RNS Number : 5358I
Protherics PLC
20 November 2008
PROTHERICS ANNOUNCES INTERIM RESULTS
FOR SIX MONTHS ENDED 30 SEPTEMBER 2008
Strong revenue growth and significant pipeline development
Recommended all share offer from BTG plc
London, UK, Brentwood, TN, 20 November 2008 - Protherics PLC ("Protherics" or the "Company"), the biopharmaceutical company focused on
critical care and cancer, today announces its unaudited interim results for the six months ended 30 September 2008.
Proposed Merger with BTG plc
* Recommended all share offer from BTG plc to create one of the UK's leading specialty biopharmaceutical companies:
- Protherics shareholders offered 0.291 BTG shares for each Protherics share
and on completion will own approximately 40.8% of the enlarged company
- Approved by both Protherics and BTG shareholders at respective EGMs
- Merger completion expected on 4 December 2008 following Court approval
Financial Highlights
* Revenues increased by 16% to �17.2m (2007: �14.8m) with underlying revenue growth of 10%, bolstered by the stronger US dollar
* Gross profit up 13% to �9.3m (2007: �8.2m) with gross margins of 54.2% (2007: 55.4%)
* R&D expenditure increased, as planned, by 13% to �9.7m (2007: �8.6m) following initiation of several new clinical studies
* G&A expenses decreased significantly by 23% to �5.1m (2007: �6.7m) due to favourable foreign exchange movements
* Loss before tax reduced to �5.0m (2007: �6.1m)
* Net cash decrease of �9.6m (2007: increase of �6.9m) in line with expectations, providing a cash position of �28.1m (2007:
�46.9m)
* Cost reduction programme recently initiated at the manufacturing sites in Wales and Australia
Operational Highlights
* Voraxaze*:
- Protherics today announced the start of the submission of a rolling Biologics
License Application (BLA) with the Food and Drug Administration (FDA) to seek
marketing approval in the US (see separate release)
- Continued revenue growth from European Named Patient sales and supply under
a Treatment Protocol with cost recovery in the US
* Angiotensin Therapeutic Vaccine:
- Start of a phase 2a clinical study in June 2008 in hypertension with a formulation
which incorporates Protherics' promising new vaccine adjuvant, CoVaccine HT*
* Prolarix*:
- Start of a phase 2a proof-of-concept study in primary liver cancer in August 2008
Commenting on the results, Stuart Wallis, Chairman, said:
"Protherics delivered solid financial results in the first half of the year, with a healthy increase in revenues and gross profits. We
continued to make good progress in developing our product pipeline and announced today the start of the submission of a marketing
application for Voraxaze in the US. We believe that the proposed merger with BTG, which recently won shareholder approval, will create a new
flagship specialty biopharmaceutical company in the UK with the required financial strength and product portfolio to deliver enhanced value
to shareholders."
| Ends |
For further information contact:
Protherics PLC +44 (0) 20 7246 9950
+44 (0) 7919 480510
Andrew Heath, CEO
Rolf Soderstrom, Finance Director
Nick Staples, Corporate Affairs
Protherics Inc +1 615 327 1027
Saul Komisar, President
Financial Dynamics
London: Ben Atwell / Lara Mott +44 (0) 20 7831 3113
New York: John Capodanno +1 212 850 5600
Notes for Editors:
About Protherics
Protherics (LSE: PTI, NASDAQ: PTIL) is a leading international biopharmaceutical company focused on specialist products for critical
care and cancer.
The Company has two critical care products, CroFab* and DigiFab*, approved for sale in the US. The Company has the opportunity to sell
these products in the US from October 2010 together with Voraxaze*, a supportive cancer care product, following anticipated marketing
approval in the US in 2010. Protherics is also developing a number of other specialist hospital products in the cancer arena.
In addition, Protherics has several potential blockbuster products that require development and commercialisation partners. These
include CytoFab* which has been partnered by AstraZeneca in a major licensing deal, and also Angiotensin Therapeutic Vaccine and,
potentially Digoxin Immune Fab, for which licensing partners will be sought in 2009.
For further information visit www.protherics.com.
Disclaimer
This document contains forward-looking statements that involve risks and uncertainties including with respect to products under
development and the progress and completion of clinical trials. Although we believe that the expectations reflected in such forward-looking
statements are reasonable at this time, we can give no assurance that such expectations will prove to be correct. Given these uncertainties,
readers are cautioned not to place undue reliance on such forward-looking statements. Actual results could differ materially from those
anticipated in these forward-looking statements due to many important factors discussed in Protherics' Annual Report on Form 20-F and other
reports filed from time to time with the U.S. Securities and Exchange Commission. We do not undertake to update any oral or written
forward-looking statements that may be made by, or on behalf of, Protherics.
INTERIM STATEMENT
Corporate Overview
Protherics announced on 18 September 2008 a proposed merger with BTG through a recommended all share offer by BTG for the entire issued
and to be issued share capital of Protherics. The Independent Directors of Protherics believe that the merger represents an excellent
opportunity to create a sustainably profitable specialty biopharmaceutical company. The Board and management recognise that the merger of
these two strong companies will create a flagship specialty pharmaceutical company in the UK with the financial capability, product
portfolio and depth of pipeline to be a truly competitive player in a global industry.
