Interim Results

Physiomics plc Interim Results Announcement for the 6 months ended 31st December 2004 Oxford, UK 21 March 2005 - Physiomics plc (`Physiomics', AIM: PYC), a European systems biology simulation company, today publishes its interim results for the six months ended 31st December 2004. The majority of the financial information presented in this report relates to the period before the Company's AIM listing on 20 December 2004. The business of Physiomics is the development and sale of services aimed at reducing the high cost of drug development for pharmaceutical and biotechnology companies, principally by optimising the design of their clinical trials through the application of computer-based simulation tools. The services have a particular focus on cancer therapies. Highlights of the period: * Physiomics raises £750,000 before expenses in its AIM listing on 20 December 2004 * Turnover (ex grants) rose from £30,000 in the corresponding period last year to £96,000, an increase of over 200% * Cancer drug development partnership with Cronos Therapeutics signed * Major systems biology project initiated at Barcelona University * Systems Biology expert Professor David Fell joins Board * Formal notification from the UK Patent Office of registration to Physiomics in the UK of European Patent 0 937 286, which covers its SystemCell™ simulation technology Dr Stephen Parker, Chairman of Physiomics, commented: 'I am delighted to present our first set of results since Physiomics was listed on AIM on 20 December 2004. We made significant progress in the business over the period, culminating in the listing. The Directors recognise the invaluable support of staff, shareholders and advisors in achieving this important goal for the business and thank everyone for their hard work over the period. Going forward, we believe Physiomics is well placed to develop a strong business based on systems biology.' For further information please contact: Physiomics plc Dr Stephen Parker (Chairman) Tel: 07771 526 785 Dr John Savin (CEO) Tel: 01865 784 980 Northbank Communications Tel: 020 7886 8150 Emma Palmer Fiona Brown Rowan Minnion Notes to Editors Physiomics plc Physiomics plc, founded in 2001, develops and sells services aimed at reducing the high cost of drug development for pharmaceutical and biotechnology companies by optimising the design of cancer clinical trials through the application of computer-based simulations. Physiomics is also applying its technologies to develop proprietary cancer therapy products for out-licensing and, to this end, it has secured an option to license two innovative molecules. Chairman's Statement Business development The interim results show strong progress in the development of the business, with a major collaborative agreement with Bayer Technology Services GmbH signed in July 2004 and a drug development partnership, focused on cancer, initiated with Cronos Therapeutics Limited in August. Clinical Response Prediction brings together two unique strengths in systems biology - Bayer Technology Services' PK-Sim® physiology-based pharmacokinetic (PBPK) modelling and Physiomics' SystemCell technology which can determine and predict optimum drug levels. In the collaboration with Cronos, Physiomics will use its novel in silico technology to select optimal targets for the highly-selective GeneICE technology from Cronos. The partners will then co-develop the lead GeneICE constructs. Physiomics gained assignment of the UK patent to its SystemCell simulation technology in December. Formal registration of the UK patent is expected to strengthen the Company's commercial position, and allow Physiomics to exploit the full potential of SystemCell. Financial results Due to the Bayer collaboration, which includes an upfront technology access fee spread over the contract period, sales rose from £30,000 in the corresponding period last year to £96,000, an increase of over 200%. Turnover of £37,000 in the prior year period included £7,000 of grants. Before one-off costs, loss at the operating level was £236,000. This low operating loss shows the potential profit gearing inherent in the business model of a low fixed cost base with outsourcing on specific projects. The Company ended the period with net assets (mainly IPO proceeds) of £540,000. Research and development costs increased in the second quarter as a major science project was initiated at Barcelona University with a leading systems biology group under Professor Marta Cascante, a member of the Physiomics Scientific Advisory Board. This has already yielded significant data on the biochemistry of cancer cell growth which will be invaluable in the Company's current research programme and also in marketing activities. Board developments The Company welcomed three new Board members in the period: Professor David Fell, who has been associated with the Company since 2001, as Science Director and two non