Phytopharm Announces Preliminary Results for the Year Ended 31 August 2004.GODMANCHESTER, United Kingdom -- Phytopharm plc (Nasdaq:PHYOF)(LSE LSE - Language Sensitive Editor :PYM) ("Phytopharm" or the "Group") today announces its preliminary results for the year ended 31 August 2004. Highlights --Commencement of Phase II study of novel Alzheimer's disease Alzheimer's disease (ăls`hī'mərz, ôls–), degenerative disease of nerve cells in the cerebral cortex that leads to atrophy of the brain and senile dementia. treatment, Cogane(TM), under a UK Clinical Trial Exemption certificate (Programme P58) --Second milestone received from Yamanouchi Pharmaceutical Co., Ltd. (Yamanouchi) following evaluation of Phase I data (Programme P58) --Positive results from European multi-centre study in canine canine or canid Any domestic or wild dog or doglike mammal (e.g., wolf, jackal, fox) in the family Canidae, found throughout the world except in Antarctica and on most ocean islands. atopic dermatitis Atopic Dermatitis Definition Eczema is a general term used to describe a variety of conditions that cause an itchy, inflamed skin rash. Atopic dermatitis, a form of eczema, is a non-contagious disorder characterized by chronically inflamed skin and (Programme P7v) --UK launch of Phytopica(TM) for canine skin disorders (Programme P7v) with marketing partner --UK launch of Zanthofen(TM) with marketing partner for canine joint disorders (Programme P54v) --Successful placing of new shares to raise GBP GBP In currencies, this is the abbreviation for the British Pound. Notes: The currency market, also known as the Foreign Exchange market, is the largest financial market in the world, with a daily average volume of over US $1 trillion. 6.3 million after expenses --Successful completion of Phase I study for novel motor neurone disease The motor neurone diseases (or motor neuron diseases) (MND) are a group of progressive neurological disorders that destroy motor neurones, the cells that control voluntary muscle activity such as speaking, walking, breathing, and swallowing. (ALS Als (äls), Ger. Alsen, island, 121 sq mi (313 sq km), Sønderjylland co., S Denmark, in the Lille Bælt, separated from the mainland by the narrow Alensund. ) treatment, Myogane(TM), under US Investigational New Drug application (Programme P59) --Completion of level I ADR ADR - Astra Digital Radio programme and stated intention to list on Nasdaq --Orphan drug designation granted by the U.S. Food and Drug Administration (FDA FDA abbr. Food and Drug Administration FDA, n.pr See Food and Drug Administration. FDA, n.pr the abbreviation for the Food and Drug Administration. ) for Myogane(TM) (Programme P59) --Fast Track designation granted by the FDA for Myogane(TM) (Programme P59) Dr Richard Dixey, Chief Executive of Phytopharm, said: "Phytopharm has made excellent progress in its development of novel therapeutics therapeutics Treatment and care to combat disease or alleviate pain or injury. Its tools include drugs, surgery, radiation therapy, mechanical devices, diet, and psychiatry. , as evidenced by the achievement of so many of our goals during the past financial year. We are confident that the year ahead will hold many more achievements." A presentation for analysts will be held at Financial Dynamics, Holborn Gate, 26 Southampton Buildings, London WC2A 1PB at 9:30 a.m. today. Operational Review Phytopharm is a pharmaceutical company specialising in the discovery and development of novel therapeutic agents for neurodegeneration, obesity obesity, condition resulting from excessive storage of fat in the body. Obesity has been defined as a weight more than 20% above what is considered normal according to standard age, height, and weight tables, or by a complex formula known as the body mass index. and metabolic disease metabolic disease, n a disorder that causes dysfunction of the metabolic action of the body, resulting in loss of control of homeostasis. paraneoplastic syndrome , dermatology dermatology (dûrmətŏl`əjē), branch of medicine concerned with diagnosis and treatment of diseases and disorders of the skin. and inflammation. The Company's strategy is to develop first-in-class products through Phase II clinical testing and then secure pharmaceutical partners for late stage development, sales and marketing. The current status of our products, each at different stages of development, is described below. Neurodegeneration The neurodegeneration programmes include Alzheimer's disease (P58), Parkinson's disease Parkinson's disease or Parkinsonism, degenerative brain disorder