Interim Results
PRESS RELEASE
30th September, 2008
RESULTS FOR THE SIX MONTHS ENDED 3Oth JUNE 2008
HIGHLIGHTS
I am pleased to set out below the full text of the Company's half yearly
statement which was released to the Stock Exchange on 30th September, 2008. The
main events of the period can be summarised as follows :
* Commercial
* Thermo Fisher Sciences Inc. licences TMT® reagents.
* Successful launch and commencement of shipping TMT® products in June, 2008.
* Major TMT® marketing campaign in USA and Europe. Strong second half uptake
and demand.
* Allowance of TMT2 patent in USA.
* Focus on custom applications of TMTcalibratorâ„¢ and TMT Reference Materialsâ„¢.
* ProteoSHOP® to launch novel screening products in early 2009.
* Three grants approved totalling €1.3m.
* Convincing progress from external stroke panel evaluation.
* Conversion of stroke research programme to commercial licences underway.
* Raised AD licensing interest and discussions.
* Financial
*
+ Unaudited revenue in period rose 409% over 2007 to £0.81m (2007 : £
0.20m).
+ Sharp reduction in cash burn to £1.38m (2007 : £2.02m).
+ Reduced loss for period £2.29m (2007 : £2.32m).
+ Level of costs unchanged in second half.
* Outlook
*
+ First major step in realising value from IP portfolio through TMT®
license.
+ Key milestone to provide strong cash flow from TMT® reagents until
2021.
+ Strong revenue growth from ProteoSHOP®, custom TMT® applications and
assay development.
+ Commercial interest in biomarker licenses stimulated by results from
technology developments.
+ High confidence in future prospects and set to build further on revenue
platforms now firmly established.
Commenting on these results, Christopher Pearce, Chief Executive of Proteome
Sciences, said:
"Our main corporate goal was achieved in the first half of the year with the
completion of an outstanding license agreement with Thermo Fisher Scientific
Inc. for global distribution of TMT® catalogue products. Following the
successful launch of TMT® in June, we are delighted by the uptake and the major
international marketing drive being undertaken by Thermo Fisher.
"This now enables us to more fully concentrate our efforts to exploit and
develop further custom applications for isobaric mass tags, in particular rapid
assay development, and to apply the technology in our own biomarker programmes
and through the ProteoSHOP® services division.
"The introduction of our universal reference standards and internal controls
will be the driving force behind clinical proteomics, the application of these
technologies in biological samples in clinical settings, and these will have a
profound effect across drug development, disease management and personalised
medicine, opening up significant new opportunities and revenues for the
Company."
ENDS
Attached: Full text of Chairman's statement, consolidated profit and loss
account, consolidated balance sheet, consolidated cash flow statement and notes
to the financial information.
For further information please contact:
Proteome Sciences plc
www.proteomics.com Tel: +44 (0)1932 865065
Christopher Pearce, Chief Executive James Malthouse, Finance Director
Email: christopher.pearce@proteomics.com Email: james.malthouse@proteomics.com
Public Relations
IKON Associates Coast Communications
Adrian Shaw Matt Baldwin
Tel: +44 (0)1483 535102 Tel: +44 (0)1233 503200
Mobile: +44 (0)797 9900733 Mobile: +44 (0)7930 439739
Email: adrian@ikonassociates.com Email: matt@coastcommunications.com
Nominated Adviser
Landsbanki Securities (UK) Ltd.
Shaun Dobson / Claes Spång Tel: +44 (0)20 7426 9000
Notes to Editors:
About Proteome Sciences:
Proteome Sciences plc (LSE : PRM) is a global leader in applied proteomics,
using high sensitivity proprietary techniques to detect and characterise
differentially expressed proteins in diseases for diagnostic, prognostic and
therapeutic applications.
ProteoSHOP® provides integrated proteomic services for biomarker discovery,
validation and measurement in clinical trials and in vitro diagnostics. Key
features include the proprietary isobaric tandem mass tag technology TMT® for
accurate and reliable biomarker quantification and the ability to rapidly
develop highly reproducible quantitative biomarker assays.