Protherics shareholders will receive 0.291 BTG shares in exchange for each Protherics share. As a result, Protherics Shareholders will
own, on completion, approximately 40.8 per cent. of the enlarged issued ordinary share capital of BTG, giving Protherics' shareholders an
exciting opportunity to benefit from the enhanced growth potential of the enlarged company. While there has been significant uncertainty in
the macroeconomic environment and consequent share price volatility in the UK stock market, we are delighted that Protherics shareholders
voted in favour of the merger at the two shareholder meetings held on 11 November 2008. Subject to Court approval the transaction will
complete on the 4 December.
Protherics has delivered strong financial results during the first half of the current financial year. The performance of the marketed
critical care products, CroFab* and DigiFab*, over the six month period has been pleasing with solid revenue growth reported. Investment in
R&D increased as planned and substantial progress was made over the period. This included the commencement of phase 2 clinical studies for
Angiotensin Therapeutic Vaccine in hypertension and Prolarix* for primary liver cancer. Significant work has also been undertaken to support
our Voraxaze* regulatory package and we announced today the start of the submission of a rolling Biologics License Application (BLA) with
the Food and Drug Administration (FDA) to seek marketing approval in the US.
Protherics recently initiated a cost reduction programme at its manufacturing sites in Wales and Australia, which is expected to result
in approximately 30 redundancies. Further cost reductions are anticipated across the rest of the Company's operations, once the merger with
BTG is complete.
R & D pipeline update: programmes partnered or to be out-licensed
CytoFab* - for sepsis resulting from uncontrolled infection
CytoFab is an anti-TNF-alpha polyclonal antibody fragment (Fab) for the treatment of severe sepsis, licensed to AstraZeneca in December
2005. It is estimated that as many as 3 million patients suffer from sepsis globally each year, with a mortality rate in excess of 30%.
Treatment options for patients are currently very limited, and with few products in late stage development, there is a major unmet need.
Protherics previously demonstrated encouraging data for CytoFab in a phase 2b study. Following changes made by Protherics to the
manufacturing process, AstraZeneca is undertaking an additional two-part phase 2 programme. Results from the first study, designed to assess
safety, tolerability, pharmacokinetics and pharmacodynamics, are now expected in mid 2009. With encouraging data, AstraZeneca intends to
start a second study as soon as possible to assess both the safety and the efficacy of CytoFab in a larger patient group.
CytoFab revenues of �1.1 million were recognised in the six months ended 30 September 2008 compared to �1.1 million in the corresponding
six months period to 30 September 2007.
Angiotensin Therapeutic Vaccine - management of high blood pressure
Angiotensin Therapeutic Vaccine (ATV) has been developed as a potential vaccine therapy for hypertension, more commonly known as high
blood pressure. The global market for anti-hypertensive therapies is estimated to be worth around US$30 billion and Protherics believes that
a vaccine approach would overcome the considerable problem of patient compliance which exists with current oral therapies.
A new formulation of ATV, incorporating the Company's proprietary CoVaccine HT adjuvant, is currently being tested in a phase 2a,
double-blind, placebo-controlled clinical study in 124 patients with mild to moderate hypertension. The first 12 patients have been dosed
successfully and recruitment of the remaining patients into the study will now commence following a positive safety review by the Data
Monitoring Committee. Protherics hopes that this study will confirm that the new formulation increases levels of anti-angiotensin antibodies
in hypertensive patients and that this results in a reduction in blood pressure. Blood pressure results are expected in the first half of
2009.
Digoxin Immune Fab (DIF) - treatment of pre-eclampsia
Pre-eclampsia is a life-threatening disorder which occurs in 5-8% of the pregnancies in the US and typically requires the early
delivery of the baby to prevent the death of the mother. In April 2008 Protherics announced that its placebo-controlled phase 2b Digoxin
Immune Fab (DIF; Digibind�, GSK) Efficacy Evaluation in Pre-eclampsia ("DEEP") study met one of its two primary endpoints and exhibited a
favourable safety profile. The results showed that DIF preserved maternal renal function, the first time a drug had shown a clinically
significant benefit in the function of a target organ in patients with severe pre-eclampsia. While there was no significant difference seen
in this study for the other primary endpoint, the use of antihypertensive drugs, new analyses have revealed potential benefits to the
neonate. Protherics continues to assess out licensing opportunities.
R & D pipeline update: specialist hospital products being developed in-house
Voraxaze* - for the control of high dose methotrexate therapy in cancer
Voraxaze contains an enzyme that breaks down methotrexate. High dose methotrexate is used to treat certain types of cancer. Patients are
considered at risk of methotrexate toxicity if they have impaired renal function, which can lead to a delay in methotrexate elimination, or
have evidence of delayed elimination based on methotrexate levels.
Voraxaze is an investigational new drug which is currently available in the US under a Treatment Protocol for patients receiving high
dose methotrexate (*1g/m2) who are experiencing, or at risk of, methotrexate toxicity. Voraxaze is also available in Europe and elsewhere
outside the US on a Named Patient basis.
Voraxaze has been granted Fast Track designation by the Food and Drug Administration (FDA) for intervention use, enabling the submission
of the Biologics License Application (BLA) application in the US in sections on a rolling basis, rather than all components simultaneously.