first described by the English surgeon James Parkinson in 1817. When there is no known cause, the disease usually appears after age 40 and is referred to as Parkinson's disease. (P63) and amyotrophic lateral sclerosis amyotrophic lateral sclerosis (ALS) (ā'mīətrōf`ik, sklĭrō`sĭs) or motor neuron disease, (P59), a motor neurone disease. Our lead product, Cogane(TM) (coded PYM50028) is being developed for Alzheimer's and Parkinson's disease. In pre-clinical studies, PYM50028 was shown to be neuroprotective and reverse both the decrease of a neuronal neu·ro·nal adj. Relating to a neuron. neuronal pertaining to or emanating from a neuron. neuronal abiotrophy see hereditary neuronal abiotrophy of Swedish Lapland dogs. growth factor and the neuronal degeneration degeneration /de·gen·er·a·tion/ (de-jen?er-a´shun) deterioration; change from a higher to a lower form, especially change of tissue to a lower or less functionally active form. observed in the ageing brain The human brain goes through several large-scale changes as the individual progresses from embryo through to old age. Pre-natal development Developmental neurobiology concerns itself with the development of the brain. . Importantly, this product has also been shown to restore levels of proteins that are altered in the ageing brain, returning them to levels observed in the young, causing beneficial outgrowth and branching of neurites. In December 2003, we announced that we had been granted clearance by the Medicines and Healthcare Products Regulatory Agency The Medicines and Healthcare products Regulatory Agency (MHRA) is the UK government agency which is responsible for ensuring that medicines and medical devices work and are acceptably safe. (MHRA MHRA Medicines and Healthcare Products Regulatory Agency MHRA Modern Humanities Research Association (United Kingdom) MHRA Minnesota Human Rights Act MHRA Malta Hotels and Restaurants Association ) to commence a Phase II 'proof of concept' clinical study in Alzheimer's disease under a clinical trial exemption (CTX CTX Context (Management; Tandem) CTX Centex Corporation (stock symbol) CTX Centrex CTX Cyclophosphamide CTX Corporate Trade Exchange CTX Cytoxan CTX Cholera Toxin CTX Clinical Trial Exemption ) certificate. The Phase II study utilises a randomised Adj. 1. randomised - set up or distributed in a deliberately random way randomized irregular - contrary to rule or accepted order or general practice; "irregular hiring practices" , double-blind, placebo-controlled design to evaluate the safety, efficacy and pharmacokinetic profile of Cogane(TM) after once-daily oral administration over three months. The effects of Cogane(TM) on memory, concentration and executive function will be evaluated during the study, which is expected to report at the end of 2005. In January 2004, we announced that we had received a milestone of approximately $2 million from Yamanouchi Pharmaceutical Co., Ltd., a leading Japanese pharmaceutical company and our partner for Cogane(TM). This milestone was paid following receipt by Yamanouchi of the results of the Phase Ib study of Cogane(TM). Our second lead product, Myogane(TM) (coded PYM50018) is being developed for amyotrophic lateral sclerosis (ALS; also known as Lou Gehrig's disease Lou Geh·rig's disease n. See amyotrophic lateral sclerosis. ). ALS is the most common motor neurone disease and results from progressive degeneration of both upper and lower motor neurones lower motor neuron n. A motor neuron whose cell body is located in the brainstem or the spinal cord and whose axon innervates skeletal muscle fibers. Also called final motor neuron. and is usually fatal within five years. In pre-clinical models, PYM50018 was seen to protect against neuronal damage, increase neurite outgrowth, and reverse oxidative ox·i·da·tive adj. Of, relating to, or characterized by oxidation. oxidative, adj having the ability or property to oxidize. oxidative pertaining to or emanating from oxidation. damage and neuronal apoptosis apoptosis or programmed cell death Mechanism that allows cells to self-destruct when stimulated by the appropriate trigger. It may be initiated when a cell is no longer needed, when a cell becomes a threat to the organism's health, or for other reasons. in vitro in vitro /in vi·tro/ (in ve´tro) [L.] within a glass; observable in a test tube; in an artificial environment. in vi·tro adj. In an artificial environment outside a living organism. . When administered orally in a transgenic trans·ge·nic adj. 1. Of, relating to, or being an organism whose genome has been altered by the transfer of a gene or genes from another species or breed: transgenic mice. 2. pre-clinical model of ALS, PYM50018 also delayed the loss of muscle strength and extended survival time. In April 2004, Phytopharm announced the successful completion of a Phase I clinical study to evaluate the safety, tolerability tol·er·a·ble adj. 1. Capable of being tolerated; endurable. 