Final Results
ReNeuron Group plc
28 June 2006
Guildford, UK: 28 June 2006
ReNeuron Group plc
Preliminary Results for the Year Ended 31 March 2006
Operational Highlights
• Significant progress with late pre-clinical development of lead ReN001
stroke therapy, including repeat efficacy and dose response data and
completion of scale-up to full cGMP(1) standard
• Pre-clinical testing programme for ReN001 cell line approaching completion,
with IND(2) clinical trial application expected by the end of 2006
• Scale-up and pre-clinical development commenced for ReN005 therapy for
Huntington's disease
• Early pre-clinical data presented for ReN004 programme for Parkinson's
disease and ReN003 programme for degenerative diseases of the retina
• Manufacturing and marketing rights licensed to Chemicon, Inc. for
ReNcell neural stem cell lines for non-therapeutic applications
• ReNcell hepatocyte (liver) cell line developed for non-therapeutic
applications
• Cross-licence and cell supply agreements signed with StemCells, Inc.
• Intellectual property portfolio greatly strengthened
Financial Highlights
• Successful flotation on AIM, raising £9.5 million before expenses
• Interim funding of £0.7 million announced today, satisfying outstanding
licence obligation regarding aggregate funds raised by the Company
• Loss for the year of £6.3 million (2005: £3.2 million) after non-cash,
non-recurring exceptional charges of £1.2 million (2005: nil)
• Net cash outflow before cash management and financing items £4.6 million
(2005: £2.7 million)
• Cash and short term investments at 31 March 2006 of £5.1 million
(2005: £0.4 million)
Commenting on the results, Professor Trevor Jones, Chairman, said:
'Over the past year, we have made significant progress towards the execution of
our strategy to exploit the full potential of ReNeuron's stem cell technologies.
Most importantly, we remain on track to achieve our 2006 objective of
submitting an IND application to the FDA for approval to commence human clinical
trials with our lead ReN001 stem cell therapy for disabled stroke patients.
This filing will represent a substantial milestone for the Company and will be a
significant event, we believe, in the wider stem cell field in its efforts to
translate the potential of stem cell science into safe and effective therapies
addressing major unmet medical needs.
We have also been able to demonstrate progress with our other therapeutic
programmes during the year, as well as successfully exploit the near-term
revenue potential of our stem cell lines in non-therapeutic applications. We
look forward to building on the progress made over the past year as ReNeuron
moves towards becoming a clinical stage biotechnology company in one of the most
exciting fields in medicine.'
For further information:
Michael Hunt, Chief Executive Officer
ReNeuron Group plc +44 (0)1483 302560
David Yates
Sarah Macleod
Financial Dynamics - Europe +44 (0)20 7831 3113
Jonathan Birt, John Capodanno
Financial Dynamics - US +1 (212) 850 5755
Chairman's and Chief Executive Officer's Joint Statement
REVIEW OF OPERATIONS
The year ended 31 March 2006 has seen a transformation in the fortunes and
prospects of the Group, with respect to both its research and development
programmes and its financial condition.
ReN001 stem cell therapy for stroke
ReNeuron's most advanced therapeutic programme is its ReN001 stem cell therapy
for disabled stroke patients, a group representing a significant unmet medical
need. During the period, our original ReN001 pre-clinical rodent efficacy data
in stroke were published in the Journal of Experimental Neurology. Importantly,
we were able to replicate these results during the period using ReN001 cells
drawn from production lots manufactured to cGMP standard, equivalent to those
that will be used in clinical trials. These new results also showed a clear
dose-ranging effect, indicating that a higher ReN001 dose has the potential to
reverse both the sensory and motor symptoms associated with stroke disability.
We believe that this is the first time such a dose-ranging effect has been
clearly shown using neural stem cells in a pre-clinical model of a
neurodegenerative condition.
During the year, we have made significant progress in driving ReN001 through an
intensive pre-clinical safety testing programme ahead of our first application
to commence clinical trials with this therapy. In designing this pre-clinical
testing programme, we benefited greatly from input received at meetings taken
with regulatory authorities in the UK, mainland Europe and the US during the
year, including our pre-IND meeting with the US Food and Drug Administration
(FDA) held in July 2005. A pre-IND meeting is a formally minuted precursor to
the filing of an IND application to the FDA, and serves to alert the applicant
to items or concerns that the regulator may have with the proposed therapy, and
which the regulator will consequently expect to have been addressed in the IND
submission. We have been encouraged by the FDA's response at our pre-IND
meeting and by the results of the ReN001 pre-clinical testing programme thus
far, which indicate that our cells are safe when tested across a range of
important in vitro and in vivo studies.
