Final Results

RNS Number : 8700F

Tissue Regenix Group PLC

04 May 2011

 



Tissue Regenix Group plc

("Tissue Regenix" or "the Group")

Year end results to 31 January 2011

YORK, 04 May 2011 - Tissue Regenix, the regenerative medical devices company, announces preliminary results for the year ended 31 January 2011.

Operational Highlights

·      European approval received for lead product, the dCELL® Vascular Patch. Process of appointing distributors commenced and sales progressing. Initiatives underway to extend the use of the dCELL® Patch into other clinical areas (including cardiac and dura repair)

·      Pilot study to evaluate the use of decellularised human donor skin grafts (dCELL®Human Dermis) in the treatment of chronic, non-healing wounds, initiated by UK development partner NHS Blood and Transplant (NHSBT)

·      Porcine Meniscal repair product pilot programme successfully completed. Pre clinical trials planned for later this year

·      Commercialisation and IP agreement recently signed with our development partners in Brazil, the Pontifical Catholic University of Parana and Cardioprotese Ltd, enabling acceleration of the dCELL® Heart Valve programme and progression of other products at significantly lower cost

Financial Highlights

·      Successfully listed on AIM raising gross proceeds of £4.5m by way of a placing

·      Net loss for year ended 31 January 2011 of £5.4m after tax of which £3.7m is deemed non cash loss arising from the reverse acquisition (2010: loss £0.7m)

·      Cash and short term deposits at 31 January 2011 of £5.9m (2010: £1.1m)

Antony Odell, Tissue Regenix's Managing Director, said: "Tissue Regenix made significant progress during 2010. As well as having our first product approved in Europe, I am pleased to report that we have made major strides in the advancement of our broad pipeline of products which are being developed to address major global markets. Entering our second year as a public company, we believe that we are poised to accelerate towards our goal of becoming a major player in regenerative medicine."

Enquiries:

Financial Dynamics  Ben Atwell / John Dineen	[phone]
Tissue Regenix Group plc Antony Odell	[phone]
Peel Hunt LLP (Nominated Adviser) James Steel / Vijay Barathan	[phone]

About Tissue Regenix

Tissue Regenix, the RegenMed Company, was incorporated in May 2006 to commercialise the academic research of Professor Eileen Ingham and Professor John Fisher from the University of Leeds in the field of tissue decellularisation. Its dCELL® Technology comprises a patented process which removes cells and other components from human and animal tissue allowing it to be used without anti-rejection drugs to replace worn out or diseased body parts.

CHAIRMAN'S STATEMENT

Summary

Tissue Regenix's strategy is to continue to use its core dCELL^® Technology as a platform to develop a range of products using the established medical device regulatory pathway to deliver solutions to unmet clinical needs. The three priority markets for the application of the technology are: Vascular (e.g. Vascular Patches); Cardiac (e.g. Heart Valves); and Orthopaedics (e.g. Meniscus).

Tissue Regenix was formed in 2006 to commercialise innovative new technology in the field of tissue decellularisation developed by Leeds University. Using this proprietary technology platform (dCELL^®) our goal is to build a global leader in the field of regenerative medicine.

The dCELL^® Process

The dCELL^® process involves the creation of biological scaffolds from decellularised human or animal tissue. When implanted into the human body in order to replace damaged or diseased body parts these scaffolds are able to regenerate and become natural parts of the body without requiring anti rejection drugs. Also, because the regeneration process is itself a natural function of the body and on implant the scaffolds are essentially inert and therefore safe, they are therefore classified as medical devices. This means that our products are typically subject to faster and less costly regulatory approval procedures than, for example, pharmaceutical products.

Intellectual Property

dCELL^® technology is a platform from which we are able to develop a number of products in a number of therapy areas. It is protected by a library of patents which form a comprehensive intellectual property portfolio. As we continue to develop we will continue to file for patents in order to protect our growing IP base. As an example, in August 2010 we received two new patents in the USA and Australia.

Product Pipeline

Vascular

In August 2010 we received a CE mark for our first product, the dCELL^® vascular patch, which enables us to begin to commercialise the product within Europe and certain other countries. Since that time we have started to appoint distributors and have excellent clinical trial results to support that effort. In addition we are working on extending the applications for its use to include for example cardiac and dura and will be applying for FDA approval in the USA later this year via 510k. Finally, another vascular product, the Arterial-Vascular graft, which can be used to replace damaged veins and arteries, is currently undergoing preclinical trials. If successful, we are planning a full clinical trial later this year.

Dermis

Towards the end of the financial year we announced that with our UK development partner, NHS Blood and Transplant, (NHSBT) we had initiated a pilot study to evaluate the use of decellularised skin from human donor sources (HdCELL^®) in the treatment of chronic non-healing wounds. These wounds represent a significant burden on global healthcare systems, costing the NHS alone over £1 billion per annum. We are also examining the application of HdCELL^® to burns and for use in plastic surgery. Preliminary work on a porcine version is also underway. 

Orthopaedic

The development of our porcine Meniscal repair product is proceeding well. The pilot programme is now essentially and successfully complete and we are moving to pre clinical trials later this year. At the same time we are planning to begin a pilot study of a porcine ligament repair product. Both products also have an equivalent using human donor tissue and we are examining the possibilities of clinical studies for both.

Cardiac

In April 2011 we announced a major advance in our dCELL^® heart valve development programme. We have entered into a commercialisation and IP agreement with our development partners in Brazil, the Pontifical Catholic University of Parana and Cardioprotese Ltda (Representing Professor da Costa - a leading heart surgeon). This agreement gives us worldwide rights (excluding Brazil) to the clinical data which will support commercialisation of the dCELL^®heart valve and will enable us to accelerate our dCELL^® heart valve programme. In addition, by using the world class facilities available to us in Brazil, we will also accelerate and lower the cost of the development of other products using our proprietary technology.

