Final Results

RNS Number : 0770B

ValiRx PLC

28 March 2013

 

For release at 07:00 on 28 March 2013

ValiRx Plc

("ValiRx" or "the Company")

Final Results

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 2012.

"Excellent progress during the period

while ValiRx entered the clinical phase"

HIGHLIGHTS

·      Revenues for the year were £216,000 (2011 - £455,000)

·      Administration expenses were £2,492,000 (2011 - £1,513,000)

·      Losses after taxation were £2,164,000 (2011 - £933,000)

·      Development Costs, part of administration expenses, were £1,010,000 (2011 - £421,000)

·      Successful placing to raise £2.9m provided the Company with the required resources to take the Group's leading anti-cancer therapeutic VAL201, through first-in-human clinical trials.

·      Encouraging findings following an early stage breast cancer study of VAL201, which showed positive inhibition of hormone dependent breast cancer tumour growth in a dose dependent manner, with a significant dose dependent suppression of metastatic cancers.

·      GeneICE based lead compound VAL101 has shown good progress in the preclinical phase and the development programme is going ahead as planned.

·      ValiMedix entered into a UK distribution agreement with First Health Products Limited for the distribution and sale of ValiRx's SELFCheck health screening products in the UK.

Dr Satu Vainikka, CEO of ValiRx, commented:

"Looking to the future, we will continue
to progress our lead clinical development programmes and further advance the pre-clinical development pipeline, in addition to increasing the Company's commercial development activities and our product development activities. The Company has made excellent progress over the past year and we will look to further establish ourselves at the forefront of personalised oncology development, hopefully achieving some momentous milestones".

- ENDS -

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 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:

      ValiFinn is the biomarkers and diagnostic development division  

      ValiPharma is the therapeutics division with two embedded technologies primarily directed at the treatment of cancers.

CHAIRMAN'S REPORT FOR THE YEAR ENDED 31 DECEMBER 2012

2012 was a good year for the Company and
I am pleased to report on the solid progress achieved during the period, with performance much in line with expectations and with VAL201 advancing into first in-human trials.

ValiRx continues to develop pleasingly on a number of fronts. The Group continues to explore and develop its platforms for drug discovery
and development. ValiRx is seeking to drive greater shareholder value by conducting the clinical development of our lead compound VAL201 in its first potential indication, rather than by out-licensing its compounds at this stage. The Company has also advanced the pre-clinical development of its lead GeneICE therapeutic compound VAL101 as well VAL201 for two secondary indications.

During the year, the company consolidated its biomarker unit in Finland through the acquisition of Pharmatest Services, together with certain associated intellectual property assets. Strategically, the acquisition has enhanced the Company's R&D capability as the specialist expertise within the unit is leveraged to advance the companion diagnostics to complement therapeutic development.

Furthermore, the Company is delighted
to report that it has attracted and is now working with a team of internationally recognized experts in Oncology and the Group is already feeling the benefit of their collaboration, counsel and support.

In April 2012, we completed a placing through our broker Hybridan, to raise GBP 900,000 (before expenses). In November, ValiRx announced a second placing, again through Hybridan, to raise £2.03m, which will enable the Company to fund its clinical development.

In October, we were pleased to announce that ValiMedix had entered into a UK distribution agreement with First Health Products Limited. The five-year agreement means that the Company will no longer incur any of the direct expenses associated with the sales and marketing campaigns of the SELFCheck products.

Our progress during the period under review has been very encouraging and I am delighted that the business continues to more firmly establish itself and is now in a better position to take full advantage of opportunities as they arise. I look forward to seeing our lead therapeutics continue to progress and our position in the biotechnology market strengthen further. I look to the future with much confidence.

On a personal note, I would like to thank our executive team, clinical advisors and members of the board for the support, hard work and significant contribution each has made to the business over the last twelve months.

N Thorniley

Non-exec Chairman

ValiRx Plc

28 March 2013

CHIEF EXECUTIVE OFFICER'S REPORT FOR THE YEAR ENDED 31 DECEMBER 2012

I am pleased to report that we have continued to make good progress in terms of developing our cancer therapeutics and our biomarker diagnostics. During the period, the Company made significant advances in moving forward both its therapeutic compounds, VAL101 and VAL201, in their pre-clinical and clinical development programmes. Furthermore, ValiRx has grown and further developed its companion diagnostics biomarker programme alongside its overall R&D capabilities.

