Half Yearly Report

RNS Number : 6859M

ValiRx PLC

20 September 2012

 

20 September 2012

ValiRx Plc

("ValiRx" or "the Company")

Half Yearly Report

ValiRx Plc (AIM: VAL), a life science company with a focus on cancer diagnostics and therapeutics for personalised medicine, announces its unaudited results for the half-year ended 30 June 2012.

HIGHLIGHTS

·      Late stage pre-clinical R&D programmes have generated positive results to support therapeutic potential of our lead compounds, VAL201 and VAL101 (GeneICE).

·      VAL201, which has shown significant inhibition of aggressive tumour cell proliferation in prostate cancer, also reduces spread of secondary tumours.

·      Manufacturing of VAL201 to regulatory standards has also been successful and the drug is currently undergoing regulatory toxicology studies prior to entering clinical trials.

·      Focusing on potential indication for GeneICE drug candidate.

·      Secured additional shareholder support with a gross investment of GBP 900,000.

·      Acquisition by Finnish subsidiary, ValiRx Finland OY ("ValiFinn"), of biomarkers business unit together with several families of patents and patent applications and related intellectual property ("IP").

·      Material Transfer Agreement ("MTA") concluded with a distinguished cancer treatment and research centre, the Institut Paoli & Calmettes ("IPC") in Marseille, France to conduct translational and developmental studies on ValiRx's lead compound, VAL201 and assist with its progression towards clinical trials.

·      Establishment of Scientific Advisory Board ("SAB") to advise and assist the Company in the further development of its technologies and products in oncology therapeutics and diagnostics and provide world-class clinical expertise.

·      Continued collaboration with Imperial College, Cancer Research UK and Oxford University.

Nicholas Thorniley, Non-Executive Chairman of ValiRx, commented:

"Our progress during the period under review has been very encouraging. VAL201, which has been shown to significantly inhibit the aggressive tumour growth in prostate cancer, also reduces the spread of secondary tumours (metastasis) by up to 50 per cent. These findings are a major step forward, since patients with prostate cancer typically develop metastasis. The Company believes that this further strengthens the product offering."

"I am pleased that one of a number of our compounds is expected to be entering clinical trials. The preclinical results on VAL201 have exceeded our expectations and the Company is assessing its options; one of which is to conduct its own Phase I trial rather than out-licensing at this stage. We believe that we can drive greater shareholder value in conducting Phase I trials ourselves, but we continue to consider all options. With the Company's costs under control and with the Group and its lead therapeutics and other assets moving forward, as planned, I look forward to the future with growing confidence."

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]

Chairman's Statement

I am pleased to report that during the half year ended 30 June 2012, the Company has continued its strong progress in the development of a sustainable platform for drug development.  Costs have been kept under control and the Company and its compounds have moved forward as planned and we are particularly pleased to see the continuing development of our lead therapeutic compounds VAL101 and VAL201, and especially VAL201 towards the commencement of in-human clinical trials.

Revenues for the half-year were £157,535 (2011: £418,263). Administrative expenses were £709,148 (2011: £417,508). Losses after taxation were £1,088,122 (2011: losses £161,392). In the half-year £540,211 (2011: £152,935) was spent on Research and Development, which contributed to the higher losses.

In April 2012, we completed a placing through our broker Hybridan, to raise GBP 900,000 (before expenses) which has provided ValiRx with a secure base of funding from which the Company could accelerate and complete its pre-clinical work on VAL201 and also to continue pre-clinical work for VAL101 among other activities. Furthermore, the placing has enabled the Company to continue development of companion diagnostics methods and expand its IP portfolio and value, alongside providing scope for an increase in the marketing of our biomarkers business.

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

At the end of March 2012, ValiRx concluded a Material Transfer Agreement ("MTA") with the Institut Paoli & Calmettes ("IPC") in Marseille, France. Under the terms of the MTA, the IPC has been conducting translational and developmental studies on ValiRx's lead compound, VAL201 and will assist the Company in the progression towards clinical trials.

The manufacturing of VAL201 to regulatory standards has been successful and during the period VAL201 has been undergoing regulatory toxicology studies.

Our progress during the period under review has been very encouraging and the advances in the development of our drug programmes represent a major step forward to further strengthen our product offering.

I am delighted that one of a number of our compounds is expected to be entering clinical trials imminently and based upon this increasingly secure corporate platform, I look forward to the future with growing confidence.

