Interim Results
Aortech International PLC
09 December 2005
For Immediate Release 9 December 2005
AorTech International plc
'AorTech' or 'the Company')
Interim Results for the six months ended 30 September 2005
AorTech International plc, the biomaterials Intellectual Property and Material
Manufacturing Company is pleased to announce its Interim Results for the six
months ended 30 September 2005.
Operational Highlights
• First FDA and European approval achieved for an implantable life
sustaining device utilizing Elast-EonTM
• Significant milestone payment triggered
• Near-term royalty stream anticipated
Financial Highlights
• Turnover of £63,517 (2004: £38,101)
• Loss before taxation of £929,566 (2004: £838,262)
• Net cash of £3,060,660 (2004: £5,030,227)
Commenting on the progress of the Company, Jon Pither, Chairman, said:
'The Group has taken a major step forward with its material licensing business
by achieving FDA approval through a device partner. This licence is expected to
move the Group into its royalty bearing phase in the first quarter of 2006. We
believe that this is the first of numerous applications that the Elast-EonTM
family of polymers will see over the next few years and that the prospects for
the material licencing and supply segment of our business are bright.
Our progress with the development of a more reliable next generation breast
implant device for surgeons and patients continues to exceed our expectations.
The interest we are currently receiving from industry participants provides us
with the optimism that a specific programme for the development of this
technology as part of a strategic relationship will be defined in the
foreseeable future.'
The Group's Interim Report is expected to be sent to shareholders on or around
16 December 2005. Copies will be available free of charge from the Group's
Surbiton office (address below) for a period of one month from 16 December 2005.
For further information please contact:
AorTech International plc
Frank Maguire, Chief Executive 00 1 801 201 4336
Buchanan Communications 020 7466 5000
Ben Willey, Lisa Baderoon, Rebecca Skye Dietrich
Visit AorTech's website at: www.aortech.com
AorTech International plc:
Prestige Travel Suite, Barclays Bank House, 81-83 Victoria Road, Surbiton,
Surrey, KT6 4NS, UK
CHAIRMAN'S STATEMENT
Licensing progress
On 25 November 2005, the Company announced the achievement by one of its
licencees of FDA approval for the first long term implantable, life sustaining
device incorporating Elast-EonTM technology.
This was an important milestone for the Group, not only in financial terms but
perhaps more importantly as validation of the suitability of our polymer
technology for these types of critical applications. It is an indication of
success that the Group has achieved
- technically - by generating superior results when tested against
other commercially available medical polymers;
- operationally - by achieving ISO credentials and performing
consistently well in customer audits of our manufacturing facility, and
- commercially - by negotiating and closing substantive licensing and
supply contracts with medical device partners.
AorTech will continue to defer to its clients' need for confidentiality of the
terms, applications and identification of these clients in existing and future
licences.
Results
For the six months ended 30 September 2005, the Group had a turnover of £63,517,
net operating expenses of £1,045,861 and a loss before taxation of £929,566.
Although turnover increased by 66% over the corresponding period for 2004,
development expenditure increased by £109,566 and the loss before taxation was
£91,304 greater than in the first half-year of 2004. The cash position at
£3,060,660 compares with £5,030,227 at 30 September 2004. The Board believes
that the Group is entering the commercial phase which it anticipates will result
in a reduction in the cash burn during the remainder of the current financial
year. The Group's Australian operation will be moving to new premises during
2006, which will provide an 18% increase in space with a 10% reduction in lease
expense, and client-funded manufacturing expansion is expected to result in an
approximately 65% reduction in unit costs of production.
Breast Implant
The Company believes that the recent mergers and acquisition activity in the
plastic surgery market, along with the anticipated FDA approval of the
gel-filled breast implant in the United States, together have created a market
that is receptive to the first new technology in more than two decades.
AorTech's proprietary polymer, Elast-EonTM, is ideally suited for this purpose.
Progress has been made with the development of a prototype 'generation 5' breast
implant device.
