Final Results

RNS Number : 1884C

ValiRx PLC

27 April 2012

 

ValiRx Plc

("ValiRx" or "the Company")

Final Results and Notice of AGM

For the Year Ended 31 December 2011

ValiRx Plc (AIM: VAL), a life science company with a focus on cancer diagnostics and therapeutics for personalised medicine, announces its final results for the year ended 31 December 2011.

"Pivotal Period for ValiRx Sees Continued Excellent Progress"

HIGHLIGHTS

·      Revenue for the year increased by 157% to £455,000 (2010: £177,000).

·      Significant advances seen in the development and progress of both therapeutic compounds, VAL101 and VAL201, in their respective pre-clinical and translational programmes and towards in-human Phase I clinical trials.

·      Acquisition from Pharmatest Services Oy ("Pharmatest") of Oulu, Finland, of its biomarkers business unit, patent families and applications and related IP, by subsidiary, ValiRx Finland OY ("ValiFinn").  This provides the Company with exposure to both the key and increasingly exciting biomarkers market and to new revenue streams.

·      Receipt of USD1.11 million proceeds from the sale of Belgian subsidiary diagnostic development business, ValiBIO S.A. to Singapore Volition Pte. Ltd ("Volition").  The transaction, which was completed in the 2010 financial year, sees ValiRx satisfactorily exit from its investment whilst retaining a modest shareholding in Volition, whilst also retaining certain rights to use the technologies sold for use in ValiRx's therapeutic programmes and products.

·      February 2011 - £3.3 million Placing by Hybridan - a key milestone in providing the Company with a secure base of funding from which the pre-clinical progress of its therapeutics can be accelerated.

Dr Satu Vainikka, CEO of ValiRx, commented:

"We have made excellent progress over the past year, which included a significant capital injection, a strengthened balance sheet and with the Company's lead therapeutic products being on the cusp of clinical trials. We have a strong platform and offering from which to drive ValiRx forward and firmly position ourselves at the forefront of personalised oncology diagnostic and therapeutics development in the sector".

Posting of Accounts and Notice of Annual General Meeting

Included in the accounts, which are expected to be posted to shareholders 2 May 20012, is a notice to shareholders convening the Annual General Meeting of the Company to be held at the offices of Nabarro LLP, Lacon House, 84 Theobald's Road, London WC1X 8RW, on 29 May 2012 at 10:00 a.m..

CHAIRMAN'S REPORT FOR THE YEAR ENDED 31 DECEMBER 2011

I am pleased to report that during the twelve months ended 31 December 2011 your Company continued to develop strongly, both in terms of providing a well funded platform for drug development and in terms of the progress and development of its lead therapeutic compounds VAL101 and VAL201 and their progress towards the commencement of in-human clinical trials. Your Company continues to work with world class regulatory and clinical research organizations to ensure that these developments occur on a cost effective and timely basis.

The February 2011 Placing through Hybridan to raise £3.3 million was a key milestone in providing ValiRx with a secure base of funding from which the Company can accelerate the pre-clinical progress of VAL101 and VAL201 among other activities and further progress the business.

The period also saw the establishment of our subsidiary, ValiRx Finland OY ("ValiFinn"), in Finland and the acquisition from Pharmatest Services Oy ("Pharmatest") of Oulu, Finland, of its biomarkers business unit together with several families of patents and patent applications and related intellectual property ("IP"). This acquisition provides the Group with both an increased exposure to the Biomarker market, a key and increasingly exciting field within our industry, but also to a revenue stream, derived from the provision of contract services.

In 2011, we received the proceeds from the sale of our Belgian subsidiary diagnostic development business, ValiBIO S.A. to Singapore Volition Pte. Ltd ("Volition"). This was a business, which the board considered lay outside the Company's core technologies. However, we have retained the rights to the technologies for use in our therapeutic activities. Whilst we retain a modest interest and shareholding in its future growth, we are pleased to have satisfactorily exited from one of our investments.

Our progress during the period under review has been very encouraging and I am delighted that the business is more strongly established than ever before, and is now in a position to fully capitalise on both current opportunities and future successes. Going forward, I look forward to seeing our lead therapeutics continue to progress and our position in the biotechnology market strengthen further. We are well positioned and I look forward to the future with much confidence.