The main focus of its research addresses neurological, oncology and
cardiovascular conditions and has discovered blood biomarkers in stroke, brain
damage, solid organ transplant rejection and Alzheimer's disease. Proteome
Sciences is based in Cobham, UK with facilities in London and Frankfurt.
Chairman's Statement :
Reagents
The exclusive license agreement concluded with Thermo Fisher Scientific Inc.
for our isobaric tandem mass tagging technology (TMT®) was the most significant
event for the Company in the first half of 2008. This has transformed its
prospects and will provide long term revenue from a range of applications
including healthcare, life sciences, biotechnology and environmental.
Proteome Sciences manufactures the TMT® reagents exclusively for Thermo Fisher
Scientific which markets and sells the products globally. Under the terms,
Proteome Sciences receives a mixture of signature fees, contract manufacturing
payments and royalties on sales with additional sales milestones from the
license. Thermo Fisher Scientific completed the successful launch and started
shipping TMT® products following the ASMS meeting for mass spectrometry in
Denver, USA in June. Only part of the signature fee was reflected in first half
revenue and the broader cash flow benefits from TMT® reagents will become
increasingly visible as we move into 2009. Proteome Sciences retained the use
of TMT® for custom labelling services through its ProteoSHOP® division and for
its own research.
The earliest TMT® patents extend to 2021 and the license enables Thermo Fisher
Scientific to provide third party commercial licenses for use of any type of
isobaric tandem mass tags. In June, Proteome Sciences was issued a Notice of
Allowance for its US patent application "Mass Labels" Serial No. 10/489/341
(TMT2) for its tandem mass tags. This followed the grants of corresponding
cases in Europe and the other main jurisdictions.
TMTcalibratorâ„¢ and TMT Reference Materialsâ„¢ deliver high value, high volume
bespoke applications that address and open up substantial new markets and
opportunities and are predicted to bring considerable additional revenue as the
pharmaceutical industry and its regulators require increasing access to
technologies that improve the quality and throughput of biomarker discovery,
validation and assay development. The wider use profile further increases the
potential market size and value for TMT® and the field of isobaric tandem mass
tagging over the patent lives, with the bespoke ProteoSHOP® tagging
applications generating higher returns than the catalogue sales.
Since the launch of TMT® at ASMS, Thermo Fisher Scientific is actively
marketing the TMT® range with full page adverts in key journals including
Proteomics, Journal of Mass Spectrometry, Science, Molecular and Cellular
Proteomics, Nature Methods and Journal of Proteome Research in the second half
of 2008. An extensive road show is underway in the USA to most of the major
commercial and academic customers with a similar programme planned in Europe.
The marketing campaign has been further supported by high profile presentations
and scientific papers/abstracts from peer leaders across a range of different
applications and settings. These have confirmed and further demonstrated the
outstanding performance of TMT® and were extensively highlighted at the 8th
Genome to Proteome Meeting, in Siena in September. Copies of these papers/
abstracts are available on the company's website www.proteomics.com.
Cellzome AG, one of the global leaders in proprietary chemical proteomics for
protein-drug and protein-protein interactions switched to using TMT® in April
and has since announced research alliances with major pharmaceutical companies.
These factors have combined to establish a strong demand and uptake for TMT® in
the second half and the rising visibility of isobaric mass tags which will
become increasingly apparent in future revenues.
Other than the TMT® reagents, Thermo Fisher Scientific's license encompasses
Proteome Sciences' granted patents for TMT® across isobaric tagging. The
catalyst created by the recent proposed acquisition of ABI by Invitrogen may
accelerate the uptake of third-parties taking licenses for the use of any type
of isobaric tandem mass tags and such licenses would provide substantial
additional revenue.
ProteoSHOP®
Our ProteoSHOP® services division in 2007 raised its profile and penetration as
a result of increased marketing principally through attendance at the major
biomarker business and scientific meetings in the USA and Europe and also
through the trade press and publication in scientific journals.
The process has continued in the current year and has been considerably
assisted by the addition of TMTcalibratorâ„¢ and TMT Reference Materialsâ„¢, the
customised labelling services and products of the ProteoSHOP® services
division, following Thermo Fisher Scientific's launch of TMT® catalogue
reagents at ASMS, Denver, USA in June. This has been reflected with a
corresponding sharp rise in the level of enquiries and quotations requested.