During the year, we have also successfully completed the scale-up and cell
banking of the ReN001 product. One of ReNeuron's key competitive advantages is
the ability of its proprietary c-mycERTAM expansion technology to scale up human
stem cells into a well-characterised, consistent and stable product for
wide-scale clinical use. Master and working cell banks of ReN001 cells have now
been manufactured to full cGMP standard, and fully tested for purity, sterility
and stability. These cell banks contain the vials of ReN001 cells from which
all future clinical and in-market product will eventually be grown. This gives
us the potential to progress our ReN001 stroke therapy to the clinic and beyond
without the need to re-derive ReN001 cells from source material at any stage in
the future, thereby reducing risk, cost and time from the development pathway
for this product.
As a result of the above progress, and subject to successful completion of the
remaining pre-clinical testing programme, we intend to submit an IND application
to the FDA, by the end of 2006, for approval to commence initial human clinical
trials with ReN001.
Other therapeutic and non-therapeutic programmes
We have made considerable progress with our follow-on therapeutic programmes
during the year. In February 2006, we signed a contract with Angel Biotechnology
Holdings plc to scale up our ReN005 stem cell line for Huntington's disease,
initially producing a master cell bank to full cGMP standards. We have already
generated positive pre-clinical efficacy data with this cell line in a
Huntington's disease model, and the ReN005 programme is currently in
pre-clinical development.
During the period, we announced that initial in vivo testing of our ReN004
candidate stem cell lines showed them to have attributes that may favour the
reversal of the neurological deficits seen in Parkinson's disease. Further
pre-clinical studies are underway in appropriate models of this disease. A
further medium term goal with this programme is to develop a delivery system
which will serve to protect the ReN004 cells once implanted.
The early development work associated with our ReN004 programme for Parkinson's
disease and our ReN005 programme for Huntington's disease is being funded in
part under the £2.2 million UK Department of Trade and Industry Technology
Programme grant awarded to ReNeuron and the other consortium members in January
2005.
Shortly after the year end, we also announced initial survival efficacy data
with our ReN003 stem cell therapy programme for diseases of the retina, as well
as signing a collaborative research agreement with the Schepens Eye Research
Institute at Harvard Medical School in Boston to further pursue this programme.
We have made good progress during the period with our ReNcell stem cell lines
for drug discovery applications in the pharmaceutical industry. Shortly after
the year end, we licensed two of our first generation ReNcell neural stem cell
lines to Chemicon International, Inc., a leading US-based provider of biological
products. Under the licence, Chemicon will exclusively manufacture and
distribute the cell lines worldwide for research purposes, providing ReNeuron
with a near-term royalty stream. During the period, we also completed initial
development of a second generation ReNcell hepatocyte (liver) cell line with
high potential utility as a drug toxicology testing and screening tool. We have
generated and presented key functional data relating to this cell line and we
are currently optimising its growth characteristics ahead of seeking a partner
to launch the line commercially.
Other activities
In July 2005, we signed a landmark cross-licence with StemCells, Inc., a leading
US, NASDAQ-quoted adult stem cell development company. In April 2006, we signed
a further agreement with StemCells providing for ReNeuron to supply StemCells
with cell lines generated using our c-mycERTAM stem cell expansion technology,
for use in StemCells' areas of therapeutic focus. These cell lines will be
produced to standards appropriate for clinical and commercial use, and ReNeuron
will derive a commercial return from the supply of the cell lines.
During the period, we have continued to strengthen our intellectual property
position. In January 2006, we received a Notice of Allowance from the US
Patent and Trademark Office concerning a key patent application. This
application contains broad claims covering methods of treatment of different
types of brain damage by the transplantation of conditionally immortal3 neural
stem cells, such as those generated by ReNeuron's c-mycERTAM stem cell expansion
technology. Equivalent patents to this US application had already been granted
in Europe and other significant territories.
We have filed further patent applications during the year relating to specific
cell lines for both therapeutic and non-therapeutic applications. Our
cross-licence with StemCells, Inc. has also greatly strengthened our overall
portfolio of proprietary and licensed patents covering both neural and other
stem cell types. As a result, the Group remains well-placed to aggressively
protect its stem cell products and technologies from an intellectual property
perspective as those products move towards commercialisation.
