RNS Number:7223M
Henderson Morley PLC
29 January 2008
29 JANUARY 2008
HENDERSON MORLEY PLC
(AIM: HML)
INTERIM RESULTS FOR THE SIX MONTHS TO 31 OCTOBER 2007
The Board of Henderson Morley plc ("Henderson Morley" or "the Company"), the AIM
listed drug discovery company, announces its interim results for the six months
to 31 October 2007.
HIGHLIGHTS
* Strategic Review Update;
* Collaborative Agreement with Australian Government-back Research
organisation;
* Progress on animal health pipeline; and
* New formulations for ICVT.
Executive Chairman Andrew Knight said: "We are excited about the prospects for
the future of the Company as we have the strongest pipeline, with the greatest
number of patents, both granted and under application, in the history of
Henderson Morley."
---ENDS---
ENQUIRIES:
HENDERSON MORLEY PLC 0121 442 4600
Andrew Knight, Chairman
BISHOPSGATE COMMUNICATIONS LTD 0207 562 3350
Maxine Barnes
Nick Rome
BREWIN DOLPHIN SECURITIES LTD 0113 241 0126
Neil Baldwin
Notes to Editors:
Henderson Morley was founded in 1996 with the objective of developing its anti
viral application (Ionic Contra Viral Therapy (ICVT). ICVT is the Lead Platform
and has been developed in-house and HML wholly owns the patent IPR.
Further information on Henderson Morley plc can be accessed through the
Company's website at www.henderson-morley.com
CHAIRMAN'S STATEMENT
Financial Summary
Turnover for the period under review was �686 (2006:�838) which, after expenses
and R&D costs, showed a pre tax loss of �592,494 (2006: �461,202). Cash at Bank
as at 31 October 2007 was �875,120 (2006: �1,363,338). The total number of
shares in issue is now 491,928,631.
Overview
The period under review has been highly active and has seen the Company complete
work on its refurbished laboratory, resulting in a newly formed Molecular
Virology Lab and the provision of significantly larger facilities for virus
culture.
Strategic Review
On 3 July 2007, your Board announced that it was to undertake a review to
explore strategic options in order to maximise shareholder value. This was
expected to be a lengthy process and has, so far, proved to be the case. The
object of the review, which is still ongoing, is exploring options which include
the possible sale of some or all of the business. Under The City Code on
Takeovers and Mergers, the announcement of a review which does not rule out the
sale of the business placed the Company into what is technically referred to as
an "offer period" - for the sake of clarity this does not (and did not) mean
that the Company had received any offer at the time the announcement was made.
This process has resulted in dialogue with several companies both here and
internationally and we now have a short listing of companies with whom we wish
to have further discussions, which may or may not lead to an offer being made
for some or all of the Company's business.
The Company will remain in an offer period until such time as the Company
terminates the strategic review, and the ongoing discussions are ended (at which
point the Company would announce this via Regulatory News Service) or until,
following the announcement of a firm intention to make an offer that offer is
unsuccessful or lapses.
PREPS and L-Particles
Collaborative Agreement with Australian Government-backed Research team
Since the end of the period, we announced that the Company has signed a
collaborative research and material transfer agreement with the Australian
Government-backed Centre for Vaccine Development ("ACVD"), which is part of the
Queensland Institute of Medical Research.
The collaborative research agreement is to participate in the continuing
development of a vaccine targeted at preventing Cytomegalovirus (CMV) disease.
CMV is the most important preventable infectious disease of unborn children in
the developed world. This collaboration will use a combination of technologies
from Henderson Morley and ACVD. Henderson Morley is developing PREPS and
L-particles vaccine candidates based upon non replicating herpes viruses that
are DNA free.
Each party will bear its own development costs and Henderson Morley will fund
its costs from the current burn, and any new Intellectual Property arising out
of this collaboration will be owned jointly by Henderson Morley and ACVD.
ACVD has a world class reputation for quality research and is at the forefront
in the discovery of candidate vaccine antigens as well as vaccine production and
the testing of potential vaccines and drugs from cellular through to clinical
levels.
We believe that this is an important validation for the use of PREPS and
L-Particles; work has commenced with ACVD and I look forward to reporting on
progress in due course. We would expect that this work will lead to several
more collaborations and licences.