Proteome Sciences can now focus its full attention on the bespoke application
of TMTcalibratorâ„¢ and TMT Reference Materialsâ„¢ and these are predicted to add
considerable additional revenue as the pharmaceutical industry and its
regulators require increasing access to technology that improves the quality
and throughput of biomarker development, validation and assay development.
Until now, custom applications have not been available and these should
considerably expand the market size of isobaric mass tagging and provide
appreciably higher returns than the TMT® catalogue reagents, opening up
substantial new markets and opportunities. Like TMT®, these revenues will
become increasingly evident going into 2009. Within this context, multiplex
assays using TMT®-MRM can be rapidly and inexpensively developed in several
months and provide a highly cost-effective alternative to traditional antibody
based immunoassays. The Company is also developing a range of screening
products based on TMTcalibrator™ and TMT®-MRM assay formats with launches
planned in early 2009.
At the 8th Siena Proteomics meeting, impressive data and results were presented
that demonstrated the skill and performance of the ProteoSHOP® services
division. By labelling a reference peptide with different TMT® tags in tissues
and body fluids, it was shown how to rapidly create reproducible calibration
curves covering different dynamic ranges with excellent assay characteristics
matching those of individual ELISA-type assays.
TMT® labelling was also used quantitively to tag the blood levels of the
bacteria associated with meningitis. Quantitative workflows for biomarker
discovery and validation using TMT Reference Materialsâ„¢ from human body fluids
with TMT® revealed how scientists can now establish quality control in their
experiments and share their results worldwide for the first time regardless of
instrumentation or workflow design. The message common to each of the
presentations was that standard/universal references and quality control for
peptides and proteins is now a reality and accessible to customers from the
ProteoSHOP® services division through custom applications of TMT® reagents and
labelling.
Proteome Sciences has been notified that it has been successful in three grant
applications. In May it was selected for the Framework 6 EU programme
SENS-IT-IV and has been awarded a grant of €571,000 over the period to 2010.
The goal of SENS-IT-IV is to replace animal experimentation by in-vitro assays
for skin and respiratory responses relating to the use of safe ingredients by
the chemical, cosmetic and pharmaceutical industries to comply with new EU
legislation for classification and labelling.
The Company has been recruited to a second Framework 6 EU programme Diogenes, a
programme targeting the obesity problem from a dietary perspective and seeking
new insights and new routes to prevention. A grant of €340,000 is expected,
with samples arriving September, 2008.
A third grant has been accepted by the German Ministry of Research (BMBF) in a
chemoproteomics project Bio Tag associated with siRNA model systems. Proteome
Sciences will develop high sensitivity TMT based assays to discover and
validate candidate biomarkers for certain protein kinases in oncology to
support drug development and individual patient therapy. Proteome Sciences will
receive a grant of €390,000. Further grant applications are in process. The
combined grant payments are most welcome since they provide three main
benefits: they make a useful contribution to research costs, they generate
high-profile scientific data and publications and additionally provide
participation in prospective commercial revenues.
Biomarkers
In the last Annual Report and Accounts, we commented that our biomarker
programmes had benefited appreciably from the developments in ProteoSHOP®, in
particular from the application of TMT® workflows and their integration with
other complementary technologies. These demonstrated that in a matter of weeks
it was possible to re-run one of the original sample sets in stroke and to
reproduce the great majority of proteins previously discovered, but at the same
time considerably increasing the total number of differentially expressed
proteins.
The external evaluation of the stroke panel through the earlier research
licenses has progressed convincingly, with recent data lending further support
to the excellent results already generated. We believe that the biomarkers that
we have discovered and extensively validated, and where we have secured a
strong intellectual property position around their utility, resolve the global
requirement for a sensitive stroke test in blood. We expect the major clinical
diagnostics companies with whom we had entered into research licenses to now
progressively convert these into full commercial licenses. We are actively
pushing to expedite and complete this process and these should generate
significant revenue from licensing fees and royalties for the Company.
