Half Yearly Report

RNS Number : 8393N

Tissue Regenix Group PLC

04 October 2012

 

Tissue Regenix Group plc ("Tissue Regenix" or "the Group")

Interim Results for the six months ended 31 July 2012

YORK, 4^th October 2012 - Tissue Regenix, the regenerative medical devices company which uses animal or human tissue to replace damaged or worn out parts of the human body, today announces its unaudited interim results for the six months ended 31 July 2012.

Operational Highlights

·      dCELL® Meniscus preclinical study completed - results to be announced later this year

·      dCELL® Human Dermis presented at the prestigious Symposium for Advanced Wound Care in Atlanta.  Further encouraging interim data has been published today

·      Yale University study into cell re-population shows dCELL® matrix in vascular patches outperforms competitor product

·      Recruitment of additional staff, including a head of commercialisation for our cardiac opportunities, to help drive our expanded development plan 

·      Strong pipeline of products, reinforced by clinical trial data, will result in commercialisation of some of these products in 2013

Financial Highlights

·      Planned increased investment in multiple development programmes and headcount resulted in an increased operating loss of £2,085k (H1 2011: £1,358k)

·      Net cash at the end of the period was £26,106k (H1 2011: £4,848k) having raised £25m (gross) by way of a share placing in December 2011

Antony Odell, Tissue Regenix Managing Director, commented:

"This has been another important six months for Tissue Regenix with the new funding now being deployed to drive our development plans in our four core areas of Advanced Wound Care, Orthopaedics, Cardiac and Vascular.

Over the period yet more preclinical and clinical data has shown the benefits of the dCELL® approach. The two year dCELL® Vascular Patch data was recently published as well as a case study from the human dCELL® Dermis pilot clinical and further interim data today. The dCELL® Meniscus preclinical data is due to be published before the end of the year and a number of different products including the ligament and cardiac patch are due to enter preclinical studies. In short the Company's product pipeline continues to develop and grow supported by strong data derived from 'real world' clinical needs.

In addition, Tissue Regenix has been selected as one of only twenty UK healthcare companies by UK Trade & Investment (UKT&I) to attend the Future Healthcare Mission to showcase the best in UK medical and healthcare science and technology to US investors and business partners.

We believe Tissue Regenix is an excellent example of a British company with world-beating technology, which is based on research conducted in UK universities and pioneered through patient treatment in the NHS.  We remain committed to becoming a global leader in regenerative medicine through the development of new healthcare technologies".

Enquiries:

Newgate Communications:               020 7680 6550

Alistair Kellie

Andrew Adie

Martin Greig

Tissue Regenix:                                    01904 435 176

Antony Odell                       

Ian Jefferson

Peel Hunt LLP:                                     020 7418 8900

James Steel                                          

Vijay Barathan

Chairman's Statement

Overview

We continue to make good progress in the development and commercialisation of our pipeline of products.  We aim to become a global leader in regenerative medicine and having raised £25m (gross) by way of a share placing in December 2011 we are well placed to achieve that goal.

The dCELL® process

Our proprietary platform technology, dCELL®, is protected by a library of patents.  It is used to decellularise human or animal donor tissue in order to create biological scaffolds that are then implanted into patients to replace diseased or damaged parts of their body.  Since the tissue has been decellularised there is no need for anti-rejection drugs.  These scaffolds are also capable of regeneration through natural bodily functions and because they are inert when implanted, they are classified as medical devices.  This means they are required to follow a regulatory pathway that is typically faster and less costly than, for example, a pharmaceutical product.

Product Development

Advanced Wound Care

The human dermis clinical trial on chronic wounds continues to produce encouraging results.  Further interim data has been released today and the final results of the study will be available soon.  We will also be undertaking a registry study to provide a UK database to demonstrate the effectiveness of the product.  We are beginning discussions for a clinical study in the USA.  Early discussions with potential suppliers of the human dermis material are underway and we also continue to develop the equivalent porcine product.  We are in the process of hiring a head of wound care to lead the commercialisation opportunities we see across the wound care space.