On a personal note I would also like to thank the executive team and the non-executive directors for the significant contribution both groups have made to the business over the last twelve months.

N Thorniley

Non-exec Chairman

ValiRx plc

CHIEF EXECUTIVE OFFICER'S REPORT FOR THE YEAR ENDED 31 DECEMBER 2011

The past year has been a fundamentally important period in the development of ValiRx, both as a company and in terms of the advancement of its various programmes. On all fronts, ValiRx has made good progress.

Revenues for the year were £455,000 (2010: £177,000). Administrative expenses were £1,513,000 (2010: £663,000). Included in administrative expenses were research and development costs of £421,000 (2010: £120,000). Losses after taxation were £933,000 (2010: profit £133,000).

I am pleased to report that over the year we continued to make good progress in terms of developing our cancer therapeutics and biomarker diagnostics with significant advances being seen regarding moving forward both therapeutic compounds, VAL101 and VAL201, in their respective pre-clinical and translational programmes.

VAL101

Continued strong progress has been seen with regard to the Eurostars programme for our lead therapeutic, VAL101 and for the GeneICE technology (or "Gene inactivation by chromatin engineering"), ValiRx's proprietary gene-silencing technology which has been developed for silencing or "freezing" rebellious genes, which cause conditions such as cancer and various neurological problems.    

We continue to meet the milestones as set out in a programme and are pleased to have optimised and simplified the production of the lead candidate molecule, which by extension makes the compound cheaper to produce, thereby adding future value. We believe this compound has the potential to deliver good biological activity and can complete preclinical studies efficiently and quickly.

Imperial College, University of London, from whom the technology was originally licensed, has been working in collaboration with the Company and is currently carrying out the late preclinical development. Results from the preclinical programme have shown efficacy in killing cancer cells in several systems, as the Company has reported previously, and ValiRx was delighted to announce that its agreement with Imperial College had been extended and that Imperial College would continue with the further development of this cancer therapeutic work. Stability and toxicology studies are currently underway.

We were also pleased to report that the previously announced extension to our Eurostars grant for the development of our GeneICE technology will extend the Company's pipeline of potential cancer therapeutic compounds.

VAL201

We were also pleased to report (28 July 2011) that a further late preclinical study into the development of another of our lead therapeutics, VAL201, carried out in collaboration with Oxford University, firmly established a potentially important role for VAL201 in treating, in vivo, hormone induced refractory prostate cancer and other conditions of hormone induced uncontrolled cell growth including breast and ovarian cancer, among others. These conditions currently have a large unmet medical need.

This progress follows on from ValiRx's agreement with Oxford University, (14 April 2011) to accelerate the development of this lead therapeutic and to study VAL201's therapeutic potential for additional indications. In the studies thus far, VAL201 has been shown to prevent cancerous growth in live models, with two proliferative conditions and in a further three conditions in cancer cell lines. The response was shown to be dose dependent and the Company was pleased to note that those models treated with VAL201 remained fertile and produced normal offspring and, unlike many other traditional therapies, no serious side effects were seen so far. ValiRx further announced on 2 November 2011 that it had filed a new patent for a further indication in endometriosis or hormone induced abnormal cell growth in women.

The compound is now in the translational phase from pre-clinical development into the clinical stage. Good progress has been made and it is gratifying to report that the production methods and procedures for the manufacture of VAL201 has been successfully upgraded to a standard that is acceptable for use in human, a process known as Good Manufacturing Practise or GMP. This GMP material is being used for the compulsory chronic and acute toxicological studies, which are being carried out to the highest ethical and regulatory standards. It is also pleasing to report that confirmatory pre-clinical studies, paid for by ValiRx, but conducted by independent contractors, have demonstrated the utility of VAL201 in controlling the proliferation of cancers - thereby confirming the results previously found by the Company and its collaborators.

Diagnostics and Biomarker Activities

With respect to the Company's diagnostics and biomarker activities, ValiRx was pleased to have acquired (18 August 2011) the outstanding equity of a subsidiary business, ValiRx Finland Oy ("ValiFinn Oy") that it had jointly established with local partners in 2008. Subsequent to this transaction and just after the period end, ValiFinn acquired (5 January 2012) from Pharmatest Services Oy ("Pharmatest") of Oulu, Finland, its biomarkers business unit together with several families of patents and patent applications and related intellectual property ("IP").