2. Fairly good; passable. See Synonyms at average. tol and pharmacokinetic profile of Myogane(TM). This study was conducted under an investigational new drug (IND) application filed with the United States Food and Drug Administration United States Food and Drug Administration (FDA), n.pr a unit of the Public Health Service created to protect the health of the nation against impure and unsafe foods, drugs, and cosmetics. (FDA) and confirmed that the product was well absorbed with a good safety profile. A repeat dose Phase Ib clinical study to evaluate the safety, tolerability and pharmacokinetic profile of Myogane(TM) in healthy volunteers is expected to commence in the Q2 2005. In July 2004, we announced that the FDA had granted orphan drug orphan drug, drug developed under the U.S. Orphan Drug Act (1983) to treat a disease that affects fewer than 200,000 people in the United States. The orphan drug law offers tax breaks and a seven-year monopoly on drug sales to induce companies to undertake the designation to Myogane(TM) for the treatment of ALS. Orphan drug designation can be granted by the FDA for treatments that may provide significant benefit to patients with serious, life-threatening diseases that affect less than 200,000 people in the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. . The Orphan Drug Act was created by the United States Congress to provide assistance and incentives for sponsors to develop drugs judged to be of potential benefit for a qualifying disease. Orphan drug designation qualifies a product for possible financial incentives, including seven years of marketing exclusivity upon FDA approval, and the potential of an expedited approval. In addition to market exclusivity, orphan drug status provides possible tax incentives for a company's investment in US clinical research. In November 2004, Phytopharm announced that the FDA had granted Fast Track designation to Myogane(TM) for the treatment of ALS. The Fast Track programme is designed to expedite ex·pe·dite tr.v. ex·pe·dit·ed, ex·pe·dit·ing, ex·pe·dites 1. To speed up the progress of; accelerate. 2. the review of drug candidates for the treatment of patients with serious or life-threatening diseases where there is an unmet un·met adj. Not satisfied or fulfilled: unmet demands. medical need for new therapeutic approaches. Having a Fast Track designation allows a company to file a New Drug Application (NDA (Non Disclosure Agreement) An agreement signed between two parties that have to disclose confidential information to each other in order to do business. In general, the NDA states why the information is being divulged and stipulates that it cannot be used for any ) on a rolling basis as data becomes available. This enables the FDA to review the filing as it is received, rather than waiting for the entire document prior to commencing the review process. With a Fast Track designation, there is often the opportunity for more frequent interactions with the FDA and the option of requesting evaluation of studies using surrogate endpoints  It has been suggested that Surrogate markers, Surrogate end point be merged into this article or section. . In addition, there may
be the possibility of a priority review, which could decrease the
typical review period.Obesity and metabolic disease Our obesity programme (P57) includes an extract of Hoodia gordonii Hoodia gordonii is a medicinal plant. Medicinal uses The use of Hoodia has long been known by the indigenous populations of Southern Africa, who infrequently use these plants for treating indigestion and small infections. for the dietary control of obesity, which contains a novel appetite suppressant Appetite suppressant Drug that decreases feelings of hunger. Most work by increasing levels of serotonin or catecholamine, chemicals in the brain that control appetite. that reduces caloric caloric /ca·lo·ric/ (kah-lor´ik) pertaining to heat or to calories. ca·lor·ic adj. 1. Of or relating to calories. 