In August 2005, we successfully floated the Company on the London AIM market,
raising £9.5 million before expenses from both UK and US institutional investors
and making ReNeuron the only publicly-quoted adult stem cell company in the UK.
As part of the flotation, warrants were also issued on the basis of one warrant
for every two new Ordinary shares, exercisable at 30p per share by 12 February
2007.
In April 2006, we announced our intention to raise further funds through an
institutional placing. The resolutions pertaining to this proposed funding were
carried at an Extraordinary General Meeting of the Company held on 28 April
2006. We have, however, decided to defer the bulk of these fundraising efforts
pending further progress with the ReN001 stroke programme later this year, most
notably the filing of the IND application for this programme. We believe that
this will offer the Company a greater opportunity to raise the funds required
for the early clinical phase of the stroke programme on terms less dilutive to
existing shareholders. In the meantime, we have today announced a small interim
funding of £0.7 million at a narrow discount to current mid-market price. This
interim funding, when combined with the funds raised on flotation, will satisfy
an outstanding licence obligation regarding aggregate equity funds raised by the
Company.
During the year, we have restructured the Board of the Company to reflect its
public company status. As a result, Bill Edge and Mark Clement stepped down
during the period and we welcomed Dr Paul Harper to the Board. We intend to
make further appointments to the Board and senior management team in due course,
reflecting the ongoing transition of the Company from a research-centred
organisation to a product-focused, clinical stage enterprise.
SUMMARY OF RESULTS
In the year ended 31 March 2006, the Group recorded turnover of £9,000 (2005:
£3,000), principally representing sub-licence income arising from the
out-licensing of a non-core patent jointly owned by the Group and a UK academic
institution.
Net operating expenses before exceptional items increased in the period, as
expected, to £5.9 million (2005: £3.4 million). Of this increase, £1.9 million
relates to research and development costs which increased to £4.3 million (2005:
£2.4 million) in the period, principally due to the late pre-clinical
development costs associated with the ReN001 stroke programme. The balance of
the increase in operating expenses relates to general and administration costs
which increased by £0.6 million to £1.6 million (2005: £1.0 million) in the
period. Again, this increase was expected, and was largely attributable to
costs associated with business development activities during the period, as well
as incremental costs associated with the Company's newly acquired public status
following its flotation.
Exceptional charges in the period totalled £1.2m (2005: £nil). Of these, £0.9
million relates to a provision against the intangible asset arising from the
licence granted to ReNeuron in July 2005 to certain patents and intellectual
property owned by StemCells, Inc. Based upon an impairment review, the
directors believe that it is appropriate to fully provide against this asset,
given the early stage nature of the technologies to which this licence relates.
The £0.3 million balance of exceptional charges in the period relates to
non-recurring net charges associated with the cancellation and re-issue of
employee share options.
Other operating income increased to £270,000 in the period (2005: £43,000),
representing grant income recognised as the Group's UK DTI Technology Programme
stem cell grant was initiated.
Interest receivable increased to £197,000 in the period (2005: £53,000), due to
interest earned on proceeds from the Company's flotation. Interest payable in
the period totalled £250,000 (2005: £250,000), representing the premium payable
on short term debt issued prior to the Company's flotation.
Tax credits booked against research and development expenditure increased to
£0.5 million in the period (2005: £0.3 million), reflecting the Group's
increased research and development expenditure during the period.
The resulting loss for the financial year increased to £6.3 million (2005: £3.2
million), with £1.2 million of the increase attributable to the non-recurring,
non-cash exceptional charges explained above.
Net cash outflow before management of liquid resources and financing increased
to £4.6 million (2005: £2.7 million) in the period. This was due to the increase
in underlying operating expenses, offset in part by increases in other operating
income, interest received and short term creditors and accruals in the period.
The increase in creditors and accruals of £0.7 million in the period reflects a
general increase in research and development activity in the period and also
ReN001 pre-clinical development work contracted for and undertaken in the period
but not billed or paid for as at 31 March 2006.
The Group had cash and short term investments totalling £5.1 million as at 31
March 2006 (2005: £0.4 million). The increase is largely due to net flotation
proceeds of £8.3 million received in the period, together with a further £1.25
million of short term debt financing, including premium, which converted to
equity on the Group's flotation in August 2005. The directors estimate that the
Group's current cash resources, including the funding announced today, are
sufficient to meet expenditure requirements into the second quarter of 2007.