Nick Thorniley

Non-executive Chairman

20 September 2012

Consolidated statement of comprehensive income

For the six months ended 30 June 2012

		Note	30 June		30 June		31 December
			2012		2011		2011
			(unaudited)		(unaudited)		(audited)
			£		£		£
Revenue
Continuing operations			157,535		418,263		455,226
Cost of sales			(48,291)		(11,625)		(26,507)
Gross profit			109,244		406,638		428,719
Research and development			(540,211)		(152,935)		(420,683)
Administrative expenses			(709,148)		(417,508)		(1,092,492)
Operating loss			(1,140,115)		(163,805)		(1,084,456)
Finance income			11,993		2,413		20,726
Finance costs			-		-		(1,308)
Loss before taxation			(1,128,122)		(161,392)		(1,065,038)
Income tax credit		3	40,000		-		132,353
Loss for the period			(1,088,122)		(161,392)		(932,685)
Other comprehensive income
Change in fair value of available -for-sale assets			282,068		-		147,912
Loss for the period and total comprehensive income			(806,054)		(161,392)		(784,773)
Loss per share - basic and diluted		4	(0.09)p		(0.07)p		(0.10)p

       Statement of changes in shareholders' equity

		Share capital		Share premium		Retained earnings		Merger reserve		Share option reserve		Reverse acquisition reserve		Total
		£		£		£		£		£		£		£
Unaudited
Balance at 1 January 2012		5,399,984		3,247,539		(5,515,628)		637,500		52,140		602,413		4,423,948
Loss for the period		-		-		(1,088,122)		-		-		-		(1,088,122)
Change in fair value of available-for-sale assets		-		-		282,068		-		-		-		282,068
Issue of shares		200,000		700,000		-		-		-		-		900,000
Movement in period		-		(56,129)		-		-		-		-		(56,129)
Share based payment		-		-		-		-		14,270		-		14,270
Balance at 30 June 2012		5,599,984		3,891,410		(6,321,682)		637,500		66,410		602,413		4,476,035
Unaudited
Balance at 1 January 2011		4,831,722		635,069		(4,730,855)		637,500		21,403		602,413		1,997,252
Loss for the period		-		-		(161,392)		-		-		-		(161,392)
Issue of shares		553,263		2,752,958		-		-		-		-		3,306,221
Movement in period		-		(237,592)		-		-		-		-		(237,592)
Share based payment		-		-		-		-		5,792		-		5,792
Balance at 30 June 2011		5,384,985		3,150,435		(4,892,247)		637,500		27,195		602,413		4,910,281
Audited
Balance at 1 January 2011		4,831,722		635,069		(4,730,855)		637,500		21,403		602,413		1,997,252
Loss for the year		-		-		(932,685)		-		-		-		(932,685)
Change in fair value of available-for-sale assets		-		-		147,912		-		-		-		147,912
Issue of shares		568,262		2,815,957		-		-		-		-		3,384,219
Movement in period		-		(203,487)		-		-		-		-		(203,487)
Share based payment		-		-		-		-		30,737		-		30,737
Balance at 31 December 2011		5,399,984		3,247,539		(5,515,628)		637,500		52,140		602,413		4,423,948

Consolidated statement of financial position

		As at 30 June				31 December
		2012		2011		2011
		(unaudited)		(unaudited)		(audited)
		£		£		£
ASSETS
Non current assets
Intangible assets		1,788,134		1,588,161		1,748,484
Property, plant and equipment		6,394		11,181		9,167
Financial assets: available-for-sale investments		1,141,518		-		859,450
		2,936,046		1,599,342		2,617,101
Current assets
Inventories		15,035		15,956		19,484
Trade and other receivables		360,629		1,083,851		294,908
Cash and cash equivalents		1,383,653		2,323,910		1,634,148
		1,759,317		3,423,717		1,948,540
TOTAL ASSETS		4,695,363		5,023,059		4,565,641
LIABILITIES
Current liabilities
Trade and other payables		(219,328)		(112,778)		(141,693)
		(219,328)		(112,778)		(141,693)
NET ASSETS		4,476,035		4,910,281		4,423,948
SHAREHOLDERS' EQUITY
Share capital		5,599,984		5,384,985		5,399,984
Share premium account		3,891,410		3,150,435		3,247,539
Merger reserve		637,500		637,500		637,500
Reverse acquisition reserve		602,413		602,413		602,413
Share option reserve		66,410		27,195		52,140
Retained earnings		(6,321,682)		(4,892,247)		(5,515,628)
Total shareholders' equity		4,476,035		4,910,281		4,423,948