2. Of or relating to heat. intake in overweight Overweight Refers to an investment position that is larger than the generally accepted benchmark. Notes: For example, if a company normally holds a portfolio whose weighting of cash is 10%, and then increases cash holdings to 15%, the portfolio would have an overweight subjects, as demonstrated in our double-blind, placebo-controlled clinical study announced in December 2001. In June 2004, Phytopharm initiated a substantial increase in its agronomy agronomy (əgrŏn`əmē), branch of agriculture dealing with various physical and biological factors—including soil management, tillage, crop rotation, breeding, weed control, and climate—related to crop production. programme for the cultivation cultivation, tilling or manipulation of the soil, done primarily to eliminate weeds that compete with crops for water and nutrients. Cultivation may be used in crusted soils to increase soil aeration and infiltration of water; it may also be used to move soil to or of the raw material and optimised the process for making extracts from the plant, with emphasis on the inclusion of the material into products including meal replacement products for controlling obesity. The US market for meal replacement products was estimated to be worth in excess of $1.2 billion in 2002. As advanced discussions are on-going with a licensing partner in this area, the Company can make no further comment. Phytopharm has also developed screens that appear to be predictive of appetite suppressant activity to evaluate pharmaceutical development candidates in our metabolic disease programme (P64). Dermatology The dermatology programmes include products for canine skin disorders (P7v) and human eczema eczema (ĕk`səmə), acute or chronic skin disease characterized by redness, itching, serum-filled blisters, crusting, and scaling. (P55). These products have a dual mode of action that targets both the allergic al·ler·gic adj. 1. Of, caused, or characterized by an allergy. 2. Having an allergy or exhibiting an allergic reaction to a substance. allergic pertaining to or caused by allergy. and inflammatory components of skin disorders. In February 2004, we announced positive results from a European multi-centre study in canine atopic dermatitis with our three-plant product, coded PYM00217. This randomised, double-blind, placebo-controlled study in 120 dogs was conducted by 14 veterinary dermatologists in the UK and France. The study confirmed that the optimal daily dose of PYM00217 is 200 mg/kg and that the product is palatable pal·at·a·ble adj. 1. Acceptable to the taste; sufficiently agreeable in flavor to be eaten. 2. Acceptable or agreeable to the mind or sensibilities: a palatable solution to the problem. , well tolerated and has a good overall safety profile. By the end of the 12-week dosing period there was a statistically significant reduction (-23%) in the mean Canine Atopic Dermatitis Extent and Severity Index (CADESI) score for the 200 mg/kg group (p less than 0.01). This study also demonstrated that the benefit of PYM00217 was most evident in the more severe cases (i.e., baseline CADESI greater than 50). A greater than 20% reduction in baseline score was observed for 64% of the dogs in the 200 mg/kg group compared with only 25% of cases in the placebo placebo (pləsē`bō), inert substance given instead of a potent drug. Placebo medications are sometimes prescribed when a drug is not really needed or when one would not be appropriate because they make patients feel well taken care of. group (p less than 0.05). Following the success of this study, we launched PYM00217 with the brand name Phytopica(TM) for the UK market on 31 March, at a special symposium at the British Veterinary Dermatology Study Group's Spring meeting in Birmingham. Canine dermatological dermatological, dermatologic pertaining to dermatology; of or affecting the skin. disorders are well recognised by veterinarians Veterinarians and veterinary surgeons (vets) are medical professionals who operate exclusively on animals. Well-known and notable veterinarians include:
American geneticist. He won a 1946 Nobel Prize for the study of the hereditary effect of x-rays on genes. Mül·ler , Johannes Peter 1801-1858. & Kirk's Small Animal Dermatology, 6th Ed, 2000). With around 90,000 affected animals in the UK, the canine dermatology market is estimated to be potentially worth GBP 10 million in the UK and GBP 100 million worldwide. Phytopica(TM) is recognised by consultant veterinarians as a potential first line, premium price product. Following the UK launch to registered veterinary dermatologists, Phytopharm is now seeking global partners to market Phytopica(TM) in other territories. Inflammation Finally, the inflammation programmes include products for canine joint disorders (P54v) and human