Protherics today announces that it has submitted the first sections of the BLA for Voraxaze with the FDA in the US. The final part of the
application is due to be submitted in Q4 2009, enabling a potential approval in the US in 2010 assuming the FDA awards a Priority Review.
Protherics estimates that the global market opportunity for Voraxaze in intervention use is approximately US$25-50 million per annum.
In Europe, revenues for the six months ended 30 September 2008 amounted to �0.9 million (�0.8 million in H1 2007), while US revenues
from the recovery of costs authorised by FDA for use of Voraxaze under the Treatment Protocol were �0.6 million (�0.4 million in H1 2007).
OncoGel* - loco-regional control of solid tumours
OncoGel is a novel, locally-administered, sustained-release formulation of paclitaxel, an established chemotherapeutic agent for the
treatment of solid tumours. In January 2008 we initiated a multinational randomized phase 2b study to evaluate OncoGel administered in
combination with pre-operative chemoradiotherapy versus pre-operative chemoradiotherapy alone in 124 patients with oesophageal cancer.
Preliminary results from the study are expected in 2010.
In March 2008 we initiated a phase 1/2 study of OncoGel in primary brain cancer and, as reported, the Data Safety Monitoring Board
recommended continuing the study with a modified protocol. The modified protocol has been agreed with the FDA and further recruitment into
the study is continuing. Recruitment of patients into the next dose cohort is expected to be completed in the first half of 2009.
Prolarix* - targeted therapy for liver cancer and certain other solid tumours
Prolarix is a targeted prodrug-based chemotherapy in development for the treatment of primary liver cancer (hepatocellular carcinoma,
HCC) and with the potential to treat certain other solid tumours. A proof-of-concept phase 2a study of Prolarix was initiated in August 2008
to evaluate tumour response, in addition to safety and tolerability, in 14 patients with non-resectable HCC who have not been treated with
sorafenib (Nexavar�, Bayer/Onyx). Results are expected in the first half of 2010.
Acadra* (acadesine) - selective therapy for B-cell Chronic Lymphocytic Leukemia (B-CLL)
Acadra is a potentially selective treatment for B-CLL which has been shown to cause the death of B-cells whilst sparing T-cells in blood
samples from patients with B-CLL. Protherics and its co-development partner, Advancell, initiated a phase 1/2 study with Acadra in patients
with recurrent or refractory B-CLL in late 2007. Part I of the study is expected to be completed during 2009, with the intention of
providing initial evidence of an effect, with the final study results expected in 2010.
Marketed Products, Business Environment and Financial Update
CroFab* - Crotalid (rattlesnake) anti-venom
CroFab (Crotalidae Polyvalent Immune Fab (Ovine)) is a polyclonal antibody fragment (Fab) used to treat mild or moderate envenomation
from Crotalid snakes, which include rattlesnakes, found in the US. CroFab sales were �10.9 million in the half year compared to �10.3
million in the corresponding six months to 30 September 2007. Underlying trading in US dollar was marginally down on prior year however this
was offset by the strengthening of the US dollar.
DigiFab* - a digoxin antidote
DigiFab (Digoxin Immune Fab (Ovine)) is an antidote approved in the US to treat patients with life-threatening digoxin toxicity or
overdose. DigiFab revenues were �3.0 million for the period, compared to �1.7 million for the corresponding period in 2007, due to a
combination of increased shipments of product to our distributor, Nycomed, and a strengthening US dollar. This was marginally offset by
reduction of royalty income generated by Nycomed sales to the wholesale market.
Protherics has submitted responses to all the outstanding issues raised by the MHRA during its assessment of the Marketing Authorisation
Application (MAA) for DigiFab in the UK, and expects to hear the outcome of the assessment in early 2009.
ViperaTAb* - European viper antivenom
ViperaTAb sales at �0.2 million were in line with sales made in the prior year (2007: �0.2 million).
Impact of US $ exchange rate
The underlying sales performance of the Company's US derived revenues increased by 9% year on year to US$26.6 million (2007: US$24.5
million). The strengthening of the US dollar to the pound resulted in a more favourable average exchange rate of US$1.89 (2007: US$2.01),
such that US derived revenues increased by 16% to �14.1 million (2007: �12.2 million).
Half year to 30 September 2008 2008 2007 2007
(IFRS) US$m �m US$m �m
CroFab 20.4 10.9 20.7 10.3
DigiFab 5.7 3.0 3.5 1.7
ViperaTAb 0.5 0.2 0.3 0.2
Total 26.6 14.1 24.5 12.2
Average exchange rate ($/�) 1.89 2.01
Voraxaze*, CytoFab* and Other Revenues
Half year to 30 September 2008 2007
(IFRS) �m �m
Voraxaze 1.5 1.2
CytoFab 1.1 1.1
Other 0.5 0.3
3.1 2.6
US Derived 14.1 12.2
Total Revenues 17.2 14.8
Voraxaze revenues increased by 19% over the prior year period due to increases in both its supply under a Treatment Protocol with cost
recovery in the US and Named Patient sales outside of the US. CytoFab revenues of �1.1 million for the six months represent a portion of the
initial upfront payment of �16.3 million received under the licensing agreement with AstraZeneca, which is being recognised under IFRS over
the estimated period through to product approval.