The biomarkers business unit comes with a revenue stream, which is derived from the provision of contract research services to pharmaceutical companies who are utilising its library of biomarkers and it will form a new division at ValiFinn. The Company will build on the specialist biomarker expertise of ValiFinn to develop its own companion diagnostic biomarkers to complement ValiRx's therapeutics, its existing intellectual property and its companion diagnostic activities, as well as marketing that expertise for the development programmes of other companies.

Biomarkers are a fast moving and currently very dynamic field within the bio-industry space and are crucial for detecting cancer at an early stage.       They are also key in optimising therapeutic strategy and monitoring therapeutic success. It is a market that is rapidly growing in size and it has the potential of delivering significant benefit for patients, alongside potential cost savings derived from across the pharmaceutical industry.

SELFCheck Health Screening Products

ValiRx is also continuing to generate revenues from its SELFCheck "Over-The-Counter" health screening products in the UK, which screen and identify among other things, cancers, cholesterol and several Sexually Transmitted Infections ("STI") such as Chlamydia. During the period, we were pleased to conclude an agreement with Medcase OY MCO ("Medcase"), a Finnish distributor operating across the Nordic region, for the distribution and sale of our SELFCheck test kits in Finland and Sweden, among other key distribution agreements.

Collaborative Agreements

During the period, ValiRx was pleased to have secured several developmental collaborative agreements, with prestigious partners including Oxford University, Imperial College, and Physiomics plc (AIM: PYC), the Oxford based systems biology company.  We are delighted that the Company continues to attract world-leading institutions to partner with us in the exciting development of a number of our key compounds and we thank them for their support.

ValiBIO S.A.

In 2011, your Company received the proceeds from the sale of its Belgian subsidiary diagnostic development business, ValiBIO S.A. to Singapore Volition Pte. Ltd ("Volition"). ValiRx continues to retain its modest shareholding in Volition and interest in the future upside value and growth of the business, whilst both satisfactorily exiting from one of its investments yet retaining rights to use the technologies sold for its own use with its therapeutic programmes and products. ValiRx has since received further shares in Volition in exchange for wider rights to its Hypergenomics Intellectual Property ("IP"), which the board considered lay outside the Company's core technologies.

Grant of Patents

We were also pleased to announce just before the period end (15 December 2011) that GeneICE had received patent approval by the Canadian patent office. This followed the previously announced grant of patents for the technology across the world encompassing territories including the US, Europe and Australia. The filing of this latest patent extends the Company's global geographic patent coverage and we believe, increases the value of the Company's assets.

Fund Raising

ValiRx also raised further capital of £3.3 million by way of a placing, (announced 16 February 2011). The net proceeds of the Placing are currently being used by the Company to accelerate the pre-clinical progress of VAL101 and VAL201, to support the sales and marketing activities of ValiRx's subsidiary, Valimedix, to develop the Company's companion diagnostics for use in its therapeutic programmes and to support the development and testing of its HPV diagnostic.

Outlook

Looking to the future, we will continue to progress our lead development programmes towards clinical trials and further advance the development pipeline. The placing and capital raised has left the Company well positioned to translate and move forward its therapeutic programmes towards the clinic and also to further advance the business and programme development of its biomarker subsidiary. I believe that the Company has made excellent progress over the past year, which included a significant capital injection, a strengthened balance sheet and with the Company's lead therapeutic products being on the cusp of clinical trials. We have a strong platform and offering from which to drive ValiRx forward and firmly position ourselves at the forefront of personalised oncology diagnostic and therapeutics development in the sector.

Satu Vainikka

Chief Executive Officer

ValiRx plc

VALIRX PLC
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2011
			2011		2010
			£		£
Revenue			455,226		177,297
Cost of sales			(26,507)		(56,518)
			───────		───────
Gross profit			428,719		120,779
Research and development			(420,683)		(120,281)
Administrative expenses			(1,092,492)		(542,638)
			─────────		─────────
Operating loss
Continuing operations		(1,084,456)		(462,345)
Discontinued activities		-		(79,795)
		───────		───────
			(1,084,456)		(542,140)
Profit on disposal of subsidiary			-		649,078
			─────────		─────────
(Loss)/profit on ordinary activities before interest			(1,084,456)		106,938
Finance income			20,726		1
Finance costs			(1,308)		(7,832)
			─────────		─────────
(Loss)/profit on ordinary activities before taxation			(1,065,038)		99,107
Income tax expense			132,353		34,537
			─────────		─────────
(Loss)/profit for the year			(932,685)		133,644
Other comprehensive income
Change in fair value of available-for-sale assets			147,912		-
			─────────		─────────
(Loss)/profit for the year and total comprehensive income			(784,773)		133,644
			═════════		═════════
(Loss)/earnings per share - basic and diluted
From continuing operations			(0.1)p		0.07p
From discontinued operations			-		(0.03)p
			═══════		═══════