Thus far over 140 patients have benefitted from being implanted with the human donor dCELL^® heart valve including over 40 aortic valves. A sample of those patients was the subject of a paper published recently in the journal of The Society of Thoracic Surgeons. The findings were most encouraging and we are working with the NHSBT to transfer the technology to the NHS and commercialise it via a licensing programme elsewhere in the world. 

In addition, Cardioprotese have developed a commercially available bioprosthetic bovine heart valve which has over 5 years of clinical data and has been implanted in over 1,200 patients. We are developing a dCELL^® version of this product and we are planning to begin clinical trials within a year.

We are also at an early stage in the evaluation of the possible delivery of dCELL^® heart valves by stent, thus enabling minimally invasive surgical techniques to be used. Finally, we have successfully completed a pilot study of decellularised porcine heart valves and are planning further work prior to a full preclinical study. If successful the development of a decellularised porcine replacement heart valve has the potential to revolutionise this market.

Financial Review

In June 2010 we were admitted to AIM, a market operated by the London Stock Exchange by way of a reverse takeover. As part of the admission, which was achieved in difficult market conditions, we raised £4.5m of new funds to add to the £2.3m brought in via the reverse. In the year to 31 January 2011 we recorded a loss after tax of £5.4m of which £3.7m is a deemed non cash loss arising from the reverse acquisition. Excluding that cost the after tax loss was £1.7m. Net assets increased to £6.2m (2010: £1.3m) mainly reflecting the additional funds raised via the placing. Group cash balances at 31 January 2011 were £5.9m (2010 £1.1m).

The Board

On 29 March 2011 we announced the appointment of Ian Jefferson as Chief Financial Officer. He will commence his appointment within the next six weeks and replaces Mike Bretherton, who will remain as a Non-Executive Director. I would like to thank Mike who has served our needs extremely well as Finance Director since flotation as well as welcoming Ian from COE Group Plc where he was latterly Chief Executive Officer having previously been Chief Financial Officer.

Outlook

Our strategy of working with development partners to create a strong product pipeline at low cost and minimum risk has served us well and we now have a number of exciting products, which address the needs of very large global markets, proceeding rapidly through various regulatory processes. It will of course take time to fully exploit the potential of this pipeline but we have an experienced and talented team working towards that end.

It has been an exciting year in which much has been achieved and we are well on our way to achieving our goal of creating a major player in regenerative medicine.

John Samuel

Executive Chairman

3 May 2011

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

	2011	2010*
	£000	£000
OPERATING INCOME	173	74
Administrative expenses	(2,117)	(877)
Deemed cost on reverse acquisition	(3,749)	-
OPERATING LOSS	(5,693)	(803)
Finance income	28	64
LOSS BEFORE TAXATION	(5,665)	(739)
Taxation	238	75
LOSS AFTER TAX ATTRIBUTABLE TO EQUITY HOLDERS OF THE PARENT	(5,427)	(664)
LOSS AND TOTAL COMPREHENSIVE EXPENSE FOR THE YEAR	(5,427)	(664)
LOSS PER SHARE
Basic and diluted on loss from continuing operations
- Post deemed cost on reverse acquisition	(1.48)p	(0.27)p
- Pre deemed cost on reverse acquisition	(0.46)p	(0.27)p

*Comparative figures are for the six month short accounting period to 31 January 2010.

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

	2011	2010
	£000	£000
ASSETS
Non-current assets
Property, plant and equipment	189	135
TOTAL NON-CURRENT ASSETS	189	135
Current assets
Trade and other receivables	393	255
Cash and cash equivalents	5,889	1,083
TOTAL CURRENT ASSETS	6,282	1,338
TOTAL ASSETS	6,471	1,473
LIABILITIES
Current liabilities
Trade and other payables	(253)	(186)
TOTAL LIABILITIES	(253)	(186)
NET ASSETS	6,218	1,287
EQUITY
Share capital	2,343	600
Share premium	8,655	4,333
Merger reserve	10,884	-
Reverse acquisition reserve	(7,148)	(1,054)
Issue equity capital	14,734	3,879
Share based payment reserve	332	1
Revenue reserve	(8,848)	(2,593)
TOTAL EQUITY	6,218	1,287

CONSOLIDATED STATEMENT OF CASH FLOWS

	2011	2010*
	£000	£000
Operating activities
Operating loss	(5,693)	(803)
Adjustment for non-cash items:
Depreciation of property, plant and equipment	46	18
Share based payment	331	1
Deemed cost of reverse acquisition	3,749	-
Tax refunded	183	-
Operating cash outflow	(1,384)	(784)
(Increase)/decrease in trade and other receivables	(68)	33
Decrease in trade and other payables	(24)	(4)
Net cash outflow from operations	(1,476)	(755)
INVESTING ACTIVITIES
Interest received	28	64
Purchases of property, plant and equipment	(100)	(23)
Net cash (out)/inflow from investing activities	(72)	41
FINANCING ACTIVITIES
Cash acquired on reverse acquisition	2,327	-
Proceeds from issue of share capital	4,500	-
Sale of joint interest in shares to employees	8	-
Expense of issue of share capital	(481)
Net cash inflow from  financing activities	6,354	-
Increase/(decrease) in cash and cash equivalents	4,806	(714)
Cash and cash equivalents at start of year	1,083	1,797
CASH AND CASH EQUIVALENTS AT END OF YEAR	5,889	1,083

*Comparative figures are for the six month short accounting period to 31 January 2010.

The Company's annual report and accounts for the year ended 31 January 2011 has been published today and will be posted to shareholders shortly.  The annual report and accounts are also available in electronic form for download on the Company's website, www.tissueregenix.com.

 

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