnal's late stage development pipeline is targeting disorders
of the adrenal axis with two novel formulations of
hydrocortisone.
CAH is an orphan condition caused by the deficiency of adrenal
enzymes, most commonly 21-hydroxylase, which is required to produce
cortisol, an essential hormone in regulating metabolism and the
response to stress. The block in the cortisol production pathway
causes the over-production of male steroid hormones (androgens),
which are precursors to cortisol. The condition presents at birth
and affects both sexes. The cortisol deficiency and over-production
of male sex hormones can lead to increased mortality, infertility
and severe development defects, including ambiguous genitalia,
premature sexual development and short stature. Sufferers, even if
treated, remain at risk of death through an adrenal crisis. The
condition is estimated to affect approximately 41,000 patients in
Europe and 16,000 patients in the US, with approximately 405,000
patients in the rest of the world.
AI is a condition characterised by deficiency in cortisol often
acquired during a persons' lifetime. The primary symptom of AI is
chronic fatigue and patients are at risk of adrenal crisis and
death if they do not have adequate cortisol replacement. AI is
either primary or secondary, with primary AI resulting from
diseases intrinsic to the adrenal gland and secondary AI resulting
from pituitary diseases where there is a failure of the pituitary
gland to stimulate the adrenal gland. The condition is estimated to
affect approximately 297,000 patients in Europe and 154,000
patients in the US, with approximately three million patients in
the rest of the world.
Paediatric AI (including CAH) has been identified as an orphan
disease in the US, where there are estimated to be approximately
4,100 sufferers under the age of 17, and in Europe, where there are
estimated to be around 10,000 suffers under the age 18. Untreated,
the disease is associated with significant morbidity and increased
mortality.
Alkindi(R) Europe: strong market uptake driving revenue
growth
Alkindi(R) is the first product specifically designed for young
children suffering from paediatric AI, and the related condition
CAH. Alkindi(R) is licensed in Europe and has been proven to be
effective, safe and easy to administer. Given the specialist
prescribing base, and to retain the maximum commercial value of the
product, Diurnal is commercialising Alkindi(R) itself in larger
European markets, focusing its marketing efforts initially on
patients aged 0-6 years where the unmet need is highest. Diurnal
will assess the most effective means of accessing smaller markets
for Alkindi(R) , either through the use of in-house resources or
distribution partners.
Diurnal launched Alkindi(R) in the UK in September 2018, its
second launch following introduction in Germany in May 2018. During
the year, Diurnal has continued to make good progress in both
territories, including pricing discussions, notably with a positive
Scottish Medicines Consortium pricing and reimbursement decision in
October 2018 and agreement of the price in Germany. Alkindi(R)
achieved revenues of over GBP1 million during the financial year, a
key milestone for the Group, and has continued to make strong
progress, with continued revenue growth to date in H2 2019.
The roll-out of Alkindi(R) beyond Germany and the UK has
continued during the year, with pricing agreed in Italy, Sweden,
Denmark, Austria, Norway and Iceland. Diurnal believes that the
health economic arguments supporting Alkindi(R) are robust and
support pricing submissions in the remaining key European markets.
The Group expects a series of country launches during the remainder
of 2019 that will continue to provide strong revenue growth for
Alkindi(R) , including the launch in the Nordic region shortly
after the end of the financial year by its distribution partner
Frost Pharma (formerly Anthrop Pharma).
Diurnal has continued to develop a robust product supply chain
during the year; in particular to minimise disruption to the
Group's operations should the UK depart from the EU without a
transitional arrangement. The Group's supply chain remains located
entirely within the EU, with primary manufacturing of Alkindi(R)
capsules in Germany, packaging in France, and distribution in the
Netherlands. Diurnal's wholly-owned subsidiary, Diurnal Europe
B.V., holds the Alkindi(R) EU marketing authorisation and
Wholesaler Dealer Licence required to market Alkindi(R) in the EU
should the UK depart from the EU.
The Group believes that its European commercial infrastructure
is a valuable asset that can ensure it not only retains the maximum
commercial value of its in-house products in major European
territories, but also makes Diurnal an attractive partner for
companies seeking to commercialise endocrinology focused products
in Europe. As a result, Diurnal continues to assess such business
development opportunities where they are additive to its business
model.
Alkindi(R) US: regulatory submission planned for 2019
During the year, Diurnal successfully completed the Alkindi(R)
US reference drug bioequivalence study to support its planned New
Drug Application (NDA) submission in the US. In addition, the Group
completed the Alkindi(R) safety evaluation and tolerability
extension study in Europe, which will provide valuable long-term
exposure data in support of market access in the US.
Following the successful completion of these studies, Diurnal
discussed the proposed NDA package with the US Food and Drug
Administration (FDA), who confirmed Diurnal's planned regulatory
path for Alkindi(R) in the US. Reflecting this, Diurnal plans to
submit an NDA for Alkindi(R) during Q4 2019, with potential for
approval in late 2020. In parallel with the NDA submission, Diurnal
will apply for Orphan Drug Status for Alkindi(R) in paediatric AI,
which requires Diurnal to demonstrate significant clinical benefit
for Alkindi(R) compared to existing therapies. Diurnal intends to
seek a licensing partner for its late-stage products in the US and,
following the positive FDA feedback, has now initiated partnering
discussions for Alkindi(R) .