Consolidated cash flow statement

For the six months ended 30 June 2012

		Six months ended		Six months ended		Year ended
		30 June		30 June		31 December
		2012		2011		2011
		(unaudited)		(unaudited)		(audited)
		£		£		£
Operating activities
Operating loss		(1,140,115)		(163,805)		(1,084,456)
Depreciation of tangible assets		3,438		1,354		3,829
Amortisation of intangible assets		11,764		13,798		30,096
Decrease/(increase) in inventories		4,449		(7,699)		(11,227)
Increase in receivables		(41,771)		(277,693)		(215,513)
Increase/(decrease) in creditors within one year		77,635		(390,668)		(361,753)
Other non-cash movements		5,466		-		147,912
Share option charge		14,270		5,792		30,737
Cash outflows from operating activities		(1,064,864)		(818,921)		(1,460,375)
Taxation		16,050		-		-
Investing activities
Interest received		11,993		2,413		20,726
Interest paid		-		-		(1,308)
Payments to acquire intangible assets		(56,880)		(27,640)		(193,511)
Payments to acquire tangible assets		(665)		(8,370)		(8,831)
Payment to acquire subsidiary		-		-		(13,546)
Net cash acquired with subsidiary undertaking		-		-		2,462
Net cash outflow for acquisitions and disposals		(45,552)		(33,597)		(194,008)
Financing activities
Issue of ordinary share capital		900,000		3,306,221		3,384,219
Cost of share issue		(56,129)		(237,592)		(203,487)
Net cash generated from financing activities		843,871		3,068,629		3,180,732
Net (decrease)/increase in cash and cash equivalents		(250,495)		2,216,111		1,526,349
Cash and cash equivalents at start of period		1,634,148		107,799		107,799
Cash and cash equivalents at end of period		1,383,653		2,323,910		1,634,148

Notes to the interim financial statements

1              General information

Valirx Plc is a company incorporated in the United Kingdom, which is quoted on the AIM market of the London Stock Exchange. The address of its registered office is 24 Greville Street, London EC1N 8SS.

2              Financial information

The financial information for the six months ended 30 June 2012 has not been audited or reviewed and does not constitute statutory accounts within the meaning of Section 434 of the Companies Act 2006. The Group's statutory accounts for the year ended 31 December 2011 have been delivered to the Registrar of Companies. The report of the independent auditors on those financial statements was unqualified and did not contain a statement under Sections 498 (2) or (3) of the Companies Act 2006.

The financial information for the six months ended 30 June 2012 has been prepared in accordance with International Financial Reporting Standards ('IFRS') as adopted by the European Union, IFRIC interpretations and the Companies Act 2006 applicable to companies reporting under IFRS and under the historical cost convention. The accounting policies applied in preparing the interim financial information are consistent with those set out in the statutory accounts of the Company for the year ended 31 December 2011.

The interim consolidated financial statements are presented in pounds sterling because that is the currency of the primary economic environment in which the group operates.

3              Taxation

Six months ended   Six months ended Year ended 30 June 30 June 31 December 2012 2011 2011 (unaudited) (unaudited) (audited) £ £ £ United Kingdom corporation tax at 28%   Current period - R & D Tax credit (40,000)                   -   (116,303)   Prior period - R & D Tax credit                   -                     -   (16,050) Tax charge (40,000)                   -   (132,353)

4              Loss per ordinary shares

The loss and number of shares used in the calculation of loss per share are as follows:

		Six months ended		Six months ended		Year ended
		30 June		30 June		31 December
		2012		2011		2011
		(unaudited)		(unaudited)		(audited)
Basic:
Loss for the financial period		(1,088,122)		(161,392)		(932,685)
Weighted average number of shares		1,159,562,609		226,497,358		945,478,035
Loss per share		(0.09)p		(0.07)p		(0.10)p

There was no dilutive effect from the share options outstanding during the period.

5              Dividends

The directors do not propose to declare a dividend in respect of the period.

6              Share capital

	30 June 2012				30 June 2011
	Number		£		Number		£
	(unaudited)		(unaudited)		(unaudited)		(unaudited)
Allotted, called up and fully paid
Ordinary shares of 0.1p each	1,259,562,609		1,259,561		1,044,562,609		1,044,562
Deferred shares of 5.0p each	58,378,365		2,918,918		58,378,365		2,918,918
Deferred shares of 0.9p each	157,945,030		1,421,505		157,945,030		1,421,505
			5,599,984				5,384,985
	31 December 2011
	Number		£
Allotted, called up and fully paid	(unaudited)		(unaudited)
Ordinary shares of 0.1p each	1,059,562,609		1,059,561
Deferred shares of 5.0p each	58,378,365		2,918,918
Deferred shares of 0.9p each	157,945,030		1,421,505
			5,399,984

On 1 April 2012, 200 million ordinary shares of 0.1p each were issued at 0.45p per share, raising £900,000 before expenses.

The deferred shares effectively have no rights or value.

7              Copies of interim results

Copies of the interim results can be obtained from the website www.valirx.com.

 

END

 

 

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