Final Results

RNS Number : 9446P

Physiomics PLC

11 October 2011

 



Physiomics Plc ("Physiomics" or "the Company") Final Results for the year ended 30 June 2011 Chairman's Statement Summary of Results in the year ended 30 June 2011 •               Successful fundraising in early 2011 generated cash of £600,000 before issue expenses •               The turnover of the Company decreased to £53,345 (2010: £152,694) •               The operating loss was £693,795 (2010: £393,010) •               On 30 June 2011 the surplus of shareholders' funds was £755,511 (2010: £786,825) The increased spend over the past year has largely been the result of further validation studies, which have now paid dividends. As a result of the validation study we performed in collaboration with Oncodesign, we have shown that our technology can make the difference between success and failure of a new drug, by increasing its effectiveness. As a result of this breakthrough, and our business development efforts, we believe we have the best pipeline of interest and active enquiries that we have seen in the Company's history to date. In addition, we have ·      Undertaken projects in conjunction with major pharmaceutical companies to demonstrate the capabilities of our model to advance their particular development programmes. We hope to be able to publish the results of these studies shortly. The recently published data involving compounds from Eli Lilly is an example of this. ·      Developed a more flexible menu-based pricing system for clients, including elements of service and licensing. ·      Appointed an US-based business development specialist who is fully familiar with marketing in silico technologies such as ours to pharma industry customers. ·      Had discussions with other significant players in the drug development services space, where collaboration (such as Jubilant) would provide traction in new markets for both parties. ·      Successfully completed a Carbon Trust funded project to develop an advanced fermentation process for a biofuel. This the first non-pharmaceutical application of our technology and represents part of our diversification strategy. ·      Developed a drug combination oncology database, in conjunction with Pharmacometrics Limited, to open a route into the newly developing field of personalised medicine. ·      Continued to investigate M&A opportunities to add either synergistic technologies or wholly new modalities to our Virtual TumourTM model, in order to provide a more comprehensive and holistic approach to addressing the needs of our customer base. We have established a number of small but focused projects designed to evaluate such opportunities. Adoption of new articles of association At the Annual General Meeting on 18 November 2011 shareholders will be asked to approve the adoption of new articles of association to bring them into line with the requirements of the Companies Act 2006. A summary of the changes will be set out in an appendix to the financial statements which will be distributed to all shareholders by 18 October 2011. Dr Paul Harper Non-Executive Chairman Chief Executive Officer's Statement Introduction We believe that the restructuring of the pharmaceutical industry continues to create delays and uncertainty and accordingly formed the view that further technological validation of our Virtual TumourTM platform was required to ignite the interest of the large pharmaceutical companies. We therefore performed a study using two 'standard of care' drugs, in which we demonstrated that scheduling changes predicted by our models led to a 50% increase in the potency of the combination. We also continue to investigate how we could further reduce the amount of experimental data we need to calibrate our models. In order to build the value of Physiomics still further, our growth strategy is now based around three key principles: to increase the scope of our services in terms of modelling in new therapeutic areas; to increase the geographic reach of our technology, especially into the US market; and to provide laboratory-based services to complement our modelling efforts, and/or demonstrate further reductions in the need for experimental calibration. We are actively investigating both organic and corporate (M&A) avenues to achieve this growth and will report on related developments in due course. Technology Development This year saw our Virtual TumourTM technology become fully validated in terms of the accuracy of predictions and also the value added to pre-clinical oncology projects. The results of our collaboration with Eli Lilly were presented in an article for Innovations in Pharmaceutical Technology, which we previously reported on 15 June 2010. The same results were presented as a poster at the AACR meeting in Florida, which we reported on 5 April 2011. This validation study showed that we could accurately predict the outcome of proposed drug schedules 'blindly' i.e. without seeing the final experimental outcome. We then performed a study in collaboration with Oncodesign S.A. to demonstrate that we could actually predict improved outcomes in pre-clinical studies. We reported the results of this study on 1 April 2011. We believe this has proven to be a pivotal study. In addition to saving customers' time and money through reduced drug development time, we have now demonstrated that we could make the difference between success and failure for some drugs by increasing their potency without increasing toxicity. We have established a number of programmes to establish the extent to which in vitro data can be used to provide data to prime the Virtual TumourTM model. This would avoid the need to ask clients for data from unreliable xenograft models, reduce the cost of generating data to drive the models and speed up the drug development process. We believe that such data could give a more accurate read-out of the way a drug interacts with a cancer cell and improve the quality of the forecast data provided by the