Cost of Sales and Gross Profit
Cost of sales for the six month period was �7.8 million compared to �6.6 million in the corresponding period. Gross margins on
manufactured products (excluding milestone and royalty revenues with no associated manufacturing cost) showed a slight decrease over the
period as shown in the table below:
Half year to 30 September 2008 2007
(IFRS) �m �m
Revenues* 15.6 13.6
Cost of Sales (7.8) (6.6)
Gross Profit 7.8 7.0
Gross Margin (on manufactured products) 50.0% 51.5%
*Revenues include sales of CroFab, DigiFab, ViperaTAb and Voraxaze
*.Despite an increase in Gross Profits, Gross margin has reduced slightly following a change in revenue mix between products and the
balance of shipments and royalty revenues.
Research and Development
As planned, R&D expenditure increased to �9.7 million in the half year, from �8.6 million in the prior year, as the Company continued to
progress its development pipeline. Significant effort has continued to support Voraxaze marketing submission in the US. In addition, we
continue the investment in OncoGel, Prolarix, CoVaccine HT and Angiotensin Therapeutic Vaccine to support the ongoing phase 2 studies.
General and Administrative Expenses
General and administrative expenses have decreased significantly to �5.1 million from �6.7 million after currency effects and lower
charges on employee options. Movements in the fair value of currency contracts and gains on inter-group balances and hedging activity have
produced a gain of �1.8m compared to a loss of �0.4 million in 2007. Underlying general and administrative expenses have increased in line
with expectations.
Finance Income and Costs
Finance income has decreased to �0.7 million from �1.3 million in line with the decreased cash balances and reduced interest rates.
Finance costs have remained stable at �0.2 million.
Results Before and After Tax
The Company has an overall tax credit of �0.2 million on a loss of �5.0 million. This credit consists of a �0.1 million UK R&D tax
credit and a �0.1 million deferred tax credit.
Balance Sheet
Non current assets of �46.0 million increased from �42.2 million at 31 March 2008 reflecting a milestone payment of $5 million (�2.5
million) which was payable to Glenveigh Pharmaceuticals LLP in accordance with its license agreement, which has increased intangible assets.
The increase from �40.8 million at 30 September 2007 to �42.2 million arose as a result of additions to plant, property and equipment.
Current assets at 30 September 2008 were �46.0 million, which shows a decrease from �52.6 million at 31 March 2008. The decrease
compared to the prior period is primarily due to a reduced cash balance (down from �37.7 million at 31 March 2008 to �28.1 million at 30
September 2008) following the anticipated investment in research and development expenditure and an increase in working capital, largely a
result of increased shipments in September for which payments have subsequently been collected.
The Company's total liabilities increased from �33.3 million at 31 March 2008 to �36.3 million at 30 September 2008 and compare to �31.6
million in the prior year period. Non current liabilities decreased to �11.8 million at 30 September 2008 from �12.5m at 31 March 2008 as
deferred income relating to CytoFab is taken to the income statement. Current liabilities increased to �24.5 million at 30 September 2008
from �20.8 million at 31 March 2008 as trade and other payables increased following increased down payments from Nycomed and increased
research and development spend.
Cash Flow
Net cash outflows from operations were �9.1 million in the six month period, compared to an inflow of �8.0 million in the corresponding
half year. This is due to reduced trading losses and receipt in the corresponding period last year of a �10.0 million AstraZeneca milestone.
Cash and cash equivalents at the end of the period were �28.1 million, down from �37.7 million at 31 March 2008 and �46.9 million 30
September 2007. The decrease follows investment in research and development in the year and significant amounts of cash being included in
trade receivables at the period end, which have increased from �2.4 million at 31 March 2008 to �6.7 million at 30 September 2008.
Outlook
Protherics continues to perform in line with expectations, with increasing revenues from marketed products and a broad portfolio of late
stage products in development. Important results are expected in the next 6-12 months for a number of key value drivers. We expect blood
pressure results of the phase 2a trial of ATV in hypertension in the first half of 2009, along with the results from AstraZeneca's first
phase 2 study of CytoFab in severe sepsis by mid 2009.
The proposed merger with BTG comes at a time of unprecedented volatility in global financial markets. The combination of BTG and
Protherics aims to create a new UK flagship specialty biopharmaceutical company with strong fundamentals in terms of cash, revenues,
pipeline and experienced management. The recently received shareholder approvals for the Scheme of Arrangement, which were passed at
shareholder meetings on 11 November 2008, paves the way for final Court approval and for the merger to become effective on 4 December 2008.
Principle risks and uncertainties
R&D risk
There is always a risk that drugs under development will fail. Potential products may show unacceptable levels of toxicity or may not
prove effective in clinical trials, and regulators may not approve marketing applications if the data and the regulatory package are not
deemed adequate. In addition, it may not prove possible to attract a suitable out-licensing partner for some of Protherics' potentially
larger market opportunities, which generally need a higher level of investment in phase 3 clinical studies that Protherics may be able to
commit from our own resources.
