Reliance GeneMedix plc Announcements

RNS Number : 0214D GeneMedix PLC 09 September 2008  
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FOR IMMEDIATE RELEASE                                                                                                    9 September 2008
GeneMedix plc
Results for the 12 month period ended 31st March 2008

GeneMedix plc ("GeneMedix" or the "Company"), the AIM listed biopharmaceutical company, which is part of the Reliance Life Sciences Group ("RLS"), announces its results for the year ended 31st March 2008.

Highlights

Approval for conducting clinical trials for Epostim in the EU
Receipt of Epostim commercial manufacturing licence for the facility at Tullamore, Ireland
Consolidation of all the Company's operations at Tullamore
Integration of programmes with RLS in India
Vinay Ranade, Chief Executive Officer of GeneMedix plc, commented
“GeneMedix has progressed its Epostim development programme very well indeed, and is focused on introducing biosimilars into the EU market. With support from Reliance Life Sciences, the Company is making rapid strides towards its goal of developing and manufacturing high quality therapeutics.”
 
 
ENQUIRIES:
GeneMedix plc                                                Tel: +353 57 932 3572
Vinay Ranade, Chief Executive Officer

Deloitte Corporate Finance                           Tel: 020 7936 3000
Jonathan Hinton, John Ball
Lothbury Financial Limited                            Tel: 020 7367 8888
Michael Padley

  Chief Executive Officer's statement

Background
GeneMedix is a globally focused biopharmaceutical company, specialising in the development and manufacture of high quality, cost-effective treatments for some of the world’s most serious diseases. Since February 2007, the Company has been part of the Reliance Life Sciences Group of companies. The Company is currently developing a portfolio of recombinant therapeutic proteins. Its current focus is on developing and marketing biosimilars in global markets.
 
Business overview
I am pleased to present the results for the past financial year, during which the Company has achieved considerable progress in its development programme for Erythropoietin (EPO). The Company continues to obtain positive results at each stage of the development programme and is producing a high quality product at its facility in Tullamore, Ireland. During the year, the Company received a commercial manufacturing licence for EPO and approval to conduct clinical trials in the EU, which are progressing according to plan. GeneMedix has also finalised its strategy for the Granulocyte Colony Stimulating Factor (G-CSF) programme, with a view to manufacturing clinical lots and initiating clinical development in the EU in the coming year.  G-CSF would be our second biosimilar product.

This period has been dominated by an intensive and well-structured integration programme, whereby the Company's operations were consolidated at Tullamore and various programmes have been initiated to maximise the benefits of the relationship with the parent organisation, Reliance Life Sciences Private Limited and its affiliates. It is the view of the Directors that the Company will benefit immensely from this programme and advance at a faster pace towards its objective of bringing a portfolio of biosimilar products to the EU market.  With the closure of the Newmarket office and consolidation of all operations at Tullamore, the senior management of the Company has been able to direct all its efforts towards product development, clinical development and manufacturing programmes.
 
Financial review
Operating losses of £5.5 million for the year are in line with GeneMedix's budgets and reflect planned expenditure.  The Company exercised a strict control on expenditure during the year and will continue to focus on achieving commercial efficacy in the medium term.  There were no revenues during the year.

The Company has capitalised development expenditure of £2.14 million incurred on the EPO development programme, post-receipt of clinical trial approval in September 2007.  The level of current assets and liabilities is in line with the activities of the Company.

The entire expenditure during the year was financed through the equity investment from Reliance Life Sciences, received at the end of last year.  GeneMedix will have sufficient cash based on current projections for a minimum of twelve months, through continuing investment from Reliance Life Sciences via the exercise of warrants.  The total warrant amount of £17.5 million is exercisable at any time in the five years from the date of initial allotment.  It is envisaged that this investment would be sufficient to finance the Company's current programmes and at least one additional product through to launch in the European market.

Board changes
A significant number of changes to the Board occurred during the year. Amongst these was my appointment as Chief Executive Officer and that of Dr. R. A. Mashelkar as Non-Executive Chairman.  Dr. Mashelkar, aged 64, is an eminent scientist with an outstanding academic record and has held a number of high profile positions in the field of science and technology.  Dr. Mashelkar has already started making significant contributions towards the company's strategy and future plans.