HSV Vaccine
Other laboratory studies are underway in a US-based contract research
laboratory. These studies are examining the safety and immunogenicity of PREPS
and L-Particles in an established and validated model. The data from these
studies is will be the first step towards the development of a lead candidate to
target the herpes simplex virus, which is a considerable market opportunity.
Systems Biology Laboratory UK Ltd ("SBL")
The Company announced a collaborative research agreement with SBL. The team
based in Abingdon has considerable expertise in the study of dendritic cells -
important immune cells that help co-ordinate an immune response in many diseases
including cancer. The work that they have undertaken, at no cost to Henderson
Morley, is to study the effects of PREPS and L-particles on these specialist
cells. We are very pleased with this collaboration, as success in these studies
will assist the licensing efforts of several applications of PREPS and
L-particles.
Animal Health
KHV Vaccine
The Company has now finalised terms, pending ratification, for a sponsored
development and an option to licence with a multi national pharmaceutical
company to take an exclusive worldwide licence to commercially exploit vaccine
candidates produced by Henderson Morley. This agreement is a precursor to the
grant of a Licence for the intellectual property rights of Henderson Morley's
Koi Carp herpes vaccine. The Licence will be worldwide and the pharmaceutical
company has agreed to pay towards development costs of the vaccine.
We expect that the Company will release an announcement with more information
in respect of this transaction shortly.
Feline Herpes Virus
The clinical trial in conjunction with Triveritas continues and is examining the
safety and efficacy of ICVT ophthalmic drops for animal health. This study is
underway in Germany, and several veterinary centres have been recruited. The
first patients have been recruited and we are still expecting to have results by
the end of Q1 2008.
ICVT - New Formulations
The Company announced that it was planning a pre-IND meeting with the US FDA
with regard to injectable formulations of ICVT for use in the treatment of
genital warts and the orphan disease, recurrent respiratory papillomatosis.
This result of this development is that the Company now has a formulation that
may be suitable for clinical development. However, following detailed
discussions with formulation experts, it has been decided to use the data
created to develop a second, more advanced, formulation with a longer mode of
action. Consequently, we are now focussing on this aspect with a team whose
expertise is in developing and marketing long acting synthetic polymers. This
work will begin in Q1 08.
Partner Update
With regard to the current agreements with Croma, Cutanea and Amistad, there is
no further development at this stage. We envisage being able to update the
market in respect of these three partnerships in due course, using the normal
channels
Outlook
The period under review has been exceptionally busy for the Company. Not only
are we meeting and speaking to many companies as far as the strategic review is
concerned but we are also establishing record numbers of contacts of potential
partners. Following the ACVD announcement, we have seen a significant uplift in
the number of enquiries we have received regarding PREPS and L-Particles.
We also continue to have discussions with regard to potential licence agreements
for the remaining applications of ICVT.
We are excited about the prospects for the future of the Company as we have the
strongest pipeline, with the greatest number of patents both granted and under
application, in the history of Henderson Morley. Furthermore, we are pleased to
report that by careful negotiation of these agreements, we are able to contain
research costs to within budgeted burn and therefore maximise shareholder funds.
We look forward to updating shareholders on our further progress.
ANDREW KNIGHT
Executive Chairman
6 months ended 6 months ended 12 months ended
31 October 31 October 30 April
2007 2006 2007
Note Unaudited Unaudited Audited
Continuing operations
Revenue 686 838 19,251
Cost of sales (408) (568) (1,905)
------------------------------------------------
Gross profit 278 270 17,346
Research and development (270,444) (214,749) (327,674)
Other administrative expenses (349,052) (251,036) (647,873)
Amortisation of intangible assets (2,656) (2,656) (5,312)
------------------------------------------------
Results from operating activities (621,874) (468,171) (963,513)
Finance income 31,363 8,669 36,053
Finance expenses (1,983) (1,700) (604)
------------------------------------------------
Net finance income 29,380 6,969 35,449
Loss before taxation (592,494) (461,202) (928,064)
Research and development tax credit 44,601 34,334 45,364
------------------------------------------------
Loss from continuing operations (547,893) (426,868) (882,700)
================================================
Basic and diluted loss per ordinary
share 4 (0.11p) (0.10)p (0.20)p
================================================
There were no recognised income or expenses other than the loss for the
financial period.