GeneICE and VAl101

The Company has seen good progress regarding the pre-clinical development
of VAL101, the lead compound based on ValiRx's proprietary GeneICE technology (or "Gene inactivation by chromatin engineering"). GeneICE has been developed for silencing or "freezing" rebellious genes, which cause conditions such as cancer and various neurological problems. Imperial College, University of London, from whom the technology was originally licensed, has been working in collaboration with the Company and is continuing to carry out pre-clinical development studies. Alongside this activity, ValiRx is currently looking at ways in which it can further expand its development pipeline based on the GeneICE platform.

We continue to meet the milestones as
set out in our programme objectives and
as previously announced, we have optimised and simplified the production of the candidate molecules. Results from the pre-clinical programme have shown efficacy in killing cancer cells in several systems, as reported previously and we believe the lead compound and potential pipeline compounds have the scope to deliver beneficial biological/clinical effects in oncological and various other indications.

VAL201

We were particularly pleased to report during the summer last year that our VAL201 development programme entered into its clinical development phase. Since then I am very happy to say that the manufacture of VAL201 has been upgraded to full GMP quality and batches of the compound, made to this human compatible standard, have been used in various regulatory toxicological and stability studies. All the various study results are in line with expectations and no unexpected results have been seen. In fact, no toxicological or other unpredicted effects within the expected therapeutic range have been witnessed.

In addition to the required regulatory background work, extensive work, of a
more fundamental nature, aimed at improving the understanding of the molecular and biochemical mechanism of VAL201 has continued. This has markedly increased our knowledge and understanding of the specific way in which VAL201 interacts and causes the effects seen in the model, proof of concept and regulatory studies. This has resulted in a more robust underpinning of the clinical utility of the compound and is enhancing the potential for VAL201's
clinical success.

A major milestone was achieved when the company presented its findings to the MHRA in the late autumn and received considerable support from the organisation for taking VAL201 forward. The first clinical indication will be prostate cancer and the first-in-human studies will involve patients with later-stage disease.

It is very satisfying to be able to confirm our earlier work that the compound is effective against a range of hormone refectory cancers such as breast and ovarian cancer, among others and the VAL201 response in these conditions was shown to be dose dependent. Further, we have firmly establish in a pre-clinical study of VAL201, in collaboration with Oxford University, a potentially important role for VAL201 in treating other conditions of hormone induced uncontrolled cell growth, and that treated test subjects remained fertile and produced normal offspring. All these hormonally induced conditions currently have a large unmet medical need. Additionally, it is nice to report that we have expanded our patent portfolio for a further indication in endometriosis or hormone induced abnormal cell growth in women.

Diagnostics and Biomarker Activities

In January 2012, we saw the consolidation
of our Biomarker biomarkers business unit with the acquisition of the Finnish biomarkers business, Pharmatest Services Oy, by ValiFinn together with 5 families of patents, patent applications and related Intellectual Property (IP). Strategically, the acquisition will enhance the Company's R&D capability, as the specialist biomarker expertise within the unit is leveraged to advance in-house
the development of companion biomarker diagnostics to complement ValiRx's therapeutics.

The acquisition provides ValiRx with increased exposure to the fast moving Biomarker market, a key and increasingly exciting field within
our industry, and to a revenue stream, albeit currently small, derived from the provision of contract services. Epigenomics is a rapidly advancing field and pairing a prognostic and/ or predictive biomarker diagnostic with a targeted drug is emerging as a key part of personalised medicine, particularly in cancer patients. These markers have the potential for delivering significant benefit for patients, alongside potential cost savings derived from across the pharmaceutical industry. Our activity in this space has already attracted interest from a number of organisations and the company is progressing various opportunities.