model. In addition, we initiated a collaboration with Pharmacometrics Limited to design a new database of anti-cancer drugs and therapeutic treatment information aimed at oncology researchers and clinicians. This database, accessible through a web interface, will offer data on more than 130 anti-cancer drugs (small molecules and biologics) on drug combinations and also on several hundred cancer chemotherapy regimens routinely used in the clinic. The database will help the users to determine which standards-of-care should be used in combination with new chemical or biological entities, given the mechanism of action and other PK/PD data. Also, it will allow users to design new combinations and regimens that obey dosing constraints. All of these advances should make our offering more attractive to our customers and increase the clinical relevance of our models. Collaborations Our collaboration with Green Biologics Limited to optimise their biobutanol production process demonstrated our capabilities outside of the pharmaceutical arena. The first phase of this collaboration went well. Physiomics developed a model of microbial populations which can provide input into how best to optimise the fermentation process. Green Biologics are currently testing our models and software developed during the course of the project. Based on this evaluation they will decide how to move this project forward. We also signed a Heads of Terms with Jubilant Biosys and recently executed the full Alliance agreement. Jubilant can now provide a global business development presence for us and also provide a 'one-stop-shop' for delivering predictions to customers, as their capabilities include all of the experimental calibration services that we need. We are also currently looking at other collaboration avenues to enhance our services. In addition, we are in discussions with other companies, where there may be opportunities to co-market our technologies to provide a more comprehensive package and gain presence in territories such as the USA, supported by an established service provider to the pharma sector. Business Development Strategy Building the pipeline of potential customers has been a particular focus of this year. We have undertaken a number of steps to align our offerings more closely with the needs of each potential customer as in almost every case the drug discovery programmes have features that are unique. Moving away from a "one size fits all" approach to a more individual approach reflects the learning gained from very detailed discussions with potential clients, often under the terms of a confidentiality agreement. We have now developed a menu based approach to developing technical solutions and the pricing of our services, leading to a proposal that precisely matches what the customer requires and is transparent in terms of cost. A number of small biotechnology companies are interested in engaging with us when the time is right for their project. In addition, four big pharmaceutical companies are now considering placing projects with us. Whilst there is no guarantee that any of these will sign contracts, we believe that this shows an increased appetite for our offerings based on the further validation work done in the year. It has become clear that additional business development resources are needed to accelerate sales. To that end the Company has entered into consultancy arrangements with a sales executive on the US West Coast. Growth Strategy Our growth strategy is based on achieving three key objectives and these are ·      Expanding the geographic reach and scope of our services. ·      Reducing the amount of experimental data needed to calibrate our models. ·      Investigating which laboratory-based technologies could be brought in-house to broaden and deepen our business offering. Our approach to meeting the first two objectives has been described earlier. We are putting considerable resource into evaluating M&A and joint venture opportunities that will deliver our growth strategy. In addition, our collaboration with Pharmacometrics is our first step towards entering the 'personalised medicine' sector. The aim here is to make our models more specific to certain groups of patients, defined by their biomarker profiles. Outlook The dynamics of the healthcare industry are changing and conventional research and development needs are evolving as political, financial and competitive pressures lead to change. The major restructuring of even the most prominent companies in the sector have been headlined regularly in the press and media. The environment is changing and companies operating within this space need to recognise this fact and adapt their business models to meet new needs and approaches. This has been a key driver for Physiomics where failure to evolve and adapt to meet the new challenge is not an option. Whilst big pharma remains the most likely source of immediate revenues, we believe we have developed a pipeline of potential business opportunities that exceeds anything that we have achieved before. We believe that this is evidence that the evolution of our thinking and our business model is proving to be attractive. We aim to undertake further revenue sharing agreements with the smaller biotech companies, while big pharma are most likely to engage via 'fee-for-service' and platform licensing deals. The Directors believe that the resource devoted to evolving the Physiomics business model was the right strategy and that the Company is very well placed to capitalise on the business opportunities which our pipeline of potential new business represents. Finally, in addition to the traction we have achieved with large pharma, we continue to discuss revenue sharing deals with smaller biotech companies (such as the recently announced deal with ValiRx plc). We believe that this will allow us to build a pipeline of downstream revenues of higher value than could be achieved by fee-for-service payments alone. Dr Mark Chadwick Chief Executive Officer