Existing silicone breast implants are prone to shell failures related to stress
fatigue and utilise a gel filler material which requires the use of metal
catalysts. These silicone gels are characterised by substantial levels of
leaching of low molecular weight material which is commonly known as silicone '
gel bleed'. The AorTech implant under development should offer product
reliability advantages through a more robust shell and an Elast-EonTM gel which
is free from metal catalysts and has a greater than 50% reduction in these low
molecular weight materials.
New intellectual property has been filed, scientific papers will shortly be
published in the American Society of Plastic and Aesthetic Surgery publication
Aesthetic Surgery Journal and the Company continues talks with potential
industry partners regarding licensing and co-development options.
Board Changes
I am particularly pleased to announce that the Board has been strengthened by
the recent appointment of Eddie McDaid and Gordon Wright as Non-Executive
Directors, and I welcome the informed contribution that they will make to the
Company's continuing development.
Summary
The Group has taken a major step forward with its material licensing business by
achieving FDA approval through a device partner. This licence is expected to
move the Group into its royalty bearing phase in the first quarter of calendar
year 2006. We believe that this is the first of several applications that the
Elast-EonTM family of polymers should achieve over the next few years and we are
confident that the prospects for the material licensing and supply segment of
our business are bright.
Our technical progress with the development of a safer breast implant device for
surgeons and patients continues to exceed our expectations. The interest we are
currently receiving from a number of industry participants provides us with the
optimism that a long term programme for the development of this technology will
be defined in the foreseeable future.
Jon Pither
Chairman
9 December 2005
AORTECH INTERNATIONAL PLC
CONSOLIDATED PROFIT AND LOSS ACCOUNT (unaudited)
six months six months year
ended 30 ended 30 ended
september 2005 september 31 march
2004 2005
Note £ £ £
Turnover 63,517 38,101 136,958
Cost of sales (28,675) (8,929) (31,339)
Gross profit 34,842 29,172 105,619
Net operating expenses (1,045,861) (976,958) (2,189,908)
Net operating expenses include:
Development expenditure (396,986) (287,420) (653,896)
Amortisation of intangible fixed
assets (49,697) (46,427) (94,589)
Group operating loss (1,011,019) (947,786) (2,084,289)
Loss on ordinary activities before
interest (1,011,019) (947,786) (2,084,289)
Interest receivable 81,453 109,524 216,899
Loss on ordinary activities before
taxation (929,566) (838,262) (1,867,390)
Taxation - - -
Loss for the financial period (929,566) (838,262) (1,867,390)
Loss per ordinary share 3 (24.40p) (22.00p) (49.01p)
All of the turnover and operating losses are derived from continuing
operations
STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES
Loss for the financial period (929,566) (838,262) (1,867,390)
Currency translation differences arising on
consolidation 105,538 (66,209) (45,215)
Total recognised losses (824,028) (904,471) (1,912,605)
CONSOLIDATED BALANCE SHEET (unaudited)
30 september 2005 30 september 2004 31 march 2005
£ £ £
Fixed assets
Intangible assets 1,480,441 1,474,060 1,449,366
Tangible assets 205,631 206,722 189,678
1,686,072 1,680,782 1,639,044
Current assets
Stocks 115,791 50,744 68,852
Debtors 289,311 296,492 278,948
Cash at bank 3,060,660 5,030,227 4,015,126
3,465,762 5,377,463 4,362,926
Creditors: amounts falling due within
one year (322,352) (396,601) (348,460)
Net current assets 3,143,410 4,980,862 4,014,466
Net assets 4,829,482 6,661,644 5,653,510
Capital and reserves
Called up share capital 9,525,695 9,525,695 9,525,695
Share premium account - 63,359,594 -
Other reserve (2,003,143) (2,003,143) (2,003,143)
Profit & Loss account (2,693,070) (64,220,502) (1,869,042)
Equity shareholders' funds 4,829,482 6,661,644 5,653,510
CONSOLIDATED CASH FLOW STATEMENT
(unaudited)
Note six months six year ended
ended months ended 31 march
30 september 30 september 2005
2005 2004
£ £ £
Net cash outflow from operating
activities (1,015,153) (1,029,725) (2,139,103)
Returns on investment and
servicing of finance 81,453 109,524 216,899
Taxation - - -
Capital expenditure and financial
investment (35,590) (11,374) (28,000)
Cash outflow before management of
liquid resources and financing (969,290) (931,575) (1,950,204)
Management of liquid resources 938,938 924,297 1,994,364
Increase / (decrease) in cash in
the period 4 (30,352) (7,278) 44,160
NOTES TO THE INTERIM FINANCIAL STATEMENTS (unaudited)
FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2005
1. BASIS OF PREPARATION
The interim financial statements have been prepared in accordance with the guidance published
by the Accounting Standards Board and on the basis of the accounting policies set out in the
Group's 2005 statutory accounts.