Competitive environment
Some of Protherics' revenue streams have direct competitors (such as Digibind�, GSK's competitor to DigiFab). In other cases,
alternative technologies may be developed which could compete or prove superior to out other products or product candidates. Protherics also
faces competition for possible product acquisitions, in-licensing and out-licensing of marketed products and development programmes.
Intellectual property
Protherics may not be able to secure the necessary intellectual property rights in relation to products in development. Other companies
may have patents which limit Protherics' ability to exploit its R&D efforts and there are risks of challenge to Protherics' existing patent
portfolio.
Regulatory environment
The pharmaceutical industry is heavily regulated. New products will generally need several phases of preclinical and clinical studies
before marketing approval and may require approvals in several jurisdictions. It is often difficult to anticipate the requirements of the
various regulatory authorities, which can evolve with time, frequently making the approval process more costly and lengthier than initially
estimated, or even resulting in the abandonment of an application for approval. The manufacturing of pharmaceutical products is also closely
regulated, with frequent inspections from agencies. Failure to maintain the necessary approvals could result in an inability to supply the
market, with consequent loss of revenues.
Manufacturing risk
Protherics relies on certain third-party contractors for the supply of key materials and services, such as filling and freeze-drying the
end product. The filling and freeze-drying process in particular carries with it risks of failure and loss of product. Problems at
contractors' facilities may result in delays and disruptions in supplies. Some of these materials and services may be available from one
source only and regulatory requirements can make the substitution costly and time-consuming. Protherics' polyclonal antibody products rely
on serum produced from our sheep flocks in Australia, which could be subject to disease outbreaks. Protherics also relies on its single
site in Wales for supply of manufactured product, with the consequent possibilities for disruption in supplies.
Protherics PLC
CONDENSED CONSOLIDATED INCOME STATEMENT (UNAUDITED)
for the six months ended 30 September 2008
Six months Six months Year
ended 30 September ended 30 ended 31
2008 September March
2007 2008
Notes
�'000 �'000 �'000
Revenue 3 17,202 14,818 26,067
Cost of sales (7,875) (6,589) (12,463)
Gross profit 9,327 8,229 13,604
Administrative expenses
Research and development (9,742) (8,638) (19,138)
General and administrative (5,142) (6,695) (13,684)
Total administrative expenses (14,884) (15,333) (32,822)
Operating loss 3 (5,557) (7,104) (19,218)
Finance income 741 1,253 2,382
Finance costs (190) (213) (415)
Loss before tax (5,006) (6,064) (17,251)
Tax 5 213 (159) 509
Loss for the period, (4,793) (6,223) (16,742)
attributable to equity
shareholders
Pence Pence Pence
Loss per share
Basic and diluted 6 (1.4) (1.8) (4.9)
All revenue and results arose from continuing operations.
Protherics PLC
CONDENSED CONSOLIDATED STATEMENT OF RECOGNISED INCOME AND EXPENSE (UNAUDITED)
for the six months ended 30 September 2008
Six months ended 30 Six months ended 30 Year
September 2008 September 2007 ended 31
March
2008
�'000 �'000 �'000
Exchange differences on (1,618) 268 236
translation of foreign
operations
Net (expense) / income (1,618) 268 236
recognised directly in equity
Loss for the period (4,793) (6,223) (16,742)
Total recognised expense for (6,411) (5,955) (16,506)
the period
All recognised income and expense is attributable to equity shareholders.
Protherics PLC
CONDENSED CONSOLIDATED BALANCE SHEET (UNAUDITED)
at 30 September 2008
30 September 30 September 31 March
Notes 2008 2007 2008
�'000 �'000 �'000
Non-current assets
Goodwill 10,991 10,838 10,865
Other intangible assets 7 22,779 19,063 19,119
Property, plant and equipment 8 11,697 10,756 11,884
Deferred tax assets 465 104 345
45,932 40,761 42,213
Current assets
Inventories 9 9,123 9,697 10,205
Derivative instruments 94 31 -
Tax receivables 18 338 763
Trade and other receivables 10 8,678 5,088 3,975
Cash and cash equivalents 28,094 46,889 37,660
46,007 62,043 52,603
Total assets 91,939 102,804 94,816
Current liabilities
Trade and other payables 11 23,449 16,640 19,210
Current tax liabilities - 317 370
Obligations under finance 862 1,016 966
leases
Bank overdrafts, loans and 159 16 54
other borrowings
Derivative instruments - - 170
24,470 17,989 20,770
Non-current liabilities
Trade and other payables 8,191 9,541 8,670
Borrowings - 139 141
Convertible loan notes 1,935 2,091 1,971
Obligations under finance 1,695 1,853 1,712
leases
11,821 13,624 12,494
Total liabilities 36,291 31,613 33,264
Net assets 55,648 71,191 61,552
Equity
Share capital 12 6,849 6,787 6,806
Share premium account 137,628 136,026 136,292
Shares to be issued - 1,417 1,289
Merger reserve 51,163 51,163 51,163
Equity reserve 197 217 203
Cumulative translation reserve (824) 826 794
Retained earnings (139,365) (125,245) (134,995)
Total equity 55,648 71,191 61,552
Protherics PLC
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (UNAUDITED)
for the six months ended 30 September 2008
Share Share premium Shares to be issued Merger
capital reserve
�'000 �'000 �'000 �'000
Balance at 1 April 2007 6,783 135,951 1,289 51,163
Currency translation - - - -
adjustments
Net income recognised directly - - - -
in equity
Loss for the period - - - -
Total recognised gain / (loss) - - - -
for the period
New share capital subscribed 2 46 - -
Shares to be issued - - 128 -
Conversion of convertible loan 2 29 - -
notes
Employee share option scheme: - - - -
- value of services provided
Balance at 30 September 2007 6,787 136,026 1,417 51,163
Balance at 1 October 2007 6,787 136,026 1,417 51,163
Currency translation - - - -
adjustments
Net income recognised directly - - - -
in equity
Loss for the period - - - -
Total recognised loss for the - - - -
period
New share capital subscribed 2 3 - -
Shares to be issued - - (128) -
Conversion of convertible loan 17 263 - -
notes
Employee share option scheme: - - - -
- value of services provided
Balance at 31 March 2008 6,806 136,292 1,289 51,163
Balance at 1 April 2008 6,806 136,292 1,289 51,163
Currency translation - - - -
adjustments
Net expense recognised - - - -
directly in equity
Loss for the period - - - -
Total recognised loss for the - - - -
period
New share capital subscribed 3 27 - -
Shares issued as consideration 35 1,254 (1,289) -
for acquisition of MacroMed
Inc.