Chronocort(R) : clear regulatory path in Europe and US
Diurnal's second product candidate, Chronocort(R) , provides a
drug release profile that the Group believes better mimics the
body's natural cortisol circadian rhythm, which current therapies
are unable to replicate, and is designed to improve disease
treatment for adults with CAH, as measured by androgen (male sex
hormone) control.
During the year, the Group completed its European pivotal Phase
3 clinical trial of Chronocort(R) for the treatment of CAH in
adults, with a total of 122 patients enrolled across 11 clinical
sites, the largest interventional study conducted to date in this
patient population. Patients completing treatment in this study had
the option to enrol into a long-term safety extension study,
assessing the impact of treatment with Chronocort(R) over an
extended period, regardless of whether the patients were initially
treated with Chronocort(R) or standard-of-care. A significant
proportion of patients eligible to enter the follow-on study did
so, and patient retention rate in this study has been high to
date.
In October 2018, Diurnal announced that, whilst Chronocort(R)
had been able to demonstrate 24-hour control of androgens in the
Phase 3 trial, it did not meet the primary endpoint of superior
control throughout the 24 hour period compared to conventional
glucocorticoid therapy. Subsequently, Diurnal performed a detailed
analysis of the study data, identifying important differences
between Chronocort(R) and the control arm of the trial based upon a
number of clinical parameters. Diurnal also analysed interim data
from the ongoing safety extension study; notably, a number of
patients on the safety extension trial have been treated for at
least 30 months and show sustained benefit from extended
Chronocort(R) treatment, consistent with feedback from the study
investigators in this open-label trial. Based on these findings,
Diurnal held a Scientific Advice meeting with the EMA in Q2 2019,
which confirmed the existing clinical and regulatory path for
Chronocort(R) Diurnal, therefore, expects to file an MAA for
Chronocort(R) in Q4 2019. As part of the MAA submission, Diurnal
intends to file for the use of Chronocort(R) for adolescent CAH
patients, providing the potential for seamless life-long treatment,
with patients commencing treatment with Alkindi(R) and
transitioning to Chronocort(R) . In parallel with the MAA
submission, Diurnal will apply for Orphan Drug Status for
Chronocort(R) in CAH, which requires Diurnal to demonstrate
significant clinical benefit for Chronocort(R) compared to existing
therapies. Diurnal has also undertaken the necessary arrangements
with the UK's Medicines and Healthcare products Regulatory Agency
(MHRA) for a potential separate UK regulatory submission, should
the UK depart from the EU without a transitional arrangement.
Assuming the EMA approves Chronocort(R) for the treatment of
CAH, Diurnal subsequently intends to submit a line extension in
Europe for the treatment of AI, a much larger market opportunity,
using existing clinical data, once the current Orphan Drug
Designation for the product Plenadren(R) in the treatment of AI has
expired.
The Group intends to use its commercial organisation and supply
chain developed for Alkindi(R) for the planned future launch of
Chronocort(R) in Europe. In addition, the pricing work undertaken
for Alkindi(R) has provided insights into the cortisol deficiency
market that will be extremely valuable when developing health
economic arguments for Chronocort(R) .
Following discussions with the FDA during 2018, Diurnal designed
a Phase 3 registration package for Chronocort(R) in the US, which
would recruit up to 150 patients with CAH randomised to either
receive Chronocort(R) twice-daily or standard-of-care. Based upon
the headline results from the European Phase 3 study, Diurnal
paused this study while it reviewed the European data package. The
design of the US study has now been optimised based on this new
information. The study is expected to recommence once the Group has
identified a development and commercialisation partner for
Chronocort(R) in the US. Diurnal believes that the preparatory work
undertaken for this study, including identification of key clinical
sites, will substantially accelerate its recommencement once a US
partner has been secured.
During the year, Diurnal also developed a Phase 2 study design
to assess the utility of Chronocort(R) in AI, which represents a
sizeable commercial opportunity in the US (potentially close to a
$1bn market opportunity) with a highly favourable competitive
landscape. Following the Chronocort(R) European Phase 3 study
results, the AI study was paused in order to preserve cash. Subject
to funding, Diurnal believes that this study is ready to commence,
either in-house or with the support of a US partner.
Maximising late-stage pipeline value
During the year, Diurnal continued to optimise market access for
its products outside of Europe and the US, where the Group aims to
maximise revenues from Alkindi(R) and Chronocort(R) by entering
into distribution and/or licensing agreements. The Group seeks to
access territories where there is the potential for a price which
reflects the innovation for its products, and which can use the
European or US regulatory dossiers as the basis for local
regulatory submissions.