executive Directors, Dr Paul Harper and Mr John Pool. Mr Pool is Chairman of EiRx Pharma Limited, the parent company of Physiomics, and represents EiRx Pharma Limited on the Physiomics Board. Post period events and outlook for the second half The Board believes that the business is well placed to benefit from the increasing interest in systems biology and in silico approaches to pharmaceutical drug development. The AIM listing provides an excellent basis for further business development and expansion. The Company is now actively, but carefully, utilising the IPO proceeds to invest in product development and has retained a specialist pharmaceutical business development consultancy to drive marketing in the USA and Europe. A further highly experienced simulation scientist, expert in modelling cell growth and division, joined the development team from a leading German laboratory in January. Physiomics is also fortunate to have recently recruited a senior software expert in systems biology to further develop its SystemCell technology. This technology is being developed to grow populations of virtual cancer cells in order to optimise clinical trial design. In the second half, it is expected that revenues will be broadly in line with the first half whilst ongoing operating expenses will rise due to listed company costs, external science contracts and additional product development. However, apart from controlled outsourced and marketing investment, the cost base should then stabilise from the last quarter of the current financial year onwards to give a solid platform for growth. Dr. Stephen B. Parker Chairman 18th March 2005 Unaudited Profit and Loss Account for the six months ended 31 December 2004 Notes 6 months to 6 months to 31.12.2004 31.12.2003 £ 000 £ 000 Turnover (sales and grants) 96 37 Operating loss (236) (15) Loss on ordinary activities before (236) (15) financing costs Net finance income - - Loss on ordinary activities before (236) (15) taxation Taxation - - Loss on ordinary activities after taxation (236) (15) Dividends - - Retained loss (236) (15) Earnings (loss) per 1 (0.132) (0.009) share, p Unaudited Balance Sheet as at 31 December 2004 Notes 31.12.04 31.12.03 30.06.04 £ 000 £ 000 £ 000 Fixed assets Tangible fixed assets 12 3 13 Intangible fixed assets 56 70 58 Current assets Debtors 2 384 76 13 Cash at bank 3 437 - 9 821 76 22 Current liabilities Creditors falling due within one year (349) (286) (447) Net current assets/(liabilities) 472 (210) (425) Net assets/(liabilities) 540 (137) (354) Capital and reserves Called up share 4 97 67 67 capital Share premium 5 1,305 205 205 account Profit and loss account (862) (409) (626) Total shareholders funds 540 (137) (354) Unaudited Cash Flow Statement for the six months ended 31 December 2004 Notes 6 months to 6 months to 31.12.04 31.12.03 £ 000 £ 000 Cash outflow from operating activities (700) (5) Taxation - - Purchase of tangible fixed assets (1) - Management of liquid resources Cash held on short term deposit (400) - Cash outflow before financing (1,101) (5) Financing Net proceeds of share issues including IPO 1,129 - Increase/(decrease) in cash in the period 28 (5) Notes to the financial information 1) The calculation of (loss) per ordinary share is based on 2004 loss per accounts of £236,000 and weighted average number of shares of 178,306,717. 2003 loss per accounts was £15,000 and the weighted average number of shares in issue was 167,850,900. At the time of the IPO, the existing share capital was sub-divided and each ordinary share of 1 pence was divided into 25 ordinary shares of 0.04p. The EPS calculations show the 2003 loss per share on a comparable basis, as though the shares had been sub-divided in 2003 2) The company achieved an AIM listing in December 2004 and raised £750,000 gross. As at 31 December 2004, £445,000 had been received. The remaining £ 305,000 was included under debtors, and has subsequently been received. 3) Cash at bank as at 31 December 2004 includes £400,000 held on short term deposit 4) In addition to the new money raised, inter-company charges, creditors and loans amounting to £618,000 were converted into equity in the period 5) Adviser fees and other costs of the IPO process amounted to £239,000 and the whole of this amount has been charged to the Share Premium account The comparative figures for the year to 30 June 2004 are abridged from the accounts for that year and do not constitute full accounts within the meaning of Section 240 of the Companies Act 1985 (as amended). Statutory accounts for that period, on which the auditors gave an unqualified opinion, have been delivered to the Registrar of Companies. This interim report has been prepared in accordance with accounting policies adopted in the most recent published accounts. The report has been neither audited nor reviewed by Grant Thornton, our auditors.

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