The directors are confident of raising further funds subsequent to the IND
application for ReN001 towards the end of 2006. Consequently, the going concern
basis has been adopted in the preparation of the preliminary announcement.
SUMMARY AND OUTLOOK
ReNeuron has developed and maintained a clear strategy to exploit the full
potential of its stem cell platform technology in therapeutic areas offering the
best chances of clinical benefit and commercial return. Over the past year, we
have made significant progress towards the execution of this strategy. Most
importantly, we remain on track to achieve our 2006 objective of submitting an
IND application to the FDA for approval to commence human clinical trials with
our lead ReN001 stem cell therapy for disabled stroke patients. This filing
will represent a substantial milestone for the Company and will be a significant
event, we believe, in the wider stem cell field in its efforts to translate the
potential of stem cell science into safe and effective therapies addressing
major unmet medical needs.
We have also been able to demonstrate progress with our other therapeutic
programmes during the year. Furthermore, we have successfully exploited the
near-term revenue potential of our stem cells in non-therapeutic applications,
culminating in the first commercial licence of our ReNcell range of stem cell
lines, to Chemicon, Inc., in April 2006.
We look forward to building on the progress made over the past year as ReNeuron
moves towards becoming a clinical stage biotechnology company in one of the most
exciting fields in medicine.
Professor Trevor Jones Michael Hunt
Chairman Chief Executive Officer
28 June 2006
1. Current Good Manufacturing Practice
2. Investigational New Drug
3. Conditionally immortal stem cells are those that, through modification, are
capable of dividing indefinitely in vitro to produce stem cell lines, but
whose division can be fully arrested by various means, such as removal of
certain constituents present in the cell culture media.
4. The terms 'ReNeuron', 'the Company' or 'the Group' used in this statement
refer to ReNeuron Group plc and/or its subsidiary undertakings, depending
on the context.
Consolidated profit and loss account
for the year ended 31 March 2006
Year ended Year ended
Note 31 March 31 March 2005
2006 Audited
Unaudited £'000
£'000
Turnover 9 3
Cost of sales - -
Gross profit 9 3
______ ______
Net operating expenses excluding exceptional items 2 (5,885) (3,382)
Exceptional operating costs 3 (1,167) -
______ ______
Net operating expenses including exceptional items (7,052) (3,382)
Other operating income 270 43
______ ______
Operating loss (6,773) (3,336)
Interest receivable and similar income 197 53
Interest payable and similar charges (250) (250)
______ ______
Loss on ordinary activities before taxation (6,826) (3,533)
Tax credit on loss on ordinary activities 513 319
______ ______
Loss for the financial year (6,313) (3,214)
______ ______
Loss per 10p ordinary share
Basic and diluted 4 (8.7p) (9.0p)
______ ______
All results arise from continuing operations.
The Group has no recognised gains and losses other than the results above, and
therefore no separate statement of total recognised gains and losses is
presented.
