Interim Results
Ardana PLC
09 October 2007
Ardana: Interim Results for the
six months ended 30 September 2007
Ardana plc (LSE: ARA) the pharmaceutical company focused on improving human
reproductive health, today announces its Interim Results for the six months
ended 30 September 2007.
Highlights in the period
• Teverelix Long Acting (LA)
- Positive preliminary results of a further Phase II trial demonstrating
extended duration of action in patients with prostate cancer
- Licensing discussions are progressing well with several potential
partners at different stages of negotiation. In addition, discussions
have broadened with approaches from new parties interested in the
opportunity following the recent Phase II results.
• ARD-07, oral Growth Hormone Secretagogue (GHS)
- Orphan Drug status granted by US Food and Drug Administration (FDA)
- Commencement of pivotal registration study in the US for the
diagnosis of growth hormone deficiency
• Emselex(R)
- Favourable assessment from the Scottish Medicines Consortium (SMC)
which means that Emselex(R) is approved for use in NHS Scotland
Key Financials
• Total cash and cash equivalents at 30 September 2007 of £11.0 million (31
March 2007: £16.6 million)
• The development programme will be managed and scheduled in line with
available funds. Outlicensing deals and/or financing will be required to
support the company's development programme as currently planned over the
next twelve months.
• Loss before tax for the six months ended 30 September 2007 of £6.9 million
(six months ended 30 September 2006: £5.5 million)
Post period events
• Dr Maureen Lindsay steps down as CEO
• Dr Huw Jones is appointed CEO with immediate effect. Please see separate
press release issued on 8 October 2007 for details.
Simon Best, Chairman, commented 'The last six months have seen us make good
progress across all aspects of Ardana's business. We continue to discuss with
potential partners an out-licensing deal for Teverelix LA. Concluding a deal
that will allow us to maintain the company's planned development programmes
across our range of products remains management's top priority. Our product
pipeline has continued to make progress in clinical development. During the
last six months we have reached the important milestone of entering Testosterone
Cream and Oral GHS into Phase III clinical development. Subject to successful
completion of the on-going pivotal studies, we have five potential regulatory
filings in the US and EU in the next twenty four months.'
Enquiries
For more information contact:
Simon Best/Huw Jones + 44 (0) 131 226 8550
Ardana
Julia Phillips/John Gilbert +44 (0) 20 7831 3113
Financial Dynamics
(corporate and financial media relations)
About Ardana
Ardana plc is a pharmaceutical company focused on the discovery, development and
marketing of innovative products to improve human reproductive health, a $25.5
billion market*.
Since its foundation, Ardana has built a broad and balanced portfolio to manage
risk and actively pursue product and technology in-licensing and out-licensing
to maintain a robust pipeline.
Ardana's key products are summarised below:
• Teverelix LA, in development for three initial indications (prostate
cancer, benign prostatic hyperplasia and endometriosis);
• ARD-07 a growth hormone secretagogue in Phase III development for the
diagnosis of growth hormone deficiency in adults;
• Testosterone Cream, a trans dermal testosterone delivery system in
development for the treatment of male hypogonadism, in Phase III trials;
• InvicorpTM, an injectable combination drug treatment for erectile
dysfunction, for which Ardana has marketing and manufacturing rights in
Europe and has been launched in Denmark;
• Emselex(R), a once a day treatment for the symptoms of overactive bladder
syndrome, for which Ardana has exclusive UK marketing and promotion rights
and is being distributed in collaboration with Novartis UK Limited; and
• StriantTM SR, a testosterone replacement therapy that has been launched by
Ardana through its own sales force in the UK and through marketing partners
in certain European countries, as a treatment for men with confirmed
hypogonadism.
In addition, Ardana has a strong portfolio of follow-on products in development.
Ardana is listed on the Main Market of the London Stock Exchange.
For further information please see www.ardana.co.uk
*Source: IMS Retail Drug Monitor November 2005.
Statements contained within this press release may contain forward-looking
comments which involve risks and uncertainties that may cause actual results to
vary from those contained in the forward-looking statements. In some cases, you
can identify such forward-looking statements by terminology such as 'may', '
will', 'could', 'forecasts', 'expects', 'plans', 'anticipates', 'believes', '
estimates', 'predicts', 'potential', or 'continue'. Predictions and
forward-looking references in this press release are subject to the satisfactory
progress of research which is, by nature, unpredictable. Forward projections
reflect management's best estimates based on information available at the time
of issue.