This approach is exemplified by Diurnal's agreements with Emerge
Health for the marketing of Alkindi(R) and Chronocort(R) in
Australia and New Zealand, and Medison for the marketing of
Alkindi(R) and Chronocort(R) in Israel. During the year, Medison
confirmed that the MAA for Alkindi(R) had been accepted for filing
by the Israeli Ministry of Health and Emerge Health successfully
obtained Orphan Drug Designation from the Therapeutic Goods
Administration (TGA) in Australia. Just after the year end, Emerge
Health successfully submitted an MAA for Alkindi(R) in Australia
with approval anticipated around the middle of 2020.
Following the grant of the Group's first patents for Alkindi(R)
and Chronocort(R) in Japan during 2018, Diurnal is continuing to
assess its strategy for entry into this important market with a
local partner. Japan is a well-developed pharmaceutical market,
with orphan drug designation and a large population, and is
therefore an attractive market estimated at $397 million for
Diurnal's late-stage products for CAH and AI.
Diurnal is also assessing the potential for the
commercialisation of Alkindi(R) in China, where it recently
received notification of the grant of its patent for the product.
The Chinese health authorities have recently prioritised the
treatment of chronic paediatric diseases and China represents a
large market opportunity for paediatric AI (including CAH), with
patient numbers estimated to be at least twice the size of the
European market.
Early stage pipeline: targeting needs in endocrine diseases
Diurnal aspires to be a significant participant in the
endocrinology field with a pipeline of therapies targeting multiple
endocrine disorders where patient and clinical needs are
underserved. Whilst Diurnal's primary focus is currently on
bringing its late-stage cortisol deficiency pipeline to the market
in Europe and the US and to expand these products into new
indications and geographies, the Group's long-term plan is to
expand into further endocrine disease areas, such as those
associated with the thyroid, gonads and pituitary.
During the year, Diurnal has been focused on applying for
government grants to assist the development of its early-stage
pipeline whilst focusing resources on its late-stage pipeline.
Feedback from these grant applications has been positive and
highlight the significant unmet needs Diurnal is aiming to
address.
During the year, Diurnal completed dosing of a Phase 1
proof-of-concept clinical study with DITEST(TM), its native oral
testosterone therapy for the treatment of male hypogonadism (a
market opportunity of close to $5bn). In this study, carried out in
24 hypogonadal men, the performance of DITEST(TM) has been assessed
in terms of oral absorption of testosterone with or without a high
fat meal and levels of by-products of metabolism, compared to oral
modified testosterone undecanoate. The study is scheduled to read
out during Q4 2019 and, if successful, Diurnal plans to enter
partnering discussions for DITEST(TM) in order to maximise the
value of this innovative treatment.
Diurnal's other early-stage pipeline products include a
modified-release T3 replacement therapy for patients with
hypothyroidism who do not respond to current standard-of-care (a
potential market of $1bn in the US and Europe) and its novel siRNA
therapy for Cushing's disease (a market opportunity of close to
$0.5bn), a condition characterised by an excess of cortisol. In
addition, Diurnal regularly assesses third party products for
endocrine disorders that fit within its strategic vision.
Further strengthening of in-market exclusivity
Diurnal's pipeline of product candidates for cortisol deficiency
are protected by an extensive patent portfolio, benefitting from
granted or pending patents in key jurisdictions, along with strong
protection through Orphan Drug Designations.
During the year, a second US patent was granted for
Chronocort(R) and a second patent for Alkindi(R) was granted in
Japan. These granted patents provide in-market protection for both
Alkindi(R) and Chronocort(R) to 2034. The Group expects to continue
to expand patent coverage for its products in the future, further
strengthening its in-house patent portfolio.
Diurnal's late-stage products are targeting rare and orphan
diseases and therefore, in addition to the strong and expanding
patent portfolio, have the benefit of additional regulatory
protection in key markets. The FDA has granted Chronocort(R) Orphan
Drug Designation in the treatment of both CAH and AI and has
granted Alkindi(R) Orphan Drug Designation in the treatment of
paediatric AI, providing seven years of market exclusivity in the
US assuming Orphan Drug Status is granted upon the expected
approval of these products. In Europe, the paediatric use marketing
authorisation (PUMA) for Alkindi(R) affords ten years of data and
market exclusivity, whilst Chronocort(R) benefits from separate
Orphan Drug Designations for both CAH and AI.
Outlook
Following the positive Scientific Advice meeting with the EMA,
Diurnal anticipates submitting an MAA for Chronocort(R) during Q4
2019. If approved by the EMA, the product will join Alkindi(R) to
enlarge the Group's commercial cortisol replacement therapy
franchise. This should further enable Diurnal to build a strong and
profitable European business through penetration of the combined
addressable market for the treatment of CAH and paediatric AI,
which is estimated by the Group to be worth over $300m in Europe
alone.