Consolidated balance sheet as at 31 March 2006
2006 2005
Note Unaudited Audited
£'000 £'000
Fixed assets
Negative goodwill 5 (1,421) (1,609)
Tangible assets 1,208 1,383
______ ______
(213) (226)
Current assets
Debtors 1,027 624
Short term investments 6 - 361
Cash at bank and in hand 5,134 70
______ ______
6,161 1,055
Creditors: amounts falling due within one year (1,320) (579)
Convertible loan 7 - (1,250)
______ ______
Net current assets/(liabilities) 4,841 (774)
______ ______
Total assets less current liabilities 4,628 (1,000)
Creditors: amounts falling due after more than one year - (8)
______ ______
Net assets/(liabilities) 4,628 (1,008)
______ ______
Capital and reserves
Called up share capital 8 9,355 3,587
Share premium account 8 5,472 -
Other reserves 8 365 365
Warrant reserve 8 436 -
Profit and loss account 8 (11,000) (4,960)
______ ______
Total equity shareholders' funds/(deficit) 8 4,628 (1,008)
______ ______
Consolidated cash flow statement for the year ended 31 March 2006
Year ended Year ended
Note 31 March 31 March
2006 2005
Unaudited Audited
£'000 £'000
Net cash outflow from operating activities 9 (4,995) (3,150)
Returns on investments and servicing of finance
Interest received 179 50
______ ______
Net cash inflow from returns on investments and servicing of 179 50
finance
______ ______
Taxation
UK corporation tax -- research and development tax credits 329 364
received
______ ______
Capital expenditure
Purchase of tangible fixed assets (92) (27)
______ ______
Net cash outflow from capital expenditure (92) (27)
______ ______
Acquisitions
Refund of VAT on acquisition expenses - 86
______ ______
Net cash inflow from acquisitions - 86
Net cash outflow before use of liquid resources and financing (4,579) (2,677)
______ ______
Management of liquid resources
Decrease in short term investments 10 361 1,615
______ ______
Financing
Increase in loans 1,000 1,000
Issue of ordinary share capital 9,500 -
Share issue costs (1,218) -
______ ______
Increase/(decrease) in cash in the period 10 5,064 (62)
______ ______
Notes to the financial statements for the year ended 31 March 2006
1. Basis of preparation
These preliminary results do not constitute statutory financial statements
within the meaning of Section 240 of the Companies Act 1985. Results for the
year ended 31 March 2006 have not been audited. The results for the year ending
31 March 2005 have been extracted from the statutory financial statements of
ReNeuron Holdings Limited that have been filed with the Registrar of Companies
and upon which the auditors reported without qualification. The statutory
accounts and audit report for the year ended 31 March 2006 have not yet been
signed by the directors or the auditors respectively.
These preliminary results for the year ended 31 March 2006 have been prepared in
accordance with the accounting policies set out in the statutory financial
statements of ReNeuron Holdings Limited for the year ended 31 March 2005. The
following additional accounting policies are applicable to the preliminary
results for the year ended 31 March 2006:
Going concern
The preliminary announcement is prepared on the going concern basis. Should the
Group not be a going concern, the balance sheet would need to be reviewed with
assets restated to net realisable values and all long term assets and
liabilities being reclassified as short-term and provision would be made for
further liabilities that might arise. The Directors estimate that cash held by
the Group at the date of approval of the annual results (which includes cash
received subsequent to the period end) will not be sufficient to continue
funding the trading activities of the Group for a further twelve months from the
date of approval of the annual results. However, the directors are confident of
raising further funds as outlined in the Chairman's and Chief Executive
Officer's Joint Statement. Consequently, the directors have adopted the going
concern basis in the preparation of the preliminary announcement. If further
funds were not to be raised in the ways described, the Company would be unable
to meet its future financial obligations as they fell due.
Basis of consolidation
The consolidated accounts include the financial statements of the Company and
its subsidiary undertakings, made up to 31 March 2006. A reconstruction of the
ReNeuron Group took place during the period, as described below, in preparation
for the admission of the Company's shares to the AIM market of the London Stock
Exchange in August 2005.
The Company was incorporated as MF59657 Limited on 7 June 2005. On 21 June
2005, the Company acquired the entire issued share capital of ReNeuron Holdings
Limited by way of a one-for-one share exchange. On 22 June 2005, the Company
was re-registered as a public limited company and its name was changed to
MF59657 plc and then to ReNeuron Group plc on 23 June 2005.
As a result of the above reconstruction, the results of ReNeuron Holdings
Limited and its subsidiary undertakings have been consolidated using the
principles of merger accounting, and the comparative results have therefore been
presented as if the new group had been established throughout the year to 31
March 2005.
Warrants
Where warrants have been issued together with ordinary shares, the proportion of
the proceeds received that relates to the warrants is determined by reference to
the relative market values of the warrants and options. The proportion of the
proceeds that relates to the warrants is credited to a warrant reserve within
equity shareholders' funds.
2. Net operating expenses excluding exceptional items
Year ended Year ended
31 March 31 March
2006 2005
Unaudited Audited
£'000 £'000
Administrative expenses 1,589 987
Research and development expenditure 4,296 2,395
______ ______
5,885 3,382
______ ______
3. Exceptional operating costs
Year ended Year ended
31 March 31 March
2006 2005
Unaudited Audited
£'000 £'000
Exceptional administrative expenses:
Share option compensation charge 273 -
Exceptional research and development expenditure:
Impairment of intangible assets acquired 894 -
______ ______
1,167 -
______ ______
Share option compensation charge
A charge of £453,000 was made to the profit and loss account in the period,
relating to the grant of replacement options over shares in the Company on
flotation, the charge being the estimated market value of the shares at the date
of grant less the exercise price of the options. This charge was credited back
to the profit and loss account reserve. Similarly, a number of share options
were cancelled during the period. Compensation charges totalling £180,000
previously made in respect of these options were consequently written back to
the profit and loss account in the period, the credits previously made to
reserves in respect of these compensation charges being similarly reversed.