UNAUDITED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (IFRS)
For the six months ended 31 October 2007
Called up Share Profit and Total
share premium loss equity
capital account account
� � � �
At start of period 614,911 5,940,641 (4,865.427) 1,690,125
Loss for the period - - (547,893) (547,893)
--------------------------------------------------------
At end of period 614,911 5,940,641 (5,413,320) 1,142,232
========================================================
For the 12 months ended 30 April 2007
Called up Share Profit and Total
share premium loss equity
capital account account
� � � �
At start of period 479,911 3,913,641 (3,982,727) 410,825
Issue of shares (net of issue costs) 135,000 2,027,000 - 2,162,000
Loss for the year - - (882,700) (882,700)
---------------------------------------------------------
At end of period 614,911 5,940,641 (4,865,427) 1,690,125
=========================================================
For the six months ended 31 October 2006
Called up Share Profit and Total
share premium loss equity
capital account account
� � � �
At start of period 479,911 3,913,641 (3,982,727) 410,825
Issue of Shares (net of issue costs) 97,500 1,488,501 - 1,586,001
Loss for the period - - (426,868) (426,838)
---------------------------------------------------------
At end of period 577,411 5,402,142 (4,409,595) 1,569,988
=========================================================
At At At
31 October 2007 31 October 2006 30 April
Unaudited Unaudited 2007
Audited
� � �
Non current assets
Property, plant and equipment 113,038 52,393 74,500
Goodwill 58,964 58,964 58,964
Intangible assets 34,528 39,840 37,184
----------------------------------------------------
Total non current assets 206,530 151,197 170,648
----------------------------------------------------
Current assets
Inventories 400 1,228 400
Trade and other receivables 173,739 130,573 138,340
Cash and cash equivalents 875,120 1,363,338 1,478,460
----------------------------------------------------
Total current assets 1,049,259 1,495,139 1,617,200
----------------------------------------------------
Total assets 1,255,789 1,646,336 1,787,848
Current liabilities
Bank loans and overdrafts - - 8,311
Trade and other payables 113,557 76,378 89,412
----------------------------------------------------
Total current liabilities 113,557 76,678 97,723
----------------------------------------------------
Net assets 1,142,232 1,569,958 1,690,125
----------------------------------------------------
Capital and reserves
Called up share capital 614,911 577,411 614,911
Share premium account 5,940,641 5,402,142 5,940,641
Profit and loss account (5,413,320) (4,409,595) (4,865,427)
Shareholders' funds 1,142,232 1,569,958 1,690,125
Note 6 months 6 months 12 months
ended 31 ended 31 ended 30
October 2007 October April
Unaudited 2006 2007
Unaudited Audited
� � �
Net cash outflow from operations 5 (603,852) (456,128) (929,750)
Interest paid (1,983) (1,700) (604)
Research and development tax credit received 17,394 - 32,317
-----------------------------------------
Net cashflow from operating activities (588,441) (457,828) (898,037)
-----------------------------------------
Cashflow from investing activities
Purchases of property, plant and equipment (56,770) (21,128) (62,261)
Interest received 31,363 8,669 36,053
-----------------------------------------
Net cash outflow from investing activities (25,407) (12,459) (26,208)
-----------------------------------------
Financing
Proceeds from issue of shares - 1,650,000 2,250,000
Costs of share issue - (64,000) (88,000)
Finance lease - 710 -
Amount introduced/ (withdrawn) by Directors 18,819 - (14,521)
-----------------------------------------
Net cash inflow from financing 18,819 1,586,710 2,147,479
-----------------------------------------
(Decrease)/Increase in cash and cash equivalents (595,329) 1,116,423 1,223,234
-----------------------------------------
Cash and cash equivalents at beginning of period 1,470,149 246,915 246,915
Cash and cash equivalents at end of period 875,120 1,363,338 1,470,149
-----------------------------------------
Cash and cash equivalents for cash flow statement purposes 875,120 1,363,338 1,470,149
1 BASIS OF PREPARATION OF INTERIM REPORT
The information for the period ended 31 October 2007 is not audited and does not
constitute statutory accounts as defined in section 240 of the Companies Act
1985. The statutory accounts for the year ended 30 April 2007 were given an
unqualified audit report and extracts from those accounts have been adjusted
above for the adoption of IFRS. A copy of the statutory accounts for that year
has been delivered to the Registrar of Companies.