In order to further extend the coverage on stroke, two sets of exciting new
data were presented at the recent 8th Siena meeting from our collaboration with
the Biomedical Proteomics Research Group, Geneva. In the first study, patients
with stroke aneurismal subarachnoid haemorrhage (aSAH), a devastating event
that accounts for 5% of stroke incidence, were screened for our stroke
biomarkers with the aim of developing a multi-parameter prognostic panel to
facilitate early outcome prediction following aSAH. This study demonstrated the
power of proteomics strategies using TMT® for the rapid discovery of biomarkers
of cerebral injury and highlighted the value of such a multi-parameter panel
with specificity and sensitivity already of 100% and 70% respectively.
A second novel approach was presented using human microdialysates (from the
infarct contralateral and penumbra regions of the brain in-vivo). Such
microdialysates are an extremely rare and highly valuable sample source for the
discovery of protein biomarkers associated to cerebrovascular diseases. Again
using TMT®, it was possible to compare and quantitate the proteins released
around the infarct core compared to the healthy contralateral brain region.
Respectively 18 and 59 of these proteins were significantly increased
confirming a number of proteins previously discovered and patented for stroke
including heart and brain fatty acid binding proteins (H- and B-FABP), GFAP and
cystatin-C. Further validation of the protein marker candidates is underway,
but the results demonstrate the power and performance of such a proteomics
approaches using TMT® isobaric mass tagging.
Since 2007, the high profile failure of several experimental drugs to treat
Alzheimer's disease (AD) in pivital trials has resulted in a marked shift in
the research approach being used to target the disease. The trend has gained
further momentum following some promising results from these other approaches,
with the focus of attention now centering around the proteins Tau and GSK3. The
hyperphosphorylation of Tau proteins and pathways has been at the centre of
Proteome Sciences' AD research over the last four years, with the discovery and
mapping of differentially expressed proteins and over 15 novel phosphorylation
sites in Tau underpinned by a broad intellectual property position. We are
delighted that this appears now to be an area of considerable commercial
interest and we are in discussions with third parties to licence our Alzheimer
biomarkers portfolio. Notwithstanding this, we continue to make good progress
with our AD research programmes at KCL, London and the development of a tau
phospho screening assay that should have considerable utility and value to the
pharma industry.
No material events of significance have taken place at Veri-Q over the period,
however, VIRxSYS Inc., which acquired the assets and IP from Intronn Inc.,
recently provided a very positive scientific update to its Phase 2b clinical
trial in HIV. Shareholders will be notified of further developments
Financial Results
The financial results for the six months to the 30th June, 2008 show a loss for
the period of £2,292,811 compared with £2,320,876 in the corresponding period
in 2007.
Costs, as in previous years, have remained tightly controlled and there has
been a sharp reduction in the cash used in operations which has fallen in the
period from £2,015,909 to £1,383,506. This demonstrates how rapidly the groups'
rate of cash burn has benefited from the increased level of turnover that rose
to £813,420 in the six months to 30th June, 2008 (2007 : £198,718) and from the
continuing non-payment of certain directors salaries. Subject to unforeseen
circumstances, we expect the level of costs to remain broadly unchanged in the
second half of the year.
Three new grants have been approved thus far in 2008 which will provide a
contribution of €1.3m to the Company over their respective durations.
As previously announced, a claim was filed in the District Court of Frankfurt
am Main against Sanofi-Aventis Deutschland GmbH ("Sanofi-Aventis") under which
the Company is seeking damages of up to €30m for the breach of certain
warranties provided by Sanofi-Aventis at the time of the acquisition of
Xzillion Proteomics GmbH & Co KG (now Proteome Sciences R&D GmbH & Co KG) on
4th July, 2002. A date for a hearing has now been arranged for June 2009.
Whilst it is not possible to predict the outcome of this matter, the Directors
are continuing to pursue this action vigorously and will keep shareholders
informed of material developments.
Current Outlook
We regard the achievement of the license agreement with Thermo Fisher
Scientific Inc. in the first half of 2008 as the first major step in realising
some of the value of the Proteome Sciences intellectual property portfolio. As
seen in the interim results, the increased revenue has made a considerable
positive impact on the business, and resulted in a sharp reduction in the rate
of annual cash burn.