Issue of convertible loan - - - -
notes
Conversion of convertible loan 5 55 - -
notes
Employee share option scheme: - - - -
- value of services provided
Balance at 30 September 2008 6,849 137,628 - 51,163
Equity reserve Cumulative Retained earnings Total
translation reserve
�'000 �'000 �'000 �'000
Balance at 1 April 2007 220 558 (119,493) 76,471
Currency translation 268 - 268
adjustments
Net income recognised directly - 268 - 268
in equity
Loss for the period - - (6,223) (6,223)
Total recognised gain / (loss) - 268 (6,223) (5,955)
for the period
New share capital subscribed - - - 48
Shares to be issued - - - 128
Conversion of convertible loan (3) - - 28
notes
Employee share option scheme: - - 471 471
- value of services provided
Balance at 30 September 2007 217 826 (125,245) 71,191
Balance at 1 October 2007 217 826 (125,245) 71,191
Currency translation - (32) - (32)
adjustments
Net income recognised directly - (32) - (32)
in equity
Loss for the period - - (10,519) (10,519)
Total recognised loss for the - (32) (10,519) (10,551)
period
New share capital subscribed - - 5
Shares to be issued - - - (128)
Conversion of convertible loan (14) - - 266
notes
Employee share option scheme: - - 769 769
- value of services provided
Balance at 31 March 2008 203 794 (134,995) 61,552
Balance at 1 April 2008 203 794 (134,995) 61,552
Currency translation - (1,618) - (1,618)
adjustments
Net expense recognised - (1,618) - (1,618)
directly in equity
Loss for the period - - (4,793) (4,793)
Total recognised loss for the - (1,618) (4,793) (6,411)
period
New share capital subscribed - - - 30
Shares issued as consideration - - - -
for acquisition of MacroMed
Inc.
Issue of convertible loan - - - -
notes
Conversion of convertible loan (6) - - 54
notes
Employee share option scheme: - - 423 423
- value of services provided
Balance at 30 September 2008 197 (824) (139,365) 55,648
Protherics PLC
CONDENSED CONSOLIDATED CASH FLOW STATEMENT (UNAUDITED)
for the six months ended 30 September 2008
Six months to Six months to 30 September 2007
30 September 2008
�'000 �'000 �'000 �'000
Cash flows from operating
activities
Cash (outflow) / inflow from (9,964) 7,712
operations
Income tax paid - (258)
Income tax received 821 530
Net cash (outflow) / inflow (9,143) 7,984
from operating activities
Investing activities
Interest received 741 1,253
Proceeds on disposal of - -
property, plant and equipment
Purchases of property, plant (573) (1,601)
and equipment
Capital grants received - -
Net cash from / (used in) 168 (348)
investing activities
Financing activities
Interest paid (107) (76)
Interest paid on finance (95) (118)
leases
Repayment of borrowings (9) (44)
Repayment of finance leases (403) (521)
Proceeds from issue of shares 30 48
Net cash used in financing (584) (711)
activities
Net (decrease) / increase in (9,559) 6,925
cash and cash equivalents
Cash and cash equivalents at 37,616 39,989
the beginning of period
Effect of foreign exchange 37 (25)
rate changes
Cash and cash equivalents at 28,094 46,889
the end of period
Year ended 3131 March 2008
�*000 �*000
Cash flows from operating activities
Cash (outflow) / inflow from operations (126)
Income tax paid -
Income tax received 282
Net cash (outflow) / inflow from operating 156
activities
Investing activities
Interest received 2,382
Proceeds on disposal of property, plant and 2
equipment
Purchases of property, plant and equipment (3,471)
Capital grants received 9
Net cash from / (used in) investing activities (1,078)
Financing activities
Interest paid (160)
Interest paid on finance leases (238)
Repayment of borrowings (55)
Repayment of finance leases (1,063)
Proceeds from issue of shares 53
Net cash used in financing activities (1,463)
Net (decrease) / increase in cash and cash (2,385)
equivalents
Cash and cash equivalents at the beginning of 39,989
period
Effect of foreign exchange rate changes 12
Cash and cash equivalents at the end of period 37,616
Protherics PLC
NOTES TO THE CONDENSED CONSOLIDATED CASH FLOW STATEMENT (UNAUDITED)
for the six months ended 30 September 2008
Reconciliation of operating loss to net cash outflow from operating activities
Six months Six months Year
ended 30 September ended 30 September ended 31 March
2008 2007 2008
�'000 �'000 �'000
Loss for the period (4,793) (6,223) (16,742)
Tax (213) 159 (509)
Finance costs 190 213 415
Finance income (741) (1,253) (2,382)
Operating loss (5,557) (7,104) (19,218)
Adjustments for:
Change in fair value of (264) 83 284
derivatives
Deferred grant income (53) (52) (104)
Share-based payment costs 423 471 1,240
Depreciation of property, 1,140 896 2,076