The interim accounts for the six month period to 31 October 2006 were also
unaudited.
2 ACCOUNTING POLICIES
Basis of Accounting
The Interim financial report has been prepared using accounting policies
consistent with International Financial Reporting Standards (IFRS) for the first
time. The disclosures required by IFRS 1 concerning the transition from UK GAAP
to IFRS are given in note 6.
The report has been prepared on a going concern basis in accordance with
International Financial Reporting Standards ("IFRS") as issued by the
International Accounting Standards Board ("IASB") at 31 October 2007 as well as
all interpretations issued by the International Financial Reporting
Interpretations Committee ("IFRIC") at 31 October 2007. The group has not
availed itself of early adoption options in such standards and interpretations.
The validity of a going concern basis may depend on the ability of the directors
to arrange further funding, in the form of proceeds from the issue of new
shares, to support the activities of its subsidiary undertaking, Henderson
Morley Research and Development Limited and on the completion and commercial
success of products under development. The directors have confirmed their
intention to seek appropriate levels of additional funding when required and to
continue to support the development activities of its subsidiary undertaking.
The financial statements have been prepared under the historical cost basis.
The principal accounting policies adopted are set out below:
Basis of consolidation
The consolidated financial statements incorporate the financial statements of
the Company and entities controlled by the Company (its subsidiaries) made up to
31 October and 30 April each year. Control is achieved where the Company has
the power to govern the financial and operating policies so as to obtain
benefits from its activities.
Revenue recognition
Revenue is measured at the fair value of the consideration received or
receivable and represents amounts receivable for goods and services provided in
the normal course of business, net of discounts, VAT and other sales-related
taxes.
Research and Development
The group considers that the regulatory, technical and market uncertainties
inherent in the development of new products mean that internal development costs
should not be capitalised as intangible non-current assets until commercial
viability of a project is demonstratable and appropriate resource is in place to
launch the products. Except in those circumstances, research and development
expenditure is expensed as incurred.
Taxation
The tax charge or credit represents the sum of the current and deferred tax.
Current tax is provided as amounts expected to be paid or recovered using the
tax rates and laws that have been enacted or substantively enacted by the
balance sheet date.
Deferred tax is the tax expected to be payable or recoverable on differences
between the carrying amounts of assets and liabilities in the financial
statements and corresponding tax bases used in the computation of taxable
profit, and is accounted for using the balance sheet liability method. Deferred
tax liabilities are generally recognised for all taxable temporary differences
and deferred tax assets are recognised to the extent that it is probable that
taxable profits will be available against which deductible temporary differences
can be utilised. Such assets and liabilities are not recognised if the
temporary difference arises from goodwill or from the initial recognition of
other assets and liabilities in a transaction that affects neither the tax
profit nor the accounting profit.
Deferred tax liabilities are recognised for taxable temporary differences
arising on investments in subsidiaries and associates, and interests in joint
ventures, except where the Group is able to control the reversal of the
temporary difference and it is probable that the temporary difference will not
reverse in the foreseeable future.
The carrying amount of deferred tax assets is reviewed at each balance sheet
date and reduced to the extent that is no longer probable that sufficient
taxable profits will be available to allow all, or part, of the asset to be
recovered.
Deferred tax is calculated at the tax rates that are expected to apply in the
period when the liability is settled or the asset is realised. Deferred tax is
charged or credited in the income statement, except when it relates to items
charged or credited directly to equity, in which case the deferred tax is also
dealt with in equity.
Intangible assets
Intangible assets acquired separately are measured on initial recognition at
cost. Following initial recognition, intangible assets are carried at cost less
any accumulated authorisation and any accumulated impairment losses. Internally
generated intangible assets are not capitalised until commercial viability of a
project is demonstrable and appropriate resource is in place to launch the
product. Except in those circumstances expenditure is charged against profit in
the year in which the expenditure is incurred. Intangible assets with a future
useful life are amortised over their useful economic lives. The intangible
assets residual values, useful lives and methods of valuation are reviewed and
adjusted, if appropriate, at each financial period end.