The license was a key milestone that should provide strong cash flow to
Proteome Sciences from its isobaric tandem mass tagging technology through to
2021, the earliest expiry of the first TMT® patent. Revenue from TMT® reagents,
custom applications of TMT® and rapid assay development through the ProteoSHOP®
services division should be increasingly visible moving into 2009. This has
been evidenced by the increased levels of enquiries and quotations.
In parallel, the biomarker research programmes have been great beneficiaries of
the technology developments within the ProteoSHOP services division. This has
yielded excellent results and is driving the commercial interest in our
proprietary stroke and AD biomarkers and from which we expect to shortly
conclude licenses and revenue.
The emerging profile and importance of biomarkers makes us believe that we can
build further on the excellent performance achieved in the first half of 2008
and we remain highly confident about our future prospects.
R.S. Harris 30th September, 2008
Chairman
Unaudited consolidated income statement
For the six months ended 30th June, 2008
Six months Six months Year ended
ended ended 31st
30th June 30th June December
2008 2007 2007
£ £ £
Continuing operations
Revenue 813,420 198,718 265,593
Cost of sales (200,627) (109,295) (112,976)
612,793 89,423 152,617
Gross profit
Administrative expenses (2,751,726) (2,548,017) (5,449,722)
Share of results of associates (6,947) 62,742 123,928
Operating loss (2,145,880) (2,395,852) (5,173,177)
Investment revenues 5,708 4,021 10,839
Finance costs (247,639) (104,045) (302,095)
Loss before taxation (2,387,811) (2,495,876) (5,464,433)
Tax 95,000 175,000 212,404
Loss for the period from continuing (2,292,811) (2,320,876) (5,252,029)
operations
Attributed to shareholders of the (2,292,811) (2,320,876) (5,252,029)
company
Loss per share
Basic and diluted (1.74p) (1.76p) (3.99p)
Unaudited consolidated statement of recognised income and expense
For the six months ended 30th June, 2008
Six months Six months Year ended
ended ended 31st
30th June 30th June December
2008 2007 2007
£ £ £
Exchange differences on translation of 123,936 76,766 30,773
foreign operations
Net income/(expense) recognised 123,936 76,766 30,773
directly in equity
Loss for the period (2,292,811) (2,320,876) (5,252,029)
Total recognised income and expense for (2,168,875) (2,244,110) (5,221,256)
the period
Unaudited consolidated balance sheet
As at 30th June, 2008
Six months Six months Year ended
ended ended 31st December
30th June 30th June 2007
2008 2007 £
£ £
Non-current assets
Goodwill 4,218,241 4,218,241 4,218,241
Property, plant and equipment 397,201 468,187 438,413
Interest in associates 770,632 818,767 777,577
5,386,074 5,505,195 5,434,231
Current assets
Inventories 190,959 - 106,529
Trade and other receivables 587,011 509,788 562,410
Cash and cash equivalents 108,414 598,173 530,195
886,384 1,107,961 1,199,134
Total assets 6,272,458 6,613,156 6,633,365
Current liabilities
Trade and other payables (1,119,522) (830,662) (1,097,784)
Current tax liabilities (39,691) (13,254) (42,673)
Short-term borrowings (6,583,853) (3,738,644) (5,936,599)
Short-term provisions (1,752,645) (1,069,319) (1,235,039)
Deferred grant income (261,663) (278,697) (261,663)
(9,757,374) (5,930,576) (8,573,758)
Net current liabilities (8,870,990) (4,822,615) (7,374,624)
Non-current liabilities
Deferred grant income (188,043) (188,043) (188,043)
Long-term provisions - (19,460) (36,531)
(188,043) (207,503) (224,574)
Total liabilities (9,945,417) (6,138,079) (8,798,332)
Net (liabilities)/assets (3,672,959) 475,077 (2,164,967)
Equity
Share capital 1,327,236 1,314,654 1,314,654
Share premium account 29,638,138 29,150,563 29,150,563
Equity reserve 1,995,558 1,926,987 1,834,832
Other reserve 10,755,000 10,755,000 10,755,000
Translation reserve 62,334 (15,609) (61,602)
Retained loss (47,451,225) (42,656,518) (45,158,414)
Total (deficit)/equity (3,672,959) 475,077 (2,164,967)
Unaudited consolidated cash flow statement
For six months 30th June, 2008
Six months Six months Year ended
ended ended 31st