inflammatory disorders, including asthma (P61). These products are characterised by their inhibition of a wide range of enzymes central to chronic inflammation chronic inflammation n. Inflammation that may have a rapid or slow onset but is characterized primarily by its persistence and lack of clear resolution; it occurs when the tissues are unable to overcome the effects of the injuring agent. . In June 2004, we announced the UK launch of Zanthofen(TM) (coded PYM50014) for the maintenance of canine joint mobility. Pre-clinical studies have demonstrated that the components of Zanthofen(TM) have beneficial properties that help maintain joint mobility. In our previously reported placebo-controlled clinical study, two months' administration of Zanthofen(TM) components demonstrated a statistically significant improvement in canine joint mobility as determined by veterinarians and this was associated with a good safety profile. Zanthofen(TM) is now available to veterinarians across the UK and distributed and marketed by Genitrix Ltd, a UK-based veterinary product company. Good progress has been made in developing novel synthetic molecules intended to result in a pharmaceutical prescription medicine for the treatment of inflammatory disorders, including asthma (P61). Pre-clinical work has demonstrated that these molecules have anti-inflammatory and antispasmodic antispasmodic /an·ti·spas·mod·ic/ (-spaz-mod´ik) 1. preventing or relieving spasms. 2. an agent that so acts. an·ti·spas·mod·ic adj. effects. We anticipate that further proof of concept studies using these compounds in pre-clinical models of asthma will be investigated in 2005. Financial Review Phytopharm has core expertise in all aspects of drug development and subcontracts all laboratory work to specialists in the field all over the world, while retaining full control over the direction of the pharmaceutical development process. As a result, Phytopharm has lower fixed overheads, access to the latest research techniques and a lower development cost structure. Following 'proof of principle' or Phase II clinical evaluation clinical evaluation Medtalk An evaluation of whether a Pt has symptoms of a disease, is responding to treatment, or is having adverse reactions to therapy , Phytopharm seeks licensing partners for the development and commercialisation of its products. Multinational partners are sought, with milestones receivable on completion of agreed targets, submission of regulatory documents and royalties receivable on sales. Agreements are negotiated by reference to each product's market potential, stage of development, and the robustness of the data generated. Phytopharm's current commercialisation partners are Yamanouchi Pharmaceutical Co. Ltd for PYM50028 and Genitrix Limited for Zanthofen(TM). Phytopharm aims to reduce investors' risk by the parallel development of the original plant-based products for early marketing; for example, Hoodia Hoodia (IPA: 'hʊdiːə) is a genus of 13 species in the flowering plant family Apocynaceae, under the subfamily Asclepiadoideae. extract as a human functional food and PhytopicaTM as a companion animal health product to generate early revenue that can assist in funding the development of the Group's major pharmaceutical products. The Group's principal activity since the foundation of its predecessor (Phytopharm Limited) in 1990 has been pharmaceutical research and product development. The Group has made losses since its initial public offering in 1996. As at 31 August 2004, Phytopharm's accumulated ac·cu·mu·late v. ac·cu·mu·lat·ed, ac·cu·mu·lat·ing, ac·cu·mu·lates v.tr. To gather or pile up; amass. See Synonyms at gather. v.intr. To mount up; increase. losses were GBP 33 million (2003: GBP 27 million). The Group's losses fluctuate from year to year principally due to the commencement or termination of collaborative research and development agreements, the timing of milestone payments, the level of interest income and variations in the level of expenditures relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc research and clinical development programmes. Phytopharm expects to incur continued losses and not to achieve sustainable profitability while its lead pharmaceutical products are still in development, subject to the terms of any product licensing agreements in the intervening years. Phytopharm continues to incur the greater part of its costs on personnel and external contract costs needed to support the research and development of pharmaceutical products, including expenses related to the filing, defence and