Clinical Appointments and
Collaborative Agreements
The Company is delighted to report that it has attracted and is now working with a team of internationally recognized experts in Clinical development in Oncology. Together, the team brings decades of expertise in product clinical development, patient selection, clinical protocol, regulatory affairs and other areas, imperative for the optimisation of clinical outcomes.  The Group is already feeling the benefit
of their collaboration, counsel and support in these areas.

During the period, ValiRx has expanded its international developmental and collaborative agreements with prestigious partners, including Imperial College, University College, Institut Paoli-Calmettes of Marseilles, France 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.

SELFCheck Health Screening Products

In October, we announced that ValiMedix had entered into a UK distribution agreement with First Health Products Limited for the distribution and sale of ValiMedix's SELFCheck health screening products. The outsourcing of this division has freed up management time and has allowed ValiRx's resources to be better targeted on maximising the value creation of its higher value, core therapeutic and diagnostic activities and for key members of ValiRx's management team to expedite the product development of VAL201 towards clinical trials.

Fund Raising

During the year, the Company achieved two successful fund raises. In April 2012, we completed a placing through our broker Hybridan, to raise GBP 900,000 (before expenses). In November, ValiRx announced
a second placing, again through Hybridan
to raise £2.03m. The net funds raised from this placing have provided the Company with the funding required to take VAL201 through and to the completion of First in Human trails, which represents a significant opportunity and value driver for the Group and I am both grateful to and pleased by the high level
of support received from both new and existing shareholders.

Outlook

Looking to the future, we will continue
 to progress our lead clinical development programmes and further advance the pre-clinical development pipeline, in addition to increasing the Company's commercial development activities and our product development activities. The Company has made excellent progress over the past year and we will look to further establish ourselves at the forefront of personalised oncology development with hopefully some momentous milestones having been achieved.

Satu Vainikka

Chief Executive Officer

28 March 2013

VALIRX PLC
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2012
			2012		2011
			£		£
Revenue			216,269		455,226
Cost of sales			(72,960)		(26,507)
			─────────		─────────
Gross profit			143,309		428,719
Research and development			(1,010,476)		(420,683)
Administrative expenses			(1,481,717)		(1,092,492)
			─────────		─────────
Operating loss			(2,348,884)		(1,084,456)
Finance income			19,001		20,726
Finance costs			(21)		(1,308)
			─────────		─────────
Loss on ordinary activities before taxation			(2,329,904)		(1,065,038)
Income tax expense			165,956		132,353
			─────────		─────────
Loss for the year			(2,163,948)		(932,685)
Other comprehensive income
Change in fair value of available-for-sale assets			13,893		147,912
			─────────		─────────
Loss for the year and total comprehensive income			(2,150,055)		(784,773)
			═════════		═════════
Loss per share - basic and diluted
From continuing operations			(0.17)p		(0.10)p
			═══════		═══════

There are no recognised gains and losses other than those passing through the Consolidated Statement of Comprehensive Income.

VALIRX PLC
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2012
					Share capital	Share premium	Merger reserve	Reverse acquisition reserve	Share option reserve	Retained earnings	Total
					£	£	£	£	£	£	£
	Balance at 1 January 2011				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
	Changes in equity for 2012
	Loss for the year				-	-	-	-	-	(2,163,948)	(2,163,948)
	Change in fair value of available-for-sale assets				-	-	-	-	-	13,893	13,893
	Movement in the year				-	-	-	-	21,712	-	21,712
	Issue of shares				651,623	2,280,675	-	-	-	-	2,932,298
	Share issue costs				-	(191,062)	-	-	-	-	(191,062)
					─────────	─────────	─────────	─────────	─────────	─────────	─────────
	Balance at 31 December 2012				6,051,607	5,337,152	637,500	602,413	73,852	(7,665,683)	5,036,841
					═════════	═════════	═════════	═════════	═════════	═════════	═════════
	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 2012
				2012		2011
				£	£	£	£
ASSETS
Non-current assets
Intangible assets					1,803,405		1,748,484
Property, plant and equipment					4,363		9,167
Financial assets: available-for-sale investments					873,343		859,450
					─────────		─────────
					2,681,111		2,617,101
					─────────		─────────
Current assets
Inventories				2,727		19,484
Trade and other receivables				353,855		294,908
Cash and cash equivalents				2,260,783		1,634,148
				─────────		─────────
					2,617,365		1,948,540
LIABILITIES
Current liabilities
Trade and other payables					(261,635)		(141,693)
					─────────		─────────
Net current assets					2,355,730		1,806,847
					─────────		─────────
Net assets					5,036,841		4,423,948
					═════════		═════════
SHAREHOLDERS' EQUITY
Called up share capital					6,051,607		5,399,984
Share premium					5,337,152		3,247,539
Merger reserve					637,500		637,500
Reverse acquisition reserve					602,413		602,413
Share option reserve					73,852		52,140
Profit and loss account					(7,665,683)		(5,515,628)
					─────────		─────────
Total shareholders' equity					5,036,841		4,423,948
					═════════		═════════