Income Statement for the year ended 30 June 2011

			Year ended		Year ended
			30-Jun-11		30-Jun-10
			£		£
Revenue			53,345		152,694
Net operating expenses Share-based compensation			(725,746) (21,394)		(495,827) (49,877)
Operating loss			(693,795)		(393,010)
Finance income			7,869		5,360
Finance costs			-		(2,948)
Loss before taxation			(685,926)		(390,598)
UK corporation tax			41,394		23,037
Loss for the year attributable to equity shareholders			(644,532)		(367,561)
Loss per share (pence) Basic and diluted			(0.063)	p	(0.043)	p

Balance Sheet as at 30 June 2011                                       Company Number: 4225086

			Year ended		Year ended
			30-Jun-11		30-Jun-10
			£		£
Non-current assets
Intangible assets			25,759		30,244
Property, plant and equipment			7,473		1,964
Investments			1		1
			33,233		32,209
Current assets
Trade and other receivables			104,703		109,741
Cash and cash equivalents			729,615		780,054
			834,318		889,795
Total assets			867,551		922,004
Current liabilities
Trade and other payables			(112,040)		(114,047)
Deferred income			-		(21,132)
			(112,040)		(135,179)
Total liabilities			(112,040)		(135,179)
Net assets			755,511		786,825
Capital and reserves
Share capital			451,420		399,690
Capital reserves			3,407,100		2,845,612
Retained earnings			(3,103,009)		(2,458,477)
Equity shareholders' funds			755,511		786,825

Statement of changes in equity for the year ended 30 June 2011

		Share	Share-based		Total
	Share	premium	compensation	Retained	shareholders'
	capital	account	reserve	earnings	funds
	£	£	£	£	£
At 30 June 2009	249,856	1,755,713	-	(2,090,916)	(85,347)
Share issue (net of costs) Loss for the year	149,834 -	1,040,022 -	- -	- (367,561)	1,189,856 (367,561)
Share-based compensation	-	-	49,877	-	49,877
At 30 June 2010	399,690	2,795,735	49,877	(2,458,477)	786,825
Share issue (net of costs) Loss for the year	51,730 -	540,094 -	- -	- (644,532)	591,824  (644,532)
Share-based compensation	-	-	21,394	-	21,394
At 30 June 2011	451,420	3,335,829	71,271	(3,103,009)	755,511

Cash Flow Statement for the year ended 30 June 2011

			Year ended		Year ended
			30-Jun-11		30-Jun-10
			£		£
Cash flows from operating activities:
Operating loss			(693,795)		(393,010)
Amortisation and depreciation			6,332		6,298
Share-based compensation			21,394		49,877
Decrease in receivables			13,394		36,729
Decrease in payables			(2,006)		(73,925)
Decrease in deferred income			(21,132)		(72,276)
Cash generated from operations			(675,813)		(446,307)
UK corporation tax received			33,037		19,969
Interest paid			-		(7,912)
Net cash generated from operating activities			(642,776)		(434,250)
Cash flows from investing activities:
Interest received			7,869		5,360
Purchase of non-current assets, net of grants received			(7,356)		(1,432)
Net cash used by investing activities			513		3,928
Cash outflow before financing			(642,263)		(430,322)
Cash flows from financing activities:
Issue of ordinary share capital (net of expenses)			591,824		1,115,296
Net cash from financing activities			591,824		1,115,296
Net (decrease) increase in cash and cash equivalents			(50,439)		684,974
Cash and cash equivalents at beginning of year			780,054		95,080
Cash and cash equivalents at end of year			729,615		780,054

 

Earnings per share

The calculations of loss per share are based on the following losses and numbers of shares.

	2011	2010
	£	£
Loss on ordinary activities after tax	(644,532)	(367,561)
	=============	=============
	No.	No.
Weighted average no of shares:
For basic and diluted loss per share	1,026,913,773	855,464,575
	=================	=================
Basic and diluted loss per share	(0.063p)	(0.043p)
	=================	=================

 

Notes

1. Extract from Annual Report and Accounts

The financial information set out above does not constitute statutory accounts within the meaning of the Companies Act 2006.  

 

2. Basis of preparation

Physiomics Plc has adopted International Financial Reporting Standards ("IFRS"), IFRIC interpretations and the Companies Act 2006 as applicable to companies reporting under IFRS.

3. Report Distribution

Copies of the annual report will be sent to shareholders by 18 October 2011 and will be available for a period of one month to the public at the offices of Physiomics Plc, The Magdalen Centre, Robert Robinson Avenue, Oxford Science Park, Oxford, OX4 4GA, and at the Company's website www.physiomics-plc.co.uk

4. Annual General Meeting

The Annual General Meeting of the Company will be held at the offices of Bircham Dyson Bell, 50 Broadway, London, SW1H 0BL at 10.00 am on 18 November 2011.

Contacts:

Physiomics Plc

Dr Mark Chadwick, Chief Executive Officer, [phone]

WH Ireland Limited

Katy Mitchell         [phone]

 

END

 

 

FR FMMMGNMKGMZG