Provision against intangible assets acquired
On 1 July 2005, ReNeuron entered into licence and subscription and share
exchange agreements with StemCells, Inc., whereby the Group was granted a
licence to certain intellectual property and patents owned by StemCells, Inc.,
and pursuant to which the Company issued, as part consideration for the licence,
a total of 8,939,493 ordinary shares of 10p each to StemCells, Inc. Due to the
early stage nature of the underlying technology, the directors have carried out
an impairment review of the intangible asset so created, and consider that it is
appropriate to provide against the asset in full.
4. Loss per share
The basic and diluted loss per share are calculated by dividing the loss for the
financial year attributable to ordinary shareholders by the weighted average
number of ordinary shares in issue during the year. The loss for the financial
year ended 31 March 2006 is £6,313,000 (2005: £3,214,000) and the weighted
average number of 10p ordinary shares in issue during the year ended 31 March
2006 is 72,532,756 (2005: 35,874,704)
Potential ordinary shares are not treated as dilutive as the group has made a
loss in each year.
5. Amortisation of negative goodwill
Negative goodwill arose during the period ended 31 March 2004 on the acquisition
of ReNeuron (UK) Limited by ReNeuron Holdings Limited. The amount of negative
goodwill arising on acquisition was £2,830,000. The amount that was in excess of
the fair values of non-monetary assets acquired was immediately amortised to the
profit and loss account. The remaining negative goodwill of £1,883,000, being
equal to the fair values of non-monetary assets acquired, is being amortised
over a period of 10 years, the period over which the non-monetary assets are
expected to be recovered.
6. Short term investments
Short term investments comprise fixed rate deposits with banks and money market
funds, which are not repayable on demand.
7. Convertible loan
The convertible loan outstanding at 31 March 2005 was an amount payable to
Merlin General Partner II Limited in respect of a bridging loan. The convertible
debt increased to £2,500,000 in the period, including accrued repayment premium,
and was converted into equity on the Group's flotation.
8. Share capital and reserves
Share capital Share premium Other reserves
account account
£'000 £'000 £'000
At 1 April 2005 3,587 - 365
Issue of new ordinary shares 5,768 6,690 -
Issue of warrants - - -
Costs of share issue - (1,218) -
Loss for the financial year - - -
Share option compensation charge - - -
______ ______ ______
At 31 March 2006 (unaudited) 9,355 5,472 365
______ ______ ______
8. Share capital and reserves (continued)
Warrant Profit and loss Total equity
reserve account shareholders'
(deficit)/funds
£'000 £'000 £000
At 1 April 2005 - (4,960) (1,008)
Issue of new ordinary shares - - 12,458
Issue of warrants 436 - 436
Costs of share issue - - (1,218)
Loss for the financial year - (6,313) (6,313)
Share option compensation charge - 273 273
______ ______ ______
At 31 March 2006 (unaudited) 436 (11,000) 4,628
______ ______ ______
On 21 June 2005 the Company issued 35,874,704 ordinary shares of 10p each to the
shareholders of ReNeuron Holdings Limited as part of a one for one share
exchange.
ReNeuron Group plc was admitted to trading on the AIM Market of the London Stock
Exchange on 12 August 2005, raising £9.5 million before costs of £1.2m, placing
38,000,000 new ordinary 10p shares at a price of 25p per ordinary share. At the
same time, the Company issued warrants to subscribers of new ordinary shares on
the basis of one warrant for every two new ordinary shares. Each warrant holder
is entitled to subscribe for ordinary shares at a fixed price of 30p per share.
The warrants expire on 12 February 2007.
A credit was made to the warrant reserve during the period, reflecting the
proceeds received from the issue of the warrants issued at the time of the
Company's flotation. The proceeds attributable to the warrants have been
determined by reference to the relative market values of shares and warrants
following the flotation.
A total of 8,939,493 ordinary 10p shares were issued in relation to the licence
and subscription and share exchange agreements with StemCells, Inc. See Note 3.