plant and equipment
Amortisation of intangible 292 246 498
fixed assets
(Profit) / loss on disposal (317) 58 134
of property, plant & equipment
Operating cash flows before (4,336) (5,402) (15,090)
movements in working capital
Decrease in inventories 1,095 1,023 686
(Increase) / decrease in (4,372) 9,854 11,054
receivables
(Decrease) / increase in (2,351) 2,237 3,224
payables
Net cash flows from operating (9,964) 7,712 (126)
activities
Analysis of net debt
1 April 2008 Cash flow Exchange movement Other non-cash 30 September 2008
changes
�'000 �'000 �'000 �'000 �'000
Cash and cash equivalents 37,616 (9,559) 37 - 28,094
Loans - amounts falling due in (10) 9 1 (159) (159)
less than one year
Loans - amounts falling due in (2,112) - 18 159 (1,935)
more than one year
Obligations under finance (2,678) 403 - (282) (2,557)
lease and hire purchase
obligations
32,816 (9,147) 56 (282) 23,443
Protherics PLC
NOTES TO THE CONDENSED FINANCIAL STATEMENTS
for the six months ended 30 September 2008
1. Basis of preparation
The condensed financial statements have been prepared using accounting policies consistent with International Financial Reporting
Standards (IFRS) and in accordance with International Accounting Standard (IAS) 34, Interim Financial Reporting. They do not include all of
the information required for full annual financial statements, and should be read in conjunction with the consolidated financial statements
of the Group as at and for the year ended 31 March 2008 which have been prepared in accordance with IFRS as adopted by the European Union.
These condensed financial statements were approved by the Board of Directors on 20 November 2008.
The comparative figures for the year ended 31 March 2008 are not the Company's financial statements for that financial year. Those
accounts have been reported on by the Company's auditors and delivered to the Registrar of Companies. The report of the auditors was (i)
unqualified, (ii) did not include a reference to any matters to which the auditors drew attention by way of emphasis without qualifying
their report, and (iii) did not contain a statement under section 237(2) or (3) of the Companies Act 1985.
The condensed financial statements have not been audited or reviewed pursuant to Auditing Practices Board guidance on review of interim
financial information.
2. Significant accounting policies
The condensed financial statements have been prepared under the historical cost convention, except for the revaluation of certain
financial instruments.
The same accounting policies, presentation and methods of computation are followed in these condensed financial statements as were
applied in the preparation of the Company's financial statements for the year ended 31 March 2008.
3. Segment information
As at 30 September 2008, the Group is organised into two operating segments, the sale, manufacture and development of pharmaceutical
products and out-licensed product royalties.
Six months ended 30 September Sale, manufacture Out-licensed product Consolidated
2008 and development of royalties
pharmaceutical
products
�'000 �'000 �'000
Revenue
External sales 17,190 12 17,202
Inter-segment sales - - -
Total revenue 17,190 12 17,202
Operating (loss) / profit (5,568) 11 (5,557)
Finance income 741
Finance costs (190)
Loss before tax (5,006)
Tax 213
Loss for the period, (4,793)
attributable to equity
shareholders
Six months ended 30 September
2007
Revenue
External sales 14,739 79 14,818
Inter-segment sales - - -
Total revenue 14,739 79 14,818
Operating (loss) / profit (7,182) 78 (7,104)
Finance income 1,253
Finance costs (213)
Loss before tax (6,064)
Tax (159)
Loss for the period, (6,223)
attributable to equity
shareholders
Year ended 31 March 2008
Revenue
External sales 25,843 224 26,067
Inter-segment sales - - -
Total revenue 25,843 224 26,067
Operating (loss) / profit (19,429) 211 (19,218)
Finance income 2,382
Finance costs (415)
Loss before tax (17,251)
Tax 509
Loss for the period, (16,742)
attributable to equity
shareholders
4. Operations in the interim period
A significant proportion of the Group's expected revenues arise from its CroFab rattlesnake antivenom treatment and is subject to
seasonal fluctuations, with peak demand in the first six months of the Group's financial year caused by the hibernation patterns of such
snakes. In the six months to 30 September 2008, the group recognised �10,870,000 of CroFab revenues (six months ended 30 September 2007
�10,297,000) and �5,410,000 for the six months ended 31 March 2008 (twelve months ended 31 March 2008 �15,707,000).