For intangible assets with finite useful lives, amortisation is calculated so
as to write off the cost of an asset less its estimated residual value over its
useful economic life as follows:
Know how, patents and licences - over 10 years.
Goodwill
Goodwill arising on consolidation represents the excess cost of acquisition over
the group's interest in the fair value of the identifiable assets and
liabilities of a subsidiary, associate or jointly controlled entity at the date
of acquisition.
Goodwill is recognised as an asset and reviewed for impairment at least
annually. Any impairment is recognised immediately in the income statement and
is not subsequently reversed. Goodwill arising on acquisition before the date
of transition to IFRS has been retained at the previous UK GAAP amounts subject
to being tested for impairment at that date.
Impairment of tangible and intangible assets excluding goodwill
At each balance sheet date, the Group reviews the carrying amounts of its
tangible and intangible assets to determine whether there is any indication that
those assets have suffered an impairment loss. If any such indication exists,
the recoverable amount of the asset is estimated in order to determine the
extent of the impairment loss (if any). Where the asset does not generate cash
flows that are independent from other assets, the Group estimates the
recoverable amount of the cash-generating unit to which the asset belongs. An
intangible asset with an indefinite useful life is tested for impairment
annually and whenever there is an indication that the asset may be impaired.
Recoverable amount is the higher of fair values less costs to sell and value in
use. In assessing value in use, the estimated future cash flows are discounted
to their present value using a pre-tax discount rate that reflects current
market assessments of the time value of money and the risks specific to the
asset for which the estimate of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to
be less than its carrying amount, the carrying amount of the asset
(cash-generating unit) is reduced to its recoverable amount. An impairment loss
is recognised as an expense immediately, unless the relevant asset is carried at
a revalued amount, in which case the impairment loss is treated as a revaluation
decrease.
Where an impairment loss subsequently reverses, the carrying amount of the asset
(cash-generating unit) is increased to the revised estimate of its recoverable
amount, but so that the increased carrying amount does not exceed the carrying
amount that would have been determined had no impairment loss been recognised
for the asset (cash-generating unit) in prior years. A reversal of an
impairment loss is recognised as income immediately, unless the relevant asset
is carried at a revalued amount, in which case the reversal of the impairment
loss is treated as a revaluation increase.
Property, plant and equipment
Property, plant and equipment are stated at cost less accumulated depreciation
and any recognised impairment loss.
Depreciation is charged so as to write off the cost or valuation of assets over
their estimated useful lives on the following bases:
Plant and machinery equipment,
fixtures and fittings 25% per annum
on reducing balance
Leasehold property Straightline over
10 years
The gain or loss arising on the disposal or retirement of an asset is determined
as the difference between the sales proceeds and the carrying amount of the
asset and is recognised in income.
Leases
Rentals under operating leases are charged against profit as incurred.
Foreign currencies
Assets and liabilities in foreign currencies are translated into sterling at the
rates of exchange ruling at the balance sheet date. Transactions in foreign
currencies are translated into sterling at the rate of exchange ruling at the
date of transaction. Exchange differences are taken into account in arriving at
the operating result.
Share based payments
The only share based payments of the group are equity settled share options. An
option pricing model is used to estimate the fair value of each option at grant
date. That fair value is charged on a straight line basis as an expense in the
income statement over the period that the employee becomes unconditionally
entitled to the options (vesting period), with a corresponding increase in
equity.
The number of such options is increased annually to reflect best estimates of
those expecting to vest (ignoring purely market based conditions) with
consequent changes to the expense. Equity is also increased by the proceeds
receivable as and when employees choose to exercise their options.
If the group modifies the terms and conditions on which the equity instruments
were granted, as a minimum, the services received measured at the grant date
fair value of the equity instruments granted (unless those equity instruments do
not vest because of a failure to satisfy a vesting condition other than a market
condition) are charged to the income statement.
Inventories
Inventories are stated at the lower of cost and net realisable value. Cost
comprises direct materials. Cost is calculated using the first in first out
(FIFO) basis. Net realisable value represents the estimated selling price less
all estimated costs to be incurred in marketing and selling.
Trade receivables
Trade receivables do not carry any interest and are stated at their nominal
value as reduced by appropriate allowances for estimated irrecoverable amounts.