Employee commitment
I would like to thank the staff of GeneMedix for their hard work and commitment.  Their competence and efforts have helped the Company achieve major milestones in the current year. We look forward to their continued support in the future.  The Board is committed to implementing programmes for the training and rewarding the Company's employees.
 
Corporate governance

The AIM Rules do not compel the Company to comply with the Combined Code (the Code), a set of recommended corporate governance principles for UK public companies issued by the Financial Reporting Council. However, the Directors support high standards of Corporate Governance and have established a set of corporate governance principles which they regard as appropriate for the stage of development of the Company.

Amongst other measures, the Board has established an Audit Committee, Remuneration Committee and Nominations Committee with formally delegated duties and responsibilities. 

The Audit Committee consists of all the independent Non-Executive Directors and is chaired by Mr. Rajendra Lodha.  The Audit Committee normally meets twice a year and has responsibility for, among other things, planning and reviewing the annual report and accounts and interim statements and involving, where appropriate, the auditors.  The Audit Committee also approves auditors' fees, reviews auditor independence and focuses on compliance with legal requirements and accounting standards.  It is also responsible for ensuring that an effective system of internal controls is maintained.  The ultimate responsibility for reviewing and approving the annual accounts and interim statements remains with the Board.

The Remuneration Committee is made up of all independent Non-Executive Directors and is chaired by Dr. R. A. Mashelkar.  The Remuneration Committee, which meets as required, but at least once a year, has responsibility for making recommendations to the Board on the compensation of senior executives and determining, within agreed terms of reference, the specific remuneration packages for each of the Executive Directors.

The Nominations Committee comprises the Chairman and all of the independent Non-Executive Directors and is chaired by Dr. R. A. Mashelkar.  The Nominations Committee has responsibility for reviewing the size and composition of the Board and the appointment of replacement and or additional directors and making appropriate recommendations to the Board.

 
Vinay Ranade
Chief Executive Officer
  
 
Consolidated Income Statement
For the year ended 31 March 2008
  Year
 ended 
31 Mar 2008
  16 months
 ended 
31 Mar 2007

£'000
£'000
Continuing operations
Research and development costs
(2,302)
(3,419)
Administrative expenses
(3,202)
(4,079)
Operating loss
(5,504)
(7,498)
Finance income
330
87
Finance costs
(109)
(384)
Other income
47
2,283
Loss before taxation
(5,236)
(5,512)
Taxation
-
345
Loss after taxation from continuing operations
(5,236)
(5,167)
Discontinued operations
Loss from discontinued operations
-
(399)
Loss for the year/period
(5,236)
(5,566)
Attributable to:
Equity holders of the parent
(5,236)
(5,488)
Minority interest
-
(78)

(5,236)
(5,566)
Loss per share for loss attributable to the equity holders of the parent
From continuing and discontinued operations - basic and diluted
(3.4p)
(11.5p)
From continuing operations - basic and diluted
(3.4p)
(10.8p)
From discontinued operations - basic and diluted
-
(0.7p)

Consolidated Balance Sheet
As at 31 March 2008

 31 Mar 2008
 31 Mar 2007
£'000
£'000
ASSETS
Non-current assets
Intangible fixed assets
2,159
72
Property, plant and equipment
2,850
3,229
Investment
7
-

5,016
3,301
Current assets
Inventories
384
130
Other receivables
998
1,669
Restricted cash
162
125
Cash and cash equivalents
2,632
9,156

4,176
11,080
LIABILITIES
Current liabilities
Trade and other payables
(1,678)
(1,637)
Borrowings
(1,059)
(150)

(2,737)
(1,787)
Net current assets
1,439
9,293
Total assets less current liabilities
6,455
12,594
Non-current liabilities
Borrowings
-
(950)
Net assets
6,455
11,644
Shareholders' equity
Share capital
15,572
15,572
Share premium
27,602
27,602
Other reserves
3,268
3,226
Retained losses
(39,987)
(34,756)
Total shareholders' equity
6,455
11,644

  Company Balance Sheet
As at 31 March 2008
 31 Mar 2008
 31 Mar 2007

£'000
£'000
ASSETS
Non-current assets
Intangible fixed assets
2,159
72
Property, plant and equipment
2,850
3,229
Investment
7
-

5,016
3,301
Current assets
Inventories
384
130
Other receivables
998
1,669
Restricted cash
162
125
Cash and cash equivalent
2,632
9,156