Orthopaedic

The preclinical study of the meniscus repair product has been encouraging with results expected to be released later this year.  We will be looking to commence clinical trials in 2013 when we have completed biomechanical testing and refined the suturing technique.  A US preclinical study is also planned following a pre-IDE discussion with the FDA.  The anterior cruciate ligament repair product will be in preclinical studies by H1 2013 and we have begun discussions with the FDA in respect of approval requirements for the US market.  As we move nearer to clinical and preclinical trials we are developing health economic models to support later commercialisation.

Cardiac

Pilot work with cardiac patches for mitral valve repair and pericardial patching has gone well and we intend to commence preclinical studies in H1 2013.  A number of product enhancements are being introduced to an existing bioprosthetic valve which will become the design for a dCELL® version prototype that will be available for preclinical trials by mid-2013.  We have commenced discussions with tissue banks for the commercialisation of the dCELL® human heart valve and a porcine version will be undergoing process optimisation work by the end of this calendar year.  In order to support these development and commercialisation plans we have recently appointed a head of the cardiac therapy area.

Vascular

A pilot study for the AV graft is now in progress with plans for a preclinical study in H2 2013.  Two year data was recently released for the existing vascular patch and we will be meeting the FDA shortly to progress US approval.

Financial Review

Administrative expenditure increased to £2,087k (H1 2011: £1,466k) reflecting additional headcount and product development costs incurred as we started to deploy the funds raised on multiple development programmes.  As a result of this investment the operating loss for the period increased to £2,085k (H1 2011: £1,358k).  Net cash at the end of the period was £26,106k (H1 2011: £4,848k).

Outlook

The programmes we have in place address acute needs in very large healthcare markets, including the US.  Successful development of our range of cost effective products will also help relieve huge financial burdens being placed on healthcare providers around the world.  Demand for products in regenerative medicine is forecast to increase and this, coupled with the chronic shortage of human donor tissue, gives me confidence that we are well positioned to create a global leader in our field.

John Samuel

Executive Chairman

4 October 2012

CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (UNAUDITED)

FOR THE SIX MONTHS TO 31 JULY 2012

	Notes	6 months to 31 July 2012 £'000	6 months to 31 July 2011 £'000	12 months to 31 Jan 2012 £'000
Revenue	3	2	108	109
Administrative expenses		(2,087)	(1,466)	(3,097)
Operating loss		(2,085)	(1,358)	(2,988)
Finance income		220	22	62
Loss before tax		(1,865)	(1,336)	(2,926)
Taxation	4	100	75	239
Loss after tax attributable to equity holders of the parent		(1,765)	(1,261)	(2,687)
Loss per share, basic and diluted:	5	(0.28)p	(0.28)p	(0.57)p

The loss for the period arises from the Group's continuing operations.

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (UNAUDITED)

FOR THE SIX MONTHS TO 31 JULY 2012

	Share Capital £'000	Share Premium £'000	Merger Reserve £'000	Reverse Acquisition Reserve £'000	Capital Reserves £'000	Share Based Payment Reserve £'000	Revenue Deficit Reserve £'000	Total Equity £'000
At 31 Jan 2011	2,343	8,655	10,884	(7,148)	14,734	332	(8,848)	6,218
Loss for the period	-	-	-	-	-	-	(1,261)	(1,261)
Issue of shares	10	2			12		(4)	8
Employee interest in jointly owned shares	-	-	-	-	-	-	1	1
Share based payment	-	-	-	-	-	51	-	51
At 31 July 2011	2,353	8,657	10,884	(7,148)	14,746	383	(10,112)	5,017
Loss for the period	-	-	-	-	-	-	(1,426)	(1,426)
Issue of shares	909	24,092			25,001	-	-	25,001
Expenses on issue of shares	-	(784)	-	-	(784)	-	-	(784)
Share based payment	-	-	-	-	-	71	-	71
At 31 Jan 2012	3,262	31,965	10,884	(7,148)	38,963	454	(11,538)	27,879
Loss for the period	-	-	-	-	-	-	(1,765)	(1,765)
Issue of shares	2	1	-	-	3	-	-	3
Share based payment		-	-	-	-	53	-	53
At 31 July 2012	3,264	31,966	10,884	(7,148)	38,966	507	(13,303)	26,170

CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION (UNAUDITED)

AS AT 31 JULY 2012

	Notes	31 July 2012 £'000	31 July 2011 £'000	31 Jan 2012 £'000
Non-current assets
Property, plant and equipment		199	169	157
Total non-current assets		199	169	157
Current assets
Trade and other receivables		562	328	350
Cash and cash equivalent		26,106	4,848	28,021
Total current assets		26,668	5,176	28,371
Total assets		26,867	5,345	28,528
Current liabilities
Trade and other payables		(697)	(328)	(649)
Total liabilities		(697)	(328)	(649)
Net assets		26,170	5,017	27,879
Equity
Share capital	6	3,264	2,353	3,262
Share premium	6	31,966	8,657	31,965
Merger Reserve	6	10,884	10,884	10,884
Reverse acquisition reserve	6	(7,148)	(7,148)	(7,148)
Capital reserves		38,966	14,746	38,963
Share based payment reserve		507	383	454
Revenue deficit reserve	7	(13,303)	(10,112)	(11,538)
Total equity		26,170	5,017	27,879

Approved by the Board and authorised for issue on 4 October 2012

John Samuel (Executive Chairman)                  Ian Jefferson (Chief Financial Officer)

CONDENSED CONSOLIDATED CASH FLOW STATEMENT (UNAUDITED)

FOR THE SIX MONTHS ENDED 31 JULY 2012

	Notes	6 months to 31 July 2012 £'000	6 months to 31 July 2011 £'000	12 months to 31 Jan 2012 £'000
Operating Activities Operating loss		(2,085)	(1,358)	(2,988)
Adjustment for non-cash items:
Depreciation of property, plant & equipment		31	31	62
Share based payment		53	51	122
Tax credit		-	114	280
Operating cash outflow		(2,001)	(1,162)	(2,524)
(Increase)/decrease in trade & other receivables		(115)	28	2
Decrease in trade & other payables		49	73	396
Net cash outflow from operations		(2,067)	(1,061)	(2,126)
Investing activities
Interest received		220	22	62
Purchase of property, plant & equipment		(71)	(11)	(30)
Net cash outflow from investing activities		149	11	32
Financing activities
Proceeds from issue of share capital		3	8	25,009
Sale of joint interest in shares to employees		-	1	1
Expense of issue of share capital		-	-	(784)
Net cash inflow from financing activities		3	9	24,226
(Decrease)/increase in cash and cash equivalents		(1,915)	(1,041)	22,132
Cash and cash equivalents at start of period		28,021	5,889	5,889
Cash and cash equivalents at end of period		26,106	4,848	28,021

NOTES TO THE CONDENSED FINANCIAL STATEMENTS (UNAUDITED)

FOR THE SIX MONTHS ENDED 31 JULY 2012

1.     Basis of preparation

The interim financial statements of Tissue Regenix Group Plc are unaudited condensed consolidated financial statements for the six months to 31 July 2012.  These include unaudited comparatives for the six months to 31 July 2011 together with the audited accounts for the year to 31 January 2012.

These condensed consolidated financial statements do not constitute statutory accounts.  The statutory accounts for the year to 31 January 2012 have been reported on by the auditors to Tissue Regenix Group Plc and have been filed with the Registrar of Companies.  The report of the auditors was unqualified and did not contain a statement under section 498 of the Companies Act 2006.

2.     Significant accounting policies

The condensed consolidated financial statements have been prepared under the historical cost convention in accordance with International Financial Reporting Standards as adopted by the European Union.

The accounting policies adopted are consistent with those followed in the preparation of the audited financial statements of Tissue Regenix Group Plc for the year ended 31 January 2012 and are disclosed in those statements.