During the six months ended 30 September 2008, the Group is showing greatly reduced general and administrative expenditure when compared
to the six months ended 30 September 2007. This is primarily due to the relative weakening of sterling against the US dollar in the current
period, which has led to net foreign exchange gains of �1,844,000 being recognised on assets and liabilities denominated in other
currencies.
5. Income tax credit / (expense)
Six months ended 30 Six months ended 30 Year
September 2008 September 2007 ended 31
March
2008
�'000 �'000
Current tax:
UK current tax 76 199 624
Foreign tax - (358) (351)
Deferred tax 137 - 236
213 (159) 509
The UK tax credits in the current and prior periods principally arose as a result of research and development expenditure claimed under
the Finance Act 2000. The deferred tax credit has arisen as a result of increased losses in an overseas subsidiary.
6. Loss per share
The calculation of the basic and diluted loss per share is based on the following data:
Six months ended 30 Six months ended 30 Year
September 2008 September 2007 ended 31
March
2008
�'000 �'000 �'000
Loss
Loss for the purposes of basic (4,793) (6,223) (16,742)
loss per share being net
profit attributable to equity
shareholders of the parent
Effect of dilutive potential - - -
ordinary shares
Loss for the purposes of (4,793) (6,223) (16,742)
diluted loss per share
Number of shares
Weighted average number of 341,235,113 339,234,927 339,541,951
shares for the purposes of
basic loss per share
Effect of dilutive potential
ordinary shares:
Share options - - -
Weighted average number of 341,235,113 339,234,927 339,541,951
ordinary shares for the
purposes of diluted loss per
share
7. Intangible assets
In the period to 30 September 2008, additions to intangible assets amounted to $5 million (�2,507,000) arising from a milestone payment
due to Glenveigh Pharmaceuticals LLP in accordance with the license agreement as announced on 22 April 2008.
8. Property, plant and equipment
In the period to 30 September 2008, there were additions to property, plant and equipment of �931,000 (2007: �1,648,000).
9. Changes in inventories
During the six months ended 30 September 2008, the Group continued to recognise a provision against raw materials, work in progress and
finished goods inventory relating to items which relate to research and development programmes where the Group does not consider it probable
that it is able to realise economic value from their sale or use. The charge amounted to �691,000 (six months ended 30 September 2007:
�1,856,000). If the circumstances that previously caused these inventories to be written down below cost subsequently change and there is
clear evidence of an increase in economic value, this provision will be reversed.
10. Trade and other receivables
During the six months ended 30 September 2008, the Group has recognised significant sales values in the final trading month when
compared to the six months ended 30 September 2007. This and the relative strengthening of the US$ against the � has resulted in the trade
receivables balance at 30 September 2008 increasing by �2,722,000 when compared to the balance at 30 September 2007.
11. Trade and other payables
The Group's current trade and other payables as at 30 September 2008 have increased when compared to 30 September 2007. This increase
arises due to a combination of a recognition of a milestone payable of $5 million (�2,806,000, see note 7), an increase in deferred income
on product to be dispatched within the next 12 months largely due to a strengthening of the US$ and increased payables following increased
research and development activities.
12. Share capital
The following shares were issued in the current and prior interim periods:
Six months to Six months to
30 September 2008 30 September 2007
Shares issued Nominal value Consideration Shares Nominal value Consideration
Issued
No. �'000 �'000 No. �'000 �'000
Issued as consideration for 1,741,911 35 1,289 - - -
acquisition of MacroMed Inc.
Allotted under share option 167,593 3 30 100,867 2 49
schemes
Conversion of convertible loan 221,128 5 60 117,200 2 31
notes
2,130,632 43 1,379 218,067 4 80
13. Acquisitions and disposals
There were no acquisitions or disposals in the current or prior interim periods.
14. Commitments and contingencies
The Group leases various buildings under non-cancellable operating agreements with varying terms and renewal rights. The Group also has
various other non-cancellable operating lease arrangements.
15. Related party disclosures
Transactions between the Company and its subsidiaries, which are related parties, have been eliminated on consolidation and are
therefore not disclosed in this note.
There were no material related party transactions requiring disclosure in the period or the comparable prior period.
16. Other
Copies of this statement will be posted on the Company's website www.protherics.com and will be available to the public at the Company's
registered office at The Heath Business and Technical Park, Runcorn, Cheshire, WA7 4QX.
Responsibility Statement
We confirm that to the best of our knowledge:
a) The condensed set of financial statements has been prepared in accordance with IAS 34,
Interim Financial Reporting, as adopted by the European Union;
b) The interim management report includes a fair review of the information required by the Financial
Statements Disclosure and Transparency Rules (DTR) 4.2.7R being an indication of important events
that have arisen during the first six months and their impact on the condensed financial statements and
description of principal risks and uncertainties for the remaining six months of the year; and
c) The interim management report includes a fair review of the information required by DTR 4.2.8R being
disclosure of related party transactions and changes therein since the last financial statements.
By order of the Board
Andrew Heath Rolf Soderstrom
Chief Executive Officer Group Finance Director
This information is provided by RNS
The company news service from the London Stock Exchange
END
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