Diurnal also expects additional progress for Alkindi(R) , with
further country launches in Europe scheduled during H2 2019 to
accelerate growth of revenues, along with a planned NDA submission
in the US during Q4 2019. Diurnal has received strong interest in
Alkindi(R) and Chronocort(R) for the US and will continue to
progress licensing discussions, including the potential for
co-development of Chronocort(R) in the US, both in CAH and AI. The
US remains an important market for Diurnal's late-stage products,
with a combined market size for the treatment of CAH and paediatric
AI estimated at $125m, and a future expansion opportunity in adult
AI, which represents a close to $1bn market opportunity in the
US.
The Group is well positioned to build on the approval of its
first product Alkindi(R) , and to become a fast growing,
independent, international specialty pharmaceutical company
focusing on creating products that address unmet patient needs in
endocrinology.
Martin Whitaker
Chief Executive Officer
23 September 2019
Financial review
Revenues and gross margin
The Group launched Alkindi(R) in Germany in May 2018 and in the
UK in September 2018. Total revenues recorded for the year were
GBP1,044k (2018: GBP73k), which is net of provisions for stock
placed into the wholesale distribution chain on a sale-or-return
basis.
The roll-out of Alkindi(R) has been impacted by the
unpredictability of timing of pricing discussions, which are
conducted on a country-by-country basis, by activities required to
prepare for the UK's planned exit from the EU (including the
establishment of a subsidiary company within the EU and securing
the required licenses and authorisations) and the impact of the
Falsified Medicines Directive. Nevertheless, the Group expects a
series of country launches during the remainder of 2019 that will
continue to provide strong revenue growth for Alkindi(R) and the
Group's supply chain is fully prepared for the UK's departure from
the EU.
Gross margin for the year was 79% (2018: 79%). As Alkindi(R)
sales volumes grow, the Group expects to be able to realise margin
improvements through manufacturing efficiencies.
Operating expenses
Research and development (R&D) expenditure for the year was
GBP8.7m (2018: GBP10.0m). Expenditure increased significantly in
the first half of the year as the Group undertook activities to
initiate the Chronocort(R) US Phase 3 trial, in addition to
completing the Chronocort(R) Phase 3 registration trial in Europe
and transitioning patients completing this study into the European
long-term follow-on study. Following the Chronocort(R) European
Phase 3 trial read-out in October 2018, the US clinical studies
were put on hold, in order to re-assess the study designs and also
to extend the cash runway. Consequently, R&D expenses were
significantly lower in the second half of the financial year.
R&D expenditure in the consolidated income statement is net
of capitalised development costs for Alkindi(R) of GBP37k (2018:
GBP15k). The Group continues to expense development costs relating
to the separate development programme for Alkindi(R) in the US, and
for Chronocort(R) development.
Administrative expenses for the year were GBP6.7m (2018:
GBP6.8m). Expenses in the year included a credit of GBP0.6m
relating to the release of a provision for Employers' National
Insurance contributions on share option exercises, reflecting the
fall in the share price following the announcement of the
Chronocort(R) Phase 3 clinical trial headline data in October 2018.
Following the Chronocort(R) European Phase 3 trial read-out in
October 2018, a number of cost-saving measures were implemented.
The impact of these cost-saving measures offset continued
investment in the launch of Alkindi(R) across Europe.
Operating loss
Operating loss for the year reduced to GBP14.5m (2018:
GBP16.8m), reflecting the cost-saving measures outlined above and
increased revenues.
Financial income and expense
Financial income in the year was GBP130k (2018: GBP95k) despite
lower average cash balances compared to the previous year, largely
reflecting the Group's decision to hold a portion of its cash
balances in US Dollars which benefited from a higher interest
rate.
Financial expense for the prior year of GBP221k largely
comprised the non-cash financial expense of the convertible loan,
which was converted into shares at the time of the Group's
fundraising in April 2018.
Loss on ordinary activities before tax
Loss before tax for the period was GBP14.4m (2018:
GBP16.9m).
Tax
The current year includes the estimated research and development
tax credit claim in respect of the year ended 30 June 2019 of
GBP2,105k, which has not yet been submitted to HMRC, along with an
additional GBP3k in respect of the year ended 30 June 2018
following submission and payment of the claim. The Group has not
recognised any deferred tax assets in respect of trading losses
arising in either the current financial year or accumulated losses
in previous financial years.
Earnings per share
Basic loss per share was 19.7 pence (2018: 26.8 pence).
Cash flow
Net cash used in operating activities was GBP13.7m (2018:
GBP12.8m). The operating cash outflow was significantly reduced in
the second half of the year, reflecting the placing Chronocort(R)
US development on hold and the cost-saving measures outlined
above.
Net cash from investing activities was GBP0.1m (2018: net cash
from investing activities GBP11.1m). The prior year balance
reflects the movement of all longer-dated held to maturity
financial assets to short-dated cash and cash equivalents resulting
from the change in the Group's treasury arrangements during the
year: all its cash deposits are now immediately accessible and,
consequently, are classified as cash and cash equivalents.
Net cash from financing activities during the year was GBP5.5m,
reflecting the net proceeds of the placing and open offer completed
in June 2019. Net cash from financing activities in the prior year
of GBP9.9m reflects the net proceeds of the placing completed in
April 2018.