enforcement of patent and other intellectual property rights.) Turnover Revenues for the year ended 31 August 2004 were GBP 1.07 million (2003: GBP 2.43 million). The revenues for 2004 result from and include a milestone payment of GBP 1 million, on which GBP 0.1 million has been paid in respect of Japanese withholding taxes The amount legally deducted from an employee's wages or salary by the employer, who uses it to prepay the charges imposed by the government on the employee's yearly earnings. , derived from the licence agreement on PYM50028 with Yamanouchi (signed May 2003), revenue of GBP 0.05 million from the development work conducted for Yamanouchi and GBP 0.02 million from the sales of Phytopica(TM) and Zanthofen(TM). All revenues derived from Yamanouchi referred to in this document are subject to 10% withholding tax, so that the cash received is 90% of the revenue. This will continue until Phytopharm is profitable, when the Group expects to be able to recover the withholding tax. Operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. Research and development expenses Phytopharm subcontracts all laboratory work to third party specialists. The research and development expenses include the reimbursement Reimbursement Payment made to someone for out-of-pocket expenses has incurred. of the costs incurred by the third party subcontractors and the overhead (including the relevant staff costs) of Phytopharm allocated to research and development activities. Research and development expenses were GBP 6.35 million (2003: GBP 7.23 million). Expenditure was dominated by the commencement of the PYM50028 Phase IIa clinical trial in Alzheimer's disease. Expenses were also incurred by the successful completion of the PYM50018 Phase Ia clinical trial in motor neurone disease and the PYM00217 Phase IIb clinical trial in canine atopic dermatitis. Additional expenses included the commencement of the agronomy programme for the dietary control of obesity product and the marketing of Phytopica(TM). Administrative expenses Administrative expenses comprised mainly the costs incurred in respect of the employees in the finance, business development and secretarial departments. Administrative expenses were GBP 1.71 million (2003: GBP 1.15 million). The increased costs reflect the additional administrative support required for the growing research and development activity, the share option compensation charge and US financial compliance costs. Net interest receivable Net interest receivable comprises mainly the interest income generated from cash invested in short-term deposits. Net interest income was GBP 0.24 million (2003: GBP 0.28 million). The change over the year was due to changing short-term deposits as the Group utilised the cash of GBP 10.8 million raised from the equity financing Equity Financing The act of raising money for company activities by selling common or preferred stock to individual or institutional investors. In return for the money paid, shareholders receive ownership interests in the corporation. in November 2000, and GBP 6.3 million raised from another equity financing in February 2004, and also changing interest rates during the year. Taxation There were no corporation tax charges for the period under review due to the incidence of tax losses. The tax credit on the loss on ordinary activities was GBP 0.53 million (2003: GBP 0.38 million). The tax credit has been offset by a 10% withholding tax on the income from Yamanouchi. Liquidity and capital resources Since Phytopharm's initial public offering, cash expenditures have exceeded revenues. Phytopharm has financed its research and development operations primarily through: --an initial public offering of ordinary shares in 1996 --ordinary share offerings in November 1998, October 2000, December 2001 and February 2004 --revenue generated from collaborative arrangements. The net cash outflow from operating activities for the year ended 31 August 2004 was GBP 6.83 million (2003: GBP 3.94 million) resulting principally from the operating losses operating loss The excess of operating expenses over revenue. As with operating income, operating losses exclude revenues and expenses from operations that are not considered a regular part of the business. Also called deficit. Compare operating income. incurred by the Group during the year. The increase in net cash used by operating activities compared to the previous year reflects the significant expenses incurred in conducting a Phase IIa clinical trial in Alzheimer's disease. Phytopharm incurred operating losses of GBP 