VALIRX PLC
CASH FLOW STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2012
		2012		2011
	£	£	£	£
Net cash outflow from operating activities		(2,131,745)		(1,460,375)
Taxation		132,353		-
Returns on investments and servicing of finance
Interest received	19,001		20,726
Interest paid	(21)		(1,308)
	───────		───────
Net cash inflow from returns on investments and servicing of finance		18,980		19,418
Capital expenditure and financial investment
Payments to acquire intangible assets	(132,145)		(193,511)
Payments to acquire tangible assets	(2,579)		(8,831)
Receipts from sales of tangible assets	535		-
	───────		───────
Net cash outflow for capital expenditure and financial investment		(134,189)		(202,342)
Acquisitions and disposals
Payments to acquire subsidiary	-		(13,546)
Net cash acquired with subsidiary undertaking	-		2,462
	───────		───────
Net cash outflow for acquisitions and disposals		-		(11,084)
Financing
Issue of ordinary share capital	2,932,298		3,384,219
Cost of share issue	(191,062)		(203,487)
	───────		───────
Net cash generated from financing activities		2,741,236		3,180,732
		───────		───────
Net increase in cash and cash equivalents		626,635		1,526,349
Cash and cash equivalents at beginning of period		1,634,148		107,799
		───────		───────
Cash and cash equivalents at end of period		2,260,783		1,634,148
		═══════		═══════

VALIRX PLC

NOTES TO THE CONSOLIDATED STATEMENT OF CASH FLOWS

FOR THE YEAR ENDED 31 DECEMBER 2012

1. Basis of Preparation

The financial information set out above does not constitute the Company's statutory accounts for the year ended 31 December 2012, but is derived from those accounts. Statutory accounts for 2012 will be delivered to the Registrar of Companies following the Company's annual general meeting.

2	Cash flows from operating activities
				2012	2011
				£	£
	Operating loss			(2,348,884)	(1,084,456)
	Depreciation of tangible assets			6,762	3,829
	Amortisation of intangible assets			48,579	30,096
	Loss on disposal of tangible assets			93	-
	Loss on disposal of intangible assets			25,218	-
	Decrease/(increase) in inventories			16,757	(11,227)
	Increase in receivables			(25,344)	(215,513)
	Increase/(decrease) in payables within one year			119,942	(361,753)
	Other non-cash movements			3,420	147,912
	Share option charge			21,712	30,737
				────────	────────
	Cash outflows from operating activities			(2,131,745)	(1,460,375)
				════════	════════
3	Cash and cash equivalents	1 January 2012	Other non-cash changes	Cash flow	31 December 2012
		£	£	£	£
	Net cash:
	Cash at bank and in hand	1,634,148	-	626,635	2,260,783
		───────	───────	───────	───────
		1,634,148	-	624,173	2,260,783
		═══════	═══════	═══════	═══════

4. Loss per ordinary share The earnings and number of shares used in the calculation of loss per ordinary share are set out below:
	2012	2011
Basic:
Loss for the financial period	(2,163,948)	(932,685)
Weighted average number of shares	1,288,079,027	945,478,035
Loss per share	(0.17)p	(0.10)p
There was no dilutive effect from the share options outstanding during the year.

5. Publication of Report & Accounts

The report and accounts for the period ended 31 December 2012 will be posted to shareholders shortly and will be available from the Company's website, www.valirx.com.

 

END

 

 

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