VALIRX PLC

STATEMENT OF CHANGES IN EQUITY

FOR THE YEAR ENDED 31 DECEMBER 2011

					Share capital		Share premium	Merger reserve	Reverse acquisition reserve	Share option reserve	Retained earnings	Total
					£		£	£	£	£	£	£
Balance at 1 January 2010					4,450,368		71,118	637,500	602,413	10,447	(4,864,499)	907,347
Changes in equity for 2010
Profit for the year				-			-	-	-	-	133,644	133,644
Movement in the year				-			-	-	-	10,956	-	10,956
Issue of shares				381,354			616,102	-	-	-	-	997,456
Share issue costs				-			(52,151)	-	-	-	-	(52,151)
					─────────		─────────	─────────	─────────	─────────	─────────	─────────
Balance at 31 December 2010					4,831,722		635,069	637,500	602,413	21,403	(4,730,855)	1,997,252
Changes in equity for 2011
Loss for the year				-			-	-	-	-	(932,685)	(932,685)
Change in fair value of available-for-sale assets				-			-	-	-	-	147,912	147,912
Movement in the year				-			-	-	-	30,737	-	30,737
Issue of shares					568,262		2,815,957	-	-	-	-	3,384,219
Share issue costs				-			(203,487)	-	-	-	-	(203,487)
					─────────		─────────	─────────	─────────	─────────	─────────	─────────
Balance at 31 December 2011					5,399,984		3,247,539	637,500	602,413	52,140	(5,515,628)	4,423,948
					═════════		═════════	═════════	═════════	═════════	═════════	═════════
Merger reserve
The merger reserve of £637,500 exists as a result of the acquisition of Valirx Bioinnovation Limited. The merger reserve represents the difference between the nominal value of the share capital issued by the company and the fair value of Valirx Bioinnovation Limited at 3 October 2006, the date of acquisition.
Reverse acquisition reserve
The reverse acquisition reserve exists as a result of the method of accounting for the acquisition of Valirx Bioinnovation Limited and Valipharma Limited.

VALIRX PLC
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2011
				2011		2010
				£	£	£	£
ASSETS
Non current assets
Intangible assets					1,748,484		1,574,319
Property, plant and equipment					9,167		4,165
Financial assets: available-for-sale investments					859,450		-
					─────────		─────────
					2,617,101		1,578,484
					─────────		─────────
Current assets
Inventories				19,484		8,257
Trade and other receivables				294,908		806,158
Cash and cash equivalents				1,634,148		107,799
				─────────		─────────
					1,948,540		922,214
LIABILITIES
Current liabilities
Trade and other payables					(141,693)		(503,446)
					─────────		─────────
Net current assets					1,806,847		418,768
					─────────		─────────
Net assets					4,423,948		1,997,252
					═════════		═════════
SHAREHOLDERS' EQUITY
Called up share capital					5,399,984		4,831,722
Share premium					3,247,539		635,069
Merger reserve					637,500		637,500
Reverse acquisition reserve					602,413		602,413
Share option reserve					52,140		21,403
Profit and loss account					(5,515,628)		(4,730,855)
					─────────		─────────
Total shareholders' equity					4,423,948		1,997,252
					═════════		═════════