7.00 million (2003: GBP 5.95 million), principally as a result of costs incurred in performing research and development and from general and administrative costs administrative costs, n.pl the overhead expenses incurred in the operation of a dental benefits program, excluding costs of dental services provided. associated with the Group's operations. Phytopharm's net cash outflow for capital expenditure was GBP 103,000 (2003: GBP 28,000). The capital expenditure is primarily for office and administrative facilities. There was no cash outflow for acquisitions during these periods. Phytopharm's net cash inflow in·flow n. 1. The act or process of flowing in or into: an inflow of water; an inflow of information. 2. from financing activities was GBP 6.37 million (2003: GBP 75,000) following the equity financing in February 2004. The net cash inflow in 2003 primarily resulted from the proceeds from the exercise of the share options. Phytopharm had cash and short-term deposits of GBP 5.43 million at 31 August 2004 (2003: GBP 5.61 million). The decrease in cash and short term deposits mainly reflected the net cash used by operating activities. Phytopharm invested funds that were surplus to its requirements in highly liquid short-term deposits and has not borrowed funds during the financial year. Phytopharm had working capital of GBP 5.11 million at 31 August 2004 (2003: GBP 4.94 million). The Group utilised GBP 6.15 million of working capital during 2004, which is equivalent to GBP 512,000 per month. This expenditure is in line with the Group's business plan. Overall the results for the year were within the budget. Phytopharm has raised a net total of GBP 33 million since the float in 1996. As at 31 August 2004, a net total of GBP 28 million has been invested by shareholders in developing Phytopharm and its product opportunities.
PHYTOPHARM PLC
Consolidated Profit and Loss Account for the year ended 31 August 2004
Notes 2004 2003
Unaudited Audited
GBP '000 GBP '000
Turnover 2 1,072 2,427
Cost of sales (10) -
Gross profit 1,062 2,427
Other operating expenses 3 (8,058) (8,381)
Operating loss (6,996) (5,954)
Interest receivable and similar income 239 277
Interest payable and similar charges - (4)
Loss on ordinary activities before taxation (6,757) (5,681)
Tax on loss on ordinary activities 4 531 378
Loss for the year 6 (6,226) (5,303)
Basic fully diluted loss per ordinary share
(pence) 5 (15.3) (13.7)
All revenue and expenses shown above were generated from continuing
operations.
The Group has no recognised gains or losses for the financial year
other than those disclosed above.
PHYTOPHARM PLC
Consolidated Balance Sheet at 31 August 2004
Notes 2004 2003
Unaudited Audited
GBP '000 GBP '000
Fixed assets
Tangible assets 178 162
Current assets
Stocks 350 43
Debtors falling due after one year 614 -
Debtors falling due within one year 978 1,094
Cash held on deposit as short term
investments 5,237 5,131
Cash at bank and in hand 194 482
7,373 6,750
Creditors: amounts falling due within one
year (2,259) (1,815)
Net current assets 5,114 4,935
Total assets less current liabilities 5,292 5,097
Net assets 5,292 5,097
Capital and reserves
Called up share capital 427 388
Share premium account 6 38,135 31,808
Merger reserve 6 (204) (204)
Profit and loss account 6 (33,066) (26,895)
Equity shareholders' funds 5,292 5,097
PHYTOPHARM PLC
Consolidated Cash Flow Statement for the year ended 31 August 2004
Notes 2004 2003
Unaudited Audited
GBP '000 GBP '000
Net cash outflow from continuing operating
activities 7 (6,826) (3,938)
Returns on investment and servicing of
finance
Interest received 239 277
Other interest paid - (4)
239 273
Taxation
UK corporation tax received 856 277
Foreign taxation paid (100) (200)
756 77
Capital expenditure and financial investment
Purchase of tangible fixed assets (117) (85)
Proceeds on sale of tangible fixed assets 14 57
Advances to suppliers (614) -
(717) (28)
Cash outflow before use of liquid resources
and financing (6,548) (3,616)
Management of liquid resources
Decrease in cash held on short term deposit (106) 3,700
Financing
Proceeds from exercise of share options 37 83
Proceeds from issue of share capital 6,483 -
Expenses of issue of share capital (154) -
Repayment of principal under finance leases - (8)
Net cash inflow from financing 6,366 75
(Decrease)/increase in cash in the year (288) 159
Notes to the preliminary announcement
1. Basis of preparation
These financial statements have been prepared in accordance with the
accounting policies set out in the annual report of the Group for the
year ended 31 August 2003.