Balance sheet
Total assets decreased to GBP13.5m (2018: GBP22.5m), largely
reflecting the utilisation of cash in operating activities
highlighted above, partly offset by the placing and open offer
completed in June 2019.
Following the approval of the Alkindi(R) PUMA in February 2018,
the Group is now recognising stocks of raw materials, components,
work-in-progress and finished goods relating to its commercial
supplies of Alkindi(R) on the balance sheet. Total stock at the
year-end increased substantially to GBP672k (2018: GBP123k),
largely reflecting manufacturing batches in progress to support the
planned country launches for Alkindi(R) in the second half of
2019.
The Group also has trade receivables arising from the sale of
Alkindi(R) to wholesalers and distribution partners; at the year
end, trade receivables amounted to GBP510k (2018: GBP77k). Trade
receivables are expected to reduce significantly as a proportion of
revenues in future, once initial extended credit terms revert to
normal credit terms.
Cash and cash equivalents were GBP9.1m (2018: GBP17.3m). Total
liabilities decreased to GBP2.5m (2018: GBP5.7m), reflecting the
reduced level of operating activities in the second half of the
financial year noted above.
Financial outlook
Following the cost reduction measures outlined above and the net
proceeds from the placing and open offer completed in June 2019,
Diurnal expects its cash resources to last until at least Q2 2020
based upon current planned expenditure which is focused on
submission of marketing authorisation applications for
Chronocort(R) in Europe and Alkindi(R) in the US and continued
development of the European commercial organisation and roll-out of
Alkindi(R) together with ongoing licensing disussions. Diurnal
believes that submission of the marketing authorisation
applications, planned for Q4 2019, are key steps in the
implementation of the Group's strategic plans that will support
further financing activities. In addition, the Group is encouraged
by US interest in its late-stage pipeline, which provides an
opportunity to generate non-dilutive income, including potential
for signature fees, milestone payments and development cost
funding.
Richard Bungay
Chief Financial Officer
23 September 2019
Consolidated income statement
for the year ended 30 June 2019
Year ended Year ended
30 June 30 June
2019 2018
Note GBP000 GBP000
Revenue 1,044 73
Cost of sales (224) (15)
----------- -----------
Gross profit 820 58
Research and development
expenditure (8,690) (10,024)
Administrative expenses (6,656) (6,813)
Other operating income - -
----------- -----------
Operating loss (14,526) (16,779)
Financial income 5 130 95
Financial expense 6 - (221)
Loss before tax (14,396) (16,905)
Taxation 7 2,108 2,282
Loss for the year (12,288) (14,623)
----------- -----------
Basic and diluted loss per
share (pence per share) 8 (19.7) (26.8)
----------- -----------
All activities relate to continuing operations.
Consolidated statement of comprehensive income
for the year ended 30 June 2019
Year ended Year ended
30 June 30 June
2019 2018
GBP000 GBP000
Loss for the year and total
comprehensive loss for the
year (12,288) (14,623)
----------- -----------
Consolidated balance sheet
as at 30 June 2019
2019 2018
Note GBP000 GBP000
Non-current assets
Intangible assets 49 16
Property, plant and equipment 33 26
--------- ---------
82 42
Current assets
Inventories 9 672 123
Research and development
tax credit claims receivable 7 2,105 2,275
Trade and other receivables 10 1,457 2,818
Cash and cash equivalents 11 9,147 17,284
--------- ---------
13,381 22,500
Total assets 13,463 22,542
Current liabilities
Trade and other payables 12 (2,503) (5,661)
--------- ---------
(2,503) (5,661)
Non-current liabilities
Trade and other payables (16) -
(16) -
Total liabilities (2,519) (5,661)
Net assets 10,944 16,881
--------- ---------
Equity
Share capital 13 4,226 3,067
Share premium 42,153 37,769
Group reconstruction reserve (2,943) (2,943)
Other reserve - -
Accumulated losses (32,492) (21,012)
--------- ---------
Total equity 10,944 16,881
--------- ---------
Consolidated statement of changes in equity
for the year ended 30 June 2019
Share Share Group reconstruction Other Accumulated
capital premium reserve reserve losses Total
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
Balance at 30
June 2017 2,616 23,675 (2,943) 1,458 (7,730) 17,076
Loss for the
year and total
comprehensive
loss for the
year - - - - (14,623) (14,623)
Equity settled
share-based payment
transactions - - - - 808 808
Issue of shares
for cash 289 10,235 - - (4) 10,520
Costs charged
against share
premium - (630) - - - (630)
Issue of share
capital on conversion
of loan 162 4,489 - (921) - 3,730
Equity component
of convertible
loan - - - (537) 537 -
--------- --------- --------------------- --------- ------------ ---------
Total transactions
with owners recorded
directly in equity 451 14,094 - (1,458) 1,341 14,428
--------- --------- --------------------- --------- ------------ ---------
Balance at 30
June 2018 3,067 37,769 (2,943) - (21,012) 16,881
Loss for the
year and total
comprehensive
loss for the
year - - - - (12,288) (12,288)
Equity settled
share-based payment
transactions - - - - 825 825
Issue of shares
for cash 1,159 4,790 - - (17) 5,932