A total of 10,666,666 ordinary 10p shares were issued in relation to the
conversion of the debt finance on flotation. See Note 7.
A total of 67,068 ordinary 10p shares were issued in relation to the settlement
of the Merlin fee agreement entered into on 31 March 2000.
Other reserves relates to a merger reserve arising on consolidation, being the
share capital and share premium account balances of ReNeuron Holdings Limited at
1 April 2005 less the nominal value of the shares issued by the Company to
acquire the shares, reflecting the position as if the merger had occurred on 1
April 2005.
9. Reconciliation of operating loss to net cash outflow from operating
activities
Year ended Year ended
31 March 31 March
2006 2005
Unaudited Audited
£'000 £'000
Operating loss (6,773) (3,336)
Depreciation of tangible fixed assets 265 269
Amortisation of negative goodwill (188) (188)
Impairment of intangible assets acquired (see Note 3) 894 -
Loss on sale of fixed assets - 2
Share option compensation charge (see Note 3) 273 -
(Increase)/decrease in debtors (199) 184
Increase/(decrease) in creditors 733 (81)
______ ______
Net cash outflow from operating activities (4,995) (3,150)
______ ______
10. Reconciliation of movement in net (deficit)/funds
At 1 April Cashflow Non cash At 31 March
2005 Movements 2006
Audited Unaudited
£'000 £'000 £'000 £'000
Cash at bank and in hand 70 5,064 - 5,134
Short term investments 361 (361) - -
Convertible loan (1,250) (1,000) 2,250 -
______ ______ ______ ______
Net (debt)/funds (819) 3,703 2,250 5,134
As referred to in Note 7, the convertible loan outstanding at 31 March 2005 was
an amount payable to Merlin General Partner II Limited in respect of a bridging
loan. The convertible debt increased to £2,500,000 in the period, including
£500,000 accrued repayment premium (of which £250,000 was accrued in the year),
and was converted into equity on the Group's flotation.
Note to editors:
ReNeuron is a leading, UK-based adult stem cell therapy business. The Group is
applying its novel stem cell platform technologies in the development of
ground-breaking stem cell therapies to serve significant and unmet or poorly-met
clinical needs.
ReNeuron has used its c-mycERTAM technology to generate genetically stable
neural stem cell lines. This technology platform has multi-national patent
protection and is fully regulated by means of a chemically-induced safety
switch. Cell growth can therefore be completely arrested prior to in vivo
implantation.
The Group's lead stem cell therapy, ReN001 for chronic stroke disability, is in
late pre-clinical development. Subject to successful completion of pre-clinical
testing, the Company plans to file for approval to commence initial clinical
trials in stroke by the end of 2006, with trials commencing as soon as possible
thereafter.
The Group has also generated pre-clinical efficacy data with its ReN005 stem
cell therapy for Huntington's disease, a rare, genetic and fatal
neurodegenerative disorder that affects around 1 in 10,000 people. This
programme is in pre-clinical development.
In addition to its stroke and Huntington's disease programmes, ReNeuron is
developing stem cell therapies for Parkinson's disease, Type 1 diabetes and
diseases of the retina.
ReNeuron has also leveraged its stem cell technologies into non-therapeutic
areas - its ReNcell range of cell lines for use in drug discovery applications
in the pharmaceutical industry.
ReNeuron's shares are traded on the London AIM market under the symbol RENE.L,
and its warrants are traded under the symbol RENW.L.
Further information on ReNeuron and its products can be found at
www.reneuron.com.
This announcement contains forward-looking statements with respect to the
financial condition, results of operations and business achievements/performance
of ReNeuron and certain of the plans and objectives of management of ReNeuron
with respect thereto. These statements may generally, but not always, be
identified by the use of words such as 'should', 'expects', 'estimates',
'believes' or similar expressions. This announcement also contains
forward-looking statements attributed to certain third parties relating to their
estimates regarding the growth of markets and demand for products. By their
nature, forward-looking statements involve risk and uncertainty because they
reflect ReNeuron's current expectations and assumptions as to future events and
circumstances that may not prove accurate. A number of factors could cause
ReNeuron's actual financial condition, results of operations and business
achievements/performance to differ materially from the estimates made or implied
in such forward-looking statements and, accordingly, reliance should not be
placed on such statements.
This information is provided by RNS
The company news service from the London Stock Exchange
Friday, 3rd January 2025
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