The figures shown for the year to 31 August 2004 represent unaudited
abridged financial statements and have not as yet been delivered to
the Registrar of Companies. The comparative figures for the year to 31
August 2003 have been taken from, but do not constitute, the Group's
financial statements for that financial year. Those financial
statements have been reported on by the Group's auditors and delivered
to the Registrar of Companies. The report of the auditors was
unqualified and did not contain a statement under s237 (2) or (3) of
the Companies Act 1985.
2. Turnover
2004 2003
Unaudited Audited
GBP '000 GBP '000
Licensing and development 1,052 2,427
Product sales 20 -
----- -----
1,072 2,427
===== =====
3. Other operating expenses
2004 2003
Unaudited Audited
GBP '000 GBP '000
Research and development 6,347 7,228
Administrative expenses 1,711 1,153
----- -----
8,058 8,381
===== =====
4. Tax on loss on ordinary activities
2004 2003
Unaudited Audited
GBP '000 GBP '000
United Kingdom
Corporation tax credit 631 578
Foreign Taxation
Witholding tax suffered (100) (200)
----- -----
531 378
===== =====
The Group has taken advantage of the Research and Development
corporation tax credits introduced in the Finance Act 2000 whereby the
Group may surrender corporation tax losses incurred on research and
development expenditure for a corporation tax refund at the rate of 24
pence in the pound.
5. Loss per share
The basic undiluted loss per share is based on the loss on ordinary
activities of GBP 6,226,130 (2003: loss of GBP5,303,318) and on
40,820,636 (2003: 38,671,689) ordinary shares, being the weighted
average number of shares in issue during the period.
The Company has no dilutive potential ordinary shares in issue because
it is loss making.
A further measure of earnings per share has been recommended by the
Institute of Investment Management and Research (the 'IIMR') for
adoption by financial analysts. This measure, known as headline
earnings, adjusts standard earnings per share to eliminate capital
items only. There are no material adjustments in respect of this
measure.
6. Share premium account and reserves
Share Merger Profit
premium reserve and loss
account Unaudited account
Unaudited GBP '000 Unaudited
GBP '000 GBP '000
At 1 September 2003 31,808 (204) (26,895)
Premium on issue of shares 6,481 - -
Expenses of new share issue (154) - -
Loss for the year - - (6,226)
Share option compensation charge - - 55
At 31 August 2004 38,135 (204) (33,066)
7. Reconciliation of operating loss to net cash outflow from
operating activities
2004 2003
Unaudited Audited
GBP '000 GBP '000
Continuing activities
Operating loss (6,996) (5,954)
Depreciation on tangible fixed assets 93 106
(Gain)/loss on disposal of fixed assets (6) 1
(Increase) in stocks (308) (43)
(Increase)/decrease in debtors (108) 2,051
Increase/(decrease) in creditors 444 (130)
Increase in provision for share option
compensation charge 55 31
Net cash outflow from continuing operating
activities (6,826) (3,938)
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