Costs charged
against share
premium - (406) - - - (406)
--------- --------- --------------------- --------- ------------ ---------
Total transactions
with owners recorded
directly in equity 1,159 4,384 - - 808 6,351
--------- --------- --------------------- --------- ------------ ---------
Balance at 30
June 2019 4,226 42,153 (2,943) - (32,492) 10,944
--------- --------- --------------------- --------- ------------ ---------
Consolidated cash flow statement
for the year ended 30 June 2019
Year ended Year ended
30 June 2019 30 June 2018
Note GBP000 GBP000
Cash flows from operating activities
Loss for the year (12,288) (14,623)
Adjustments for:
Depreciation, amortisation and
impairment 22 14
Share-based payment 825 808
Net foreign exchange gain (10) (203)
Financial income 5 (130) (95)
Finance expenses 6 - 221
Taxation 7 (2,108) (2,282)
Increase in inventories (549) (123)
Decrease / (increase) in trade
and other receivables 1,361 (1,535)
(Decrease) / Increase in trade
and other payables (3,143) 2,320
------------- -------------
Cash used in operations (16,020) (15,498)
Interest paid - (2)
Tax received 7 2,279 2,737
------------- -------------
Net cash used in operating activities (13,741) (12,763)
------------- -------------
Cash flows from investing activities
Additions of property, plant
and equipment (25) (19)
Capitalisation of research and
development expenditure (37) (15)
Purchases of held to maturity
financial assets - (5,500)
Disposal of held to maturity
financial assets - 16,500
Interest received 130 107
------------- -------------
Net cash from investing activities 68 11,073
------------- -------------
Cash flows from financing activities
Net proceeds from issue of share
capital 5,526 9,890
Net cash from financing activities 5,526 9,890
------------- -------------
Net (decrease) / increase in
cash and cash equivalents (8,147) 8,200
Cash and cash equivalents at
the start of the year 17,284 8,881
Effect of exchange rate changes
on cash and cash equivalents 10 203
------------- -------------
Cash and cash equivalents at
the end of the year 9,147 17,284
------------- -------------
Notes to the consolidated financial statements
1 Corporate information
Diurnal Group plc (the "Company" or the "parent") is a public
limited company incorporated and domiciled in the United Kingdom,
and registered in England (registered number: 09846650), whose
shares are publicly traded. The registered office is located at
Cardiff Medicentre, Heath Park, Cardiff CF14 4UJ.
The Group is a clinical stage specialty pharmaceutical business
targeting patient needs in chronic endocrine (hormonal)
diseases.
2. Basis of preparation
The financial information set out above does not constitute the
Group's statutory accounts for the years ended 30 June 2019 or 2018
but is derived from those accounts. Statutory accounts for 2018
have been delivered to the registrar of companies, and those for
2019 will be delivered in due course. The auditor has reported on
those accounts; their report for 2019 was unqualified and included
a material uncertainty relating to the going concern paragraph
which drew attention to a note in those financial statements
covering the same matter as disclosed in Note 3 of this
announcement. The auditors' report for 2018 was also unqualified
and included a material uncertainty relating to the going
concern.
The consolidated financial information has been prepared in
accordance with International Financial Reporting Standards (IFRS)
as adopted by the European Union, IFRS IC interpretations and the
Companies Act 2006. The financial information contained in these
financial statements have been prepared under the historical cost
convention, and on a going concern basis.
The Group has applied the following standards and amendments for
the first time for their annual reporting period commencing 1 July
2018:
-- IFRS 9, 'Financial Instruments';
-- IFRS 15 'Revenue from Contracts with Customers';
-- Classification and Measurement of Share-based Payment Transactions - Amendments to IFRS 2;
-- Annual Improvements 2014-2016 cycle;
-- Transfers to Investment Property - Amendments to IAS 40; and
-- Interpretation 22, 'Foreign Currency Transactions and Advance Consideration'.
The Group had to change its accounting policies following the
adoption of IFRS 9 and IFRS 15. All amendments listed above did not
have any impact on the amounts recognised in prior periods and are
not expected to significantly affect the current or future periods.
All other accounting policies used in the financial information are
consistent with those used in the prior year.
Certain new accounting standards and interpretations have been
published that are not mandatory for 30 June 2019 reporting periods
and have not been early adopted by the Group. The Group's
assessment of the impact of these new standards and interpretations
is set out below.
IFRS 16, 'Leases': IFRS 16 was issued in January 2016. It will
result in almost all leases being recognised on the balance sheet
by lessees, since the distinction between operating and finance
leases is removed. Under the new standard, an asset (that is, the
right to use the leased item) and a financial liability to pay
rentals are recognised. The only exceptions are short-term and
low-value leases.