VALIRX PLC
CASH FLOW STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2011
		2011		2010
	Note £	£	£	£
Net cash outflow from operating activities	1	(1,460,375)		(592,288)
Taxation		-		104,142
Returns on investments and servicing of finance
Interest received	20,726		1
Interest paid	(1,308)		(7,832)
	───────		───────
Net cash inflow/(outflow) from returns on investments and servicing of finance		19,418		(7,831)
Capital expenditure and financial investment
Payments to acquire intangible assets	(193,511)		(135,618)
Payments to acquire tangible assets	(8,831)		(5,181)
	───────		───────
Net cash outflow for capital expenditure and financial investment		(202,342)		(140,799)
Acquisitions and disposals
Sale of subsidiary	-		71,999
Payments to acquire subsidiary	(13,546)		-
Net cash acquired with subsidiary undertaking	2,462		-
	───────		───────
Net cash (outflow)/inflow for acquisitions and disposals		(11,084)		71,999
Financing
Issue of ordinary share capital	3,384,219		755,000
Cost of share issue	(203,487)		(52,151)
Capital element of hire purchase contracts	-		(1,615)
	───────		───────
Net cash generated from financing activities		3,180,732		701,234
		───────		───────
Net increase in cash and cash equivalents		1,526,349		136,457
Cash and cash equivalents at beginning of period		107,799		(28,658)
		───────		───────
Cash and cash equivalents at end of period         2		1,634,148		107,799
		═══════		═══════

VALIRX PLC
NOTES TO THE CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2011
1	Cash flows from operating activities
				2011	2010
				£	£
	Operating loss			(1,084,456)	(542,140)
	Depreciation of tangible assets			3,829	3,597
	Amortisation of intangible assets			30,096	27,596
	(Increase)/decrease in inventories			(11,227)	7,402
	(Increase) in receivables			(215,513)	(134,124)
	(Decrease) in payables within one year			(361,753)	(208,808)
	Other non-cash movements			147,912	243,233
	Share option charge			30,737	10,956
				───────	───────
	Cash outflows from operating activities			(1,460,375)	(592,288)
				═══════	═══════
2	Cash and cash equivalents	1 January 2011	On acquisition of subsidiary	Cash flow	31 December 2011
		£	£	£	£
	Net cash:
	Cash at bank and in hand	107,799	2,462	1,523,887	1,634,148
		───────	───────	───────	───────
		107,799	2,462	1,523,887	1,634,148
		═══════	═══════	═══════	═══════
	Notes to the Financial Statements 1          Accounting policies and basis of information The financial information contained in this document does not constitute statutory financial statements within the meaning of section 434 of the Companies Act 2006. The figures for the year ended 31 December 2010 have been extracted from the audited statutory financial statements. The financial statements for the year ended 31 December 2010 received an unqualified auditors' report which did not contain a statement under section 498 (2) or (3) of the Companies Act 2006.

1        Accounting policies and basis of information

The financial information contained in this document does not constitute statutory financial statements within the meaning of section 434 of the Companies Act 2006. The figures for the year ended 31 December 2011 have been extracted from the audited statutory financial statements. The financial statements for the year ended 31 December 2011 received an unqualified auditors' report which did not contain a statement under section 498 (2) or (3) of the Companies Act 2006.

For more information, please contact:

ValiRx plc	Tel: [phone]
Dr Satu Vainikka	www.ValiRx.com
Cairn Financial Advisers LLP - (Nominated Adviser)	Tel:[phone]
Liam Murray / Avi Robinson
Hybridan LLP (Broker)	Tel: [phone]
Claire Louise Noyce / Deepak Reddy
Peckwater PR	Tel: [phone]
Tarquin Edwards	[e-mail]

Notes for Editors

ValiRx Plc

ValiRx Plc is a biopharmaceutical company developing novel technologies and products in oncology therapeutics and diagnostics. The product focus is in the epigenomic analysis and treatment of cancer, but the technologies can be applied to other fields as well, such as neurology and inflammatory diseases.

The Company listed on AIM in October 2006 and is creating a portfolio of innovative products through investment in specific development projects. It actively manages projects within this portfolio as a trading company and is not an investment vehicle. The ValiRx business model spreads the risks of life science technology developments by minimising financial exposure and running a set of projects to defined commercial endpoints. This maximises returns to shareholders by adding value at the earlier stages where value increases per investment unit are the greatest.

The Company operates through the following divisional companies:

·       ValiMedix is the sales and distribution division of ValiRx

·       ValiPharma is the therapeutics division with two embedded technologies primarily directed at the treatment of cancers. Of particular note is GeneICE, ValiRx's technology for controlling rebellious genes, which was awarded a Eurostars grant to the value of €1.2 million to fund the development of the GeneICE products through to the preclinical stages in cancer treatments

 

END

 

 

FR SEAFMMFESEEL