The interim financial statements were approved by a duly appointed and authorised committee
of the Board of Directors on 2 December 2005 and are unaudited.
The information shown for the year ended 31 March 2005 does not constitute statutory accounts
within the meaning of section 240 of the Companies Act 1985 and has been extracted from the
full accounts for the year ended 31 March 2005 which have been filed with the Registrar of
Companies. The report of the auditors on those accounts was unqualified and did not contain
a statement under either section 237(2) or section 237(3) of the Companies Act 1985.
2. SEGMENTAL ANALYSIS BY CLASS OF BUSINESS AND GEOGRAPHICAL AREA
(a) class of business The Group operates in one class of business, being the development
and exploitation of a range of innovative biomaterials.
(b) geographical area The analysis by geographical area of the Group's
turnover, loss
before tax and net assets is set out below:
six months ended six months ended year ended
30 september 2005 30 september 2004 31 march 2005
sales by sales sales by sales by sales by sales by
destination by destination origin destination origin
origin
(i) turnover £ £ £ £ £ £
Geographical segment
United Kingdom 23,073 - - - 13,024 -
Rest of Europe 8,079 - - - - -
Rest of World 32,365 63,517 38,101 38,101 123,934 136,958
63,517 63,517 38,101 38,101 136,958 136,958
(ii) Loss before six months six months year ended
taxation ended ended
30 september 30 31 march
september
2005 2004 2005
£ £ £
Geographical segment
United Kingdom (382,150) (391,298) (957,192)
Rest of Europe - - -
Rest of World (628,869) (556,488) (1,127,097)
Loss before interest (1,011,019) (947,786) (2,084,289)
Net interest receivable 81,453 109,524 216,899
Loss before taxation (929,566) (838,262) (1,867,390)
30 september 30 31 march
september
2005 2004 2005
(iii) net assets £ £ £
Geographical segment
United Kingdom 2,856,656 4,772,111 3,733,878
Rest of Europe - - -
Rest of World 1,972,826 1,889,533 1,919,632
4,829,482 6,661,644 5,653,510
3. LOSS PER ORDINARY SHARE
The basic loss per ordinary share is calculated on the loss of the Group of £929,566 for the
six months to 30 September 2005 (six months ended 30 September 2004: loss of £838,262, year
ended 31 March 2005: loss of £1,867,390) and on 3,810,278 (six months ended 30 September
2004: 3,810,278, year ended 31 March 2005: 3,810,278) equity shares.
exchange 30 september
4. ANALYSIS OF NET FUNDS 1 april 2005 cash flow differences 2005
£ £ £ £
Net cash:
Cash at bank and in
hand 4,015,126 (969,290) 14,824 3,060,660
Deposits treated as liquid
resources (3,709,470) 938,938 - (2,770,532)
305,656 (30,352) 14,824 290,128
Liquid resources:
Deposits included in
cash 3,709,470 (938,938) - 2,770,532
Net funds 4,015,126 (969,290) 14,824 3,060,660
This information is provided by RNS
The company news service from the London Stock Exchange
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