There are no other standards that are not yet effective and that
would be expected to have a material impact on the entity in the
current or future reporting periods and on foreseeable future
transactions.
The preparation of financial information in conformity with IFRS
requires management to make estimates and assumptions that affect
the reported amounts of assets and liabilities at the date of the
financial statements and the reported amounts of revenues and
expenses during the reporting period. Although these estimates are
based on management's best knowledge of the amount, event or
actions, actual events ultimately may differ from those
estimates.
3. Going concern
For the year ended 30 June 2019, the Group made an operating
loss of GBP14.5m on revenue of GBP1.0m and used net cash in
operating activities of GBP13.7m. Cash and cash equivalents at 30
June 2019 were GBP9.1m.
The Board has considered the applicability of the going concern
basis in the preparation of the financial statements. This included
the review of internal budgets and financial results and a review
of cash flow forecasts for the 12 month period following the date
of signing the financial statements. Under current business plans
the Group's cash resources will extend to Q2 2020. Based on this,
additional funding is expected to be required by the end of Q1 2020
to support the Group's and the Company's going concern status.
Dependent upon the funds raised, and the level of income generated
from licensing activities, further funding may be required to reach
profitability.
The Group completed a GBP5.9m fundraising with existing and new
investors in June 2019. The Directors have a reasonable expectation
that the Group will be able to raise further financing, which could
come from a variety of sources, to support its ongoing development
and commercialisation activities, following the anticipated
completion of marketing authorisation applications for
Chronocort(R) in Europe and Alkindi(R) in the US, both expected in
Q4 2019. The Directors also have a reasonable expectation that the
Group will be able to generate significant funding through entering
into strategic collaborations for the development and
commercialisation of its late-stage pipeline outside of Europe.
However, there can be no guarantee that the Group will be able to
raise sufficient funding from existing and new investors, nor that
the Group will be able to secure strategic collaborations for its
late-stage pipeline. In the event that the Group does not
successfully raise new financing, the Directors consider that the
Group would be able to reduce expenditure on its development
programmes, potentially extending the
Group's cash resources to more than 12 months from the date of
signing the financial statements.
Based on the above factors the Directors believe that it remains
appropriate to prepare the financial statements on a going concern
basis. However, the above factors give rise to a material
uncertainty which may cast significant doubt on the Group's and the
Company's ability to continue as a going concern and, therefore, to
continue realising its assets and discharging its liabilities in
the normal course of business. The financial statements do not
include any adjustments that would result from the basis of
preparation being inappropriate.
4. Segmental information
The Board regularly reviews the Group's performance and balance
sheet position for its operations and receives financial
information for the Group in order to assess performance and make
strategic decisions about the allocation of resources. The Board
considers it appropriate to report as follows:
-- Alkindi(R) - development and supply of the Group's Alkindi(R) product
-- Chronocort(R) - development of the Group's Chronocort(R) product
-- Central and early-stage - all other activities, including
development of the Group's early-stage pipeline products
Segmental results are calculated on an IFRS basis. All revenue
is recognised at a point in time rather than over time.
Alkindi(R) Chronocort(R) Central and Total
early-stage
2019 2019 2019 2019
GBP000 GBP000 GBP000 GBP000
Revenue 1,044 - - 1,044
----------- -------------- ------------- ---------
Operating loss (1,935) (5,954) (6,637) (14,526)
Financial income - - 130 130
Financial expense - - - -
Taxation - - 2,108 2,108
----------- -------------- ------------- ---------
Loss for the year (1,935) (5,954) (4,399) (12,288)
----------- -------------- ------------- ---------
Alkindi(R) Chronocort(R) Central and Total
early-stage
2018 2018 2018 2018
GBP000 GBP000 GBP000 GBP000
Revenue 73 - - 73
----------- -------------- ------------- ---------
Operating loss (2,685) (6,210) (7,884) (16,779)
Financial income - - 95 95
Financial expense - - (221) (221)
Taxation - - 2,282 2,282
----------- -------------- ------------- ---------
Loss for the year (2,685) (6,210) (5,728) (14,623)
----------- -------------- ------------- ---------
The revenue analysis below is based on the country of
registration of the fee-paying party:
Year ended Year ended
30 June 2019 30 June 2018
GBP000 GBP000
UK 300 -
Rest of Europe 744 73
------------- -------------
1,044 73
------------- -------------
An analysis of revenue by customer is set out in the table
below:
Year ended Year ended
30 June 2019 30 June 2018
GBP000 GBP000
Customer A 300 -
Customer B 291 -
Customer C 151 -
Customer D 137 17
Customer E 134 55
Other customers 31 1
------------- -------------
1,044 73
------------- -------------
5. Finance income
Year ended Year ended
30 June 2019 30 June 2018
GBP000 GBP000
Interest receivable on cash and cash equivalents
and term deposits 130 95
Total finance income 130 95
------------- -------------
6. Finance expenses
Year ended Year ended
30 June 2019 30 June 2018
GBP000 GBP000
Total interest payable on loans - 221
Total finance expense - 221
--------------- -------------
IP Group convertible loan
On 24 December 2015 the Company received GBP4.7m from IP2IPO
Limited, a wholly owned subsidiary of IP Group plc, under a
convertible loan agreement.