Trade payables
Trade payables are not interest-bearing and are stated at their nominal value.
3 Dividends
The Company will not be declaring an interim dividend.
4 loss per share
The calculation is based on the loss attributable to ordinary shareholders
divided by the weighted average number of ordinary shares in issue during the
period as follows:
6 months 6 months 12 months
ended 31 ended 31 ended 30
October 2007 October 2006 April
2007
Numerators; earnings attributable to equity (547,893) (426,868) (882,700)
----------------------------------------
Denominators; weighted average number of equity shares
Basic and Diluted 491,928,631 411,515,588 443,451,919
----------------------------------------
5 CASH USED IN OPERATIONS
6 months 6 months 12 months
ended 31 ended 31 ended 30
October 2007 October 2006 April
2007
Results from operating activities (621,874) (468,171) (963,513)
Depreciation of property, plant and equipment 18,232 7,380 26,406
Amortisation of intangible assets 2,656 2,656 5,312
Decrease in inventories - 480 1,308
Decrease/(increase) in receivables (21,036) 21,820 5,611
Increase/(decrease) in payables 18,170 (20,293) (4,874)
-----------------------------------------
Cash flows generated from operations (603,852) (456,128) (929,750)
=========================================
6. EXPLANATION OF TRANSITION TO IFRS
The Group has applied IFRS 1 "First Time Adoption of International Financial
Reporting Standards" as a starting point for reporting under IFRS. The Group's
date of transition is 1 May 2006 and comparative information has been restated
to reflect in the Group's adoption of IFRS except where otherwise required or
permitted by IFRS 1.
IFRS 1 requires an entity to comply with each IFRS and IAS effective at the
reporting date for its first financial statements prepared under IFRS. As a
general rule, IFRS 1 requires such standards to be applied retrospectively.
However, the standard allows several optional exemptions from full retrospective
application.
The Group has elected to take advantage of the following exemption. Business
combinations made prior to 1 May 2006 will not be accounted for under IFRS 3 "
Business Combinations" and as such the value of goodwill in the balance sheet at
that date will be the same amount under IFRS as that recorded in the UK GAAP
financial statements, subject to the completion of an annual impairment review
The reconciliations of equity at 1 May 2006 (date of transition to IFRS) and at
30 April 2007 (date of last UK GAAP financial statements) and the reconciliation
of (loss) for 2006 and 2007, as required by IFRS 1, are set out below. The
reconciliation of equity at 31 October 2006 and the reconciliation of (loss) for
the six months ended 31 October 2007 are also included below to enable a
comparison of the 2007 published interim figures with those published in the
corresponding period of the previous financial year.
RECONCILIATION OF (LOSS) FROM UK GAAP TO IFRS
6 months 6 months 12 months
ended 31 ended 31 ended 30
October 2007 October 2006 April
2007
� � �
UK GAAP loss for the financial period (555,263) (434,238) (897,040)
Amortisation of goodwill 7,370 7,370 14,740
---------------------------------------------
Loss from continuing operations - IFRS (547,893) (426,868) (882,700)
---------------------------------------------
RECONCILIATION OF NET ASSETS FROM UK GAAP TO IFRS
31 October 31 October 30 April
2007 2006 2007
� � �
Net assets per UK GAAP 1,120,123 1,562,588 1,675,385
Amortisation of goodwill 22,110 7,370 14,740
---------------------------------------------
Net assets - IFRS 1,142,233 1,569,958 1,690,125
---------------------------------------------
Goodwill
International Financial Reporting Standards require goodwill to be frozen as at
the date of transition to IFRS, 1 May 2006, and to be subject to review for
impairment rather than regular amortisation. Previously amortised amounts in
the UK GAAP accounts for the period ended 31 October 2006 and the year ended 30
April 2007 of �7,370 and �14,740 respectively have been reversed in the IFRS
income statement. The effect of the transition on the balance sheet is shown
above.
This report is available on the company's website at www.henderson-morley.com.
Copies are available upon request from the Company's registered office at
Metropolitan House, 2 Salisbury Road, Moseley, Birmingham, West Midlands B13
8JS.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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Henderson Mrly. (LSE:HML)
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Henderson Mrly. (LSE:HML)
過去 株価チャート
から 7 2023 まで 7 2024