30th June 30th June December
2008 2007 2007
£ £ £
Cash flows from operating activities
Cash used in operations (1,383,506) (2,015,909) (4,166,151)
Interest paid (247,639) (104,045) (302,094)
Tax refunded - 300,000 375,010
Net cash outflow from operating (1,631,145) (1,819,954) (4,093,235)
activities
Cash flows from investing activities
Purchases of property, plant and (11,231) (4,813) (23,277)
equipment
Interest received 5,708 4,021 10,839
Net cash outflow from investing (5,523) (792) (12,438)
activities
Financing activities
Proceeds on issue of shares 500,158 - -
New loans raised 647,254 2,113,848 4,301,962
Net cash from financing activities 1,147,412 2,113,848 4,301,962
Net increase/(decrease) in cash and (489,256) 293,102 196,289
cash equivalents
Cash and cash equivalents at beginning 530,195 304,225 304,225
of period
Effect of foreign exchange rate 67,475 846 29,681
changes
Cash and cash equivalents at end of 108,414 598,173 530,195
period
Notes to the unaudited interim results
For six months 30th June, 2008
1. The information for the period ended 30 June, 2008 does not constitute
statutory accounts as defined in Section 240 of the Companies Act 1985. The
financial information for the year to 31st December, 2007 is extracted from the
statutory accounts for that year. These accounts, upon which the auditors
issued an unqualified opinion, and which did not contain any statement under
Section 237(2) of (3) of the Companies Act 1985, have been delivered to the
Registrar of Companies.
The interim financial report has been prepared with accounting policies
consistent with International Financial Reporting Standards.
2. Loss per share from continuing operations
The calculation of the basic and diluted loss per share is based on the
following data:
Unaudited Unaudited Year ended
first half first half 31st
2008 2007 December
2007
Loss
Loss for the purpose of basic loss (2,292,811) (2,320,876) (5,252,029)
per share
being net loss attributable to equity
holders of
the parent
Number of shares No. No.
Weighted average number of ordinary 132,032,294 131,465,447 131,467,466
shares
for the purpose of basic loss per
share
Share options - - -
Weighted average number of ordinary 132,032,294 131,465,447 131,467,466
shares
for the purposes of diluted loss per
share
IAS 33 requires presentation of diluted EPS when a company could be called upon
to issue shares that would decrease net profit or increase net loss per share.
For a loss making company with outstanding share options, net loss would only
be increased by the exercise of out-of-the-money options. Since it seems
inappropriate to assume that the option holders would act irrationally, no
adjustment has been made to diluted EPS for out-of-the-money share options.
Notes to the unaudited interim results (continued)
For six months 30th June, 2008
3. Note to the consolidated cash flow statement
Unaudited Unaudited Year ended
first half first half 31st
2008 2007 December
£ £ 2007
£
Operating loss (2,145,880) (2,395,852) (5,173,177)
Adjustments for:
Depreciation of property, plant and 83,889 83,132 172,060
equipment
Share of loss /(profit) of associates 6,947 (62,742) (123,928)
Share-based payment expense 160,725 131,016 468,118
Operating cash flows before movements (1,894,319) (2,244,446) (4,656,927)
in working capital
Increase in inventories - - (106,529)
(Increase)/decrease in receivables (41,654) 39,211 (19,096)
Increase in payables 588,998 219,147 629,152
Decrease in provisions (36,531) (29,821) (12,751)
Cash used in operations (1,383,506) (2,015,909) (4,166,151)
4. Consolidated statement of changes in equity
Six months Six months Year ended
ended ended 31st
30th June 30th June December
2008 2007 2007
£ £ £
Total recognised income and expense for (2,168,875) (2,244,110) (5,221,256)
the period
Effect of share-based payment 160,725 131,016 468,118
adjustment
New share capital subscribed (net of 500,158 - -
issue costs)
Equity shareholders' funds brought (2,164,967) 2,588,171 2,588,171
forward
Equity shareholders' funds carried (3,672,959) 475,077 (2,164,967)
forward
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