4,176
11,080
LIABILITIES
Current liabilities
Trade and other payables
(1,678)
(1,637)
Borrowings
(1,059)
(150)

(2,737)
(1,787)
Net current assets
1,439
9,293
Total assets less current liabilities
6,455
12,594
Non-current liabilities
Borrowings
-
(950)
Net assets
6,455
11,644
Shareholders' equity
Share capital
15,572
15,572
Share premium
27,602
27,602
Other reserves
3,268
3,226
Retained losses
(39,987)
(34,756)
Total shareholders' equity
6,455
11,644

  Consolidated statement of recognised income and expense
For the year ended 31 March 2008

Year 
ended 
31 Mar 2008
16 months ended 
31 Mar 2007

£'000
£'000
Loss for the year/period
(5,236)
(5,566)
Currency translation difference
42
22
Gain on early extinguishment of equity element of debenture loan notes
-
425
Total recognised expenses for the year/period
(5,194)
(5,119)
Attributable to:
Equity holders of the parent
(5,194)
(5,046)
Minority interests
-
(73)
   
(5,194)
(5,119)

 
 
Company statement of recognised income and expense
For the year ended 31 March 2008

Year 
ended 
31 Mar 2008
16 months ended 
31 Mar 2007

£'000
£'000
Loss for the year/period
(5,236)
(6,218)
Currency translation difference
42
-
Gain on early extinguishment of equity element of debenture loan notes
-
425
Total recognised expenses for the year/period
(5,194)
(5,793)
Attributable to:
Equity holders of the parent
(5,194)
(5,793)
Minority interests
-
-
   
(5,194)
(5,793)

  Consolidated cash flow statement
For the year ended 31 March 2008

Year
ended
31 Mar 2008
16 months ended 
31 Mar 2007

£'000
£'000
Cash flows from operating activities
Continuing operations
(5,203)
(5,305)
Discontinued operations
-
34
Net cash flows used in operating activities
(5,203)
(5,271)
Cash flows from investing activities:
Payments for plant and equipment
(286)
(83)
Payments for intangible assets
(2,138)
-
Interest received
364
27
Proceeds from disposal of subsidiary
778
671
Increase in restricted cash
(36)
(2)
Acquisition of subsidiary
(7)
-
Discontinued operations
-
25
Net cash flows (used in)/generated from investing activities
(1,325)
638
Cash flows from financing activities:
Proceeds from issue of ordinary share capital
-
14,760
Issue of convertible unsecured loan stock
-
-
Repayment of convertible loan notes
-
(1,221)
Repayments of borrowings
-
(150)
Repayment of finance leases
-
(782)
Discontinued operations
-
(104)
Cash flows generated from financing activities
-
12,503

Net (decrease)/increase in cash and cash equivalents
(6,528)
7,870
Cash and cash equivalents at the beginning of year/period
9,156
1,298
Effect of foreign currency translation
4
(12)
Cash and cash equivalents
2,632
9,156

  Company cash flow statement
For the year ended 31 March 2008

Year
ended
31 Mar 2008
16 months ended 
31 Mar 2007

£'000
£'000
Cash flows from operating activities
Net cash flows used in operating activities
(5,203)
(5,305)
Cash flows from investing activities:
Payments for plant and equipment
(286)
(83)
Payments for intangible assets
(2,138)
-
Interest received
364
27
Proceeds from disposal of subsidiary
778
671
Increase in restricted cash
(36)
(2)
Acquisition of subsidiary
(7)
-
Net cash flows (used in)/generated from investing activities
(1,325)
613
Cash flows from financing activities:
Proceeds from issue of ordinary share capital
-
14,760
Issue of convertible unsecured loan stock
-
-
Repayment of convertible loan notes
-
(1,221)
Repayments of borrowings
-
(150)
Repayment of finance leases
-
(782)
Cash flows generated from financing activities
-
12,607

Net (decrease)/increase in cash and cash equivalents
(6,528)
7,915
Cash and cash equivalents at the beginning of year/period
9,156
1,248
Effect of foreign currency translation
4
(7)
Cash and cash equivalents
2,632
9,156
The Company announces that it has posted to shareholders a letter informing them about the Annual General Meeting. AGM Notice and Form of Proxy are available on the Company's website at : www.genemedix.com.  In accordance with AIM Rule 26 the Annual Report and accounts are available on the Company's website at : www.genemedix.com

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