At the time of the fundraising in April 2018, IP2IPO Limited
exercised its option to convert the loan into equity at the IPO
price of 144 pence per share. The financial expense for the year
ended 30 June 2018 represents the accrual of the effective interest
required to charge the transaction costs and equity element of the
loan to the income statement over the term of the loan for the
period up to the date of conversion of the loan.
7. Taxation
The Group is entitled to claim tax credits in the United Kingdom
under the UK research and development (R&D) small or
medium-sized enterprise (SME) scheme, which provides additional
taxation relief for qualifying expenditure on R&D activities
and includes an option to surrender a portion of tax losses arising
from qualifying activities in return for a cash payment from HM
Revenue & Customs (HMRC).
With effect from the year ended 30 June 2017, the Group has
reflected R&D tax credits on an accruals basis since it has
established a track record of agreeing claims with HMRC.
Consequently, the income statement for the year ended 30 June 2018
reflects the R&D tax credit claim for the year ended 30 June
2018, which was received from HMRC in February 2019. The amount in
respect of the year ended 30 June 2019 has not yet been agreed with
HMRC, although there is no reason to believe that this claim will
be rejected.
Year ended Year ended
30 June 2019 30 June 2018
GBP000 GBP000
Current tax:
- UK corporation tax on losses of year - -
- Research and development tax credit receivable
for the current year (2,105) (2,275)
- Prior year adjustment in respect of research
and development tax credit (3) (7)
Deferred tax:
- Origination and reversal of temporary
differences - -
------------- -------------
Tax on loss on ordinary activities (2,108) (2,282)
------------- -------------
Reconciliation of total tax expense
The tax assessed for the year varies from the small company rate
of corporation tax as explained below:
Year ended Year ended
30 June 2019 30 June 2018
GBP000 GBP000
Loss on ordinary activities before tax (14,396) (16,905)
------------- -------------
Tax at the standard rate of UK corporation
tax rate of 19% (2018: 19%) (2,735) (3,212)
Effects of:
Expenses not deductible for tax purposes 35 154
Depreciation in excess of capital allowances (2) (2)
Enhanced research and development relief (906) (978)
Share-based payments 134 (62)
Prior year adjustment in respect of research
and development tax credit (3) (7)
Tax losses carried forward 1,369 1,825
------------- -------------
Total tax credits for the year (2,108) (2,282)
------------- -------------
The standard rate of UK corporation tax has been 19% from 1
April 2017, giving rise to an effective rate of tax for the year
ended 30 June 2019 of 19% (year ended 30 June 2018: 19%).
8. Loss per share
Year ended Year ended
30 June 2019 30 June 2018
Loss for the year (GBP000) (12,288) (14,623)
Weighted average number of shares (000) 62,390 54,596
Basic and diluted loss per share (pence
per share) (19.7) (26.8)
------------- -------------
The diluted loss per share is identical to the basic loss per
share in all years, as potentially dilutive shares are not treated
as such since they would reduce the loss per share.
9. Inventories
2019 2018
GBP000 GBP000
Work in progress 521 14
Finished goods 151 109
------- -------
672 123
------- -------
10. Trade and other receivables
2019 2018
GBP000 GBP000
Trade receivables 510 77
VAT recoverable 219 732
Prepayments 482 1,904
Other debtors 246 105
1,457 2,818
------- -------
11. Cash and cash equivalents
2019 2018
GBP000 GBP000
Cash at bank and on hand 9,147 17,284
------- -------
The Group holds its cash and cash equivalents with its clearing
bank and in a segregated cash facility providing same day access to
its cash. The Group's treasury policy requires that deposits are
held with financial institutions having a minimum credit rating of
A- (from Moody's S&P or Fitch), that individual counterparty
exposure is no more than GBP5m and that the maximum term is 12
months. The Group's deposits are in line with this policy.
12. Trade and other payables
2019 2018
GBP000 GBP000
Trade payables 1,145 3,159
Other payables 37 9
Other tax and social security 82 72
Accrued expenses 1,255 2,421
------- -------
2,519 5,661
------- -------
The Group accrues for employer National Insurance contributions
that may become due on unexercised share-based payments that are
not HMRC tax-advantaged. In the current year GBP16k of the accrual
has been classified as a non-current liability. The comparative
amount of GBP76k has not been reclassified as the amount is not
considered material.
13. Share capital
2019 2019 2018 2018
Number GBP000 Number GBP000
Ordinary shares of GBP0.05 each 84,528,382 4,226 61,336,523 3,067
----------- ------- ----------- -------
Date of preparation: September 2019 Code: CORP-GB-0037
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
FR BRGDCISDBGCX
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September 24, 2019 02:00 ET (06:00 GMT)
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