3.     Segmental Reporting

At 31 July 2012, the Group operated in one business segment, that of the development and commercialisation of innovative platform technologies in the field of tissue engineering and regenerative medicine.

To date the bulk of revenues comprise grant income earned in the UK.  All of the Group's assets are held in the UK and all of its capital expenditure arises in the UK.

4.     Taxation

	Notes	6 months to 31 July 2012 £'000	6 months to 31 July 2011 £'000	12 months to 31 Jan 2012 £'000
Current Tax:
Tax credit on research and development costs in the period		100	75	239
		100	75
Deferred tax:
Origination and reversal of temporary timing differences		-	-	-
Tax credit on loss on ordinary activities		100	75	239

The Group has accumulated losses available to carry forward against future trading profits.  No deferred tax asset has been recognised in respect of tax losses.

NOTES TO THE CONDENSED FINANCIAL STATEMENTS (UNAUDITED) continued

FOR THE SIX MONTHS ENDED 31 JULY 2012

5.     Loss per share (basic and diluted)

Basic loss per share is calculated by dividing the loss attributable to equity holders of the parent by the weighted average number of ordinary shares in issue during the period excluding own shares held jointly by the Tissue Regenix Employee Share Trust and certain employees.  Diluted loss per share is calculated by adjusting the weighted average number of ordinary shares in issue during the period to assume conversion of all dilutive potential ordinary shares.

	Notes	6 months to 31 July 2012 £'000	6 months to 31 July 2011 £'000	12 months to 31 Jan 2012 £'000
Total loss attributable to the equity holders of the parent		(1,765)	(1,261)	(2,687)
		No.	No.	No.
Weighted average number of ordinary shares in issue during the period		635,267,519	452,466,581	469,184,667
Loss per share
Basic and diluted on loss for the period		(0.28)p	(0.28)p	(0.57)p

The Company has issued employees options over 15,591,356 ordinary shares and there are 17,540,386 jointly owned shares which are potentially dilutive.  There is, however, no dilutive effect of these issued options as there is a loss for each of the periods concerned.

NOTES TO THE CONDENSED FINANCIAL STATEMENTS (UNAUDITED) continued

FOR THE SIX MONTHS ENDED 31 JULY 2012

6.     Share capital

	Number	Share Capital £'000	Share Premium £'000	Merger Reserve £'000	Reverse acquisition reserve £'000	Total £'000
Total Ordinary shares of 0.5p each as at 31 January 2011	468,597,903	2,343	8,655	10,884	(7,148)	14,734
Issued on exercise of share options	1,136,376	6	2	-	-	8
Issued to Tissue Regenix Employee Share Trust	827,586	4	-	-	-	4
Total Ordinary shares of 0.5p each as at 31 July 2011	470,561,865	2,353	8,657	10,884	(7,148)	14,746
Issued for cash	181,818,182	909	24,092	-	-	25,001
Expenses of issue of shares	-	-	(784)	-	-	(784)
Total Ordinary shares of 0.5p each as at 31 January 2012	652,380,047	3,262	31,965	10,884	(7,148)	38,963
Issued on exercise of share options	444,972	2	1	-	-	3
Total Ordinary shares of 0.5p each as at 31 July 2012	652,825,019	3,264	31,966	10,884	(7,148)	38,966

7.     Movement in revenue reserve and own shares

		Retained Deficit £'000	Own Shares £'000	Revenue Deficit Reserve £'000
At 31 January 2011		(8,020)	(828)	(8,848)
Purchase of own shares		-	(4)	(4)
Employee interest in jointly held shares		-	1	1
Loss for the period		(1,261)	-	(1,261)
At 31 July 2011		(9,281)	(831)	(10,112)
Loss for the period		(1,426)	-	(1,426)
At 31 January 2012		(10,707)	(831)	(11,538)
Loss for the period		(1,765)	-	(1,765)
At 31 July 2012		(12,472)	(831)	(13,303)

8.     Interim financial report

A copy of this interim report will be distributed to shareholders and is also available on the Company's website at www.tissueregenix.com

 

END

 

 

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