RESPONSIBILITY STATEMENT
We confirm that to the best of our knowledge:
a. the condensed set of financial statements has been prepared in accordance
with IAS 34;
b. the interim management report includes a fair review of the information
required by DTR 4.2.7R (indication of important events during the first six
months and description of principal risks and uncertainties for the
remaining six months of the year); and
c. the interim management report includes a fair review of the information
required by DTR 4.2.8R (disclosures of related party transactions and
changes therein).
By order of the Board
Chief Executive Officer
9 October 2007
INTERIM MANAGEMENT STATEMENT
Introduction
I am pleased to report that the last six months have seen us make good progress
across all aspects of Ardana's business. Concluding an out-licensing deal for
Teverelix LA remains management's top priority, and we are at different stages
of negotiation with several potential partners. In addition, following the
recent publication of the positive Phase II data on prostate cancer the
discussions have broadened with approaches from other new parties interested in
the opportunity. In the meantime, the development programmes will be managed
and scheduled in line with available funds. Outlicensing deals and/or financing
will be required to support the company's planned development activities as
outlined below over the next twelve months.
Clinical development has progressed satisfactorily across our product pipeline.
During the last six months we have commenced our first Phase III studies for
Testosterone Cream and Oral GHS. Subject to successful completion of these
on-going pivotal studies, we have five potential regulatory filings in the US
and EU in the next twenty four months.
Product Pipeline
Teverelix LA - Overview
Ardana is developing the long acting formulation of its Gonadotrophin Releasing
Hormone (GnRH) antagonist, Teverelix LA, to treat three indications; prostate
cancer, benign prostatic hyperplasia (BPH) and endometriosis. We continue to
discuss with potential partners an out-licensing deal for Teverelix LA.
Teverelix LA - Prostate Cancer
During September 2007 we announced positive preliminary results from a further
Phase II study in patients with prostate cancer, demonstrating a new dose
regimen extended to 8 weeks from 4 weeks.
The progression of prostate cancer is driven by male sex hormones (androgens)
such as testosterone. It is widely accepted that reducing levels of these
hormones in advanced stage disease can help slow the growth of the cancer and
prolong survival. The production of testosterone can be reduced surgically by
the removal of the testes, or through medicines that affect the production of
testosterone. Previous Phase II studies have confirmed that Teverelix LA can
attain and maintain suppression of testosterone to castration level for at least
4 weeks in patients with prostate cancer. The preliminary data from this new
study has demonstrated a dosage regimen that can extend this duration of action
to at least 8 weeks. Our other Phase II study evaluating a 4-weekly repeat dose
regimen is on-going but preliminary data is anticipated Q1 2008.
Teverelix LA - Benign Prostatic Hyperplasia (BPH)
The Phase II studies of Teverelix LA in the indication of BPH are completed and
the analyses are on-going.
Teverelix LA - Endometriosis
Teverelix LA is currently in Phase I development in the indication of
endometriosis.
Data from Phase I studies indicate that Teverelix LA can reduce oestrogen levels
to a desired level at the lower end of the normal range which should help to
avoid menopausal signs and symptoms including bone loss. These studies provide
data to support the further development of Teverelix LA in endometriosis, a
condition with an unmet medical need. A pre-IND meeting has been arranged with
the FDA for 7th November 2007 and a Phase II study in the US is currently
planned for 2008.
ARD-07, oral Growth Hormone Secretagogue
ARD-07 (Oral GHS) is an oral formulation of a growth hormone secretagogue (GHS).
This is a novel small molecule size peptidomimetic agent (a compound that mimics
the biological action of a peptide). Based on clinical results to date we
believe that Oral GHS can stimulate growth hormone secretion from the pituitary
gland directly and/or indirectly via stimulation of growth hormone releasing
peptide (GHRP) from the hypothalamus.
Ardana is developing Oral GHS for the diagnosis of growth hormone deficiency
(GHD) in adults. The pivotal registration study is ongoing. Recruitment of
patients has been continuing according to plan however the availability of the
closely matched subjects defined for the trial, a specific requirement for a
diagnostic agent, is proving very challenging. We have been opening up
additional centres to speed up the recruitment of the matched controls. If
development activity is maintained as planned, management expect that the NDA
for registration of Oral GHS in the US would be likely to be in the first half
of 2008.
Ardana believes that GHS' oral formulation will give clinicians a simpler and
more effective test for GHD. During May 2007 we announced that the FDA has
granted Orphan Drug status for Oral GHS as a diagnostic for growth hormone
deficiency in adults. We are delighted with this grant, which confers a number
of advantages such as eligibility to apply to the FDA for grants towards
clinical development and the waiving of the User Registration Fee of
approximately $900,000.
Furthermore, as well as being developed as a diagnostic for GHD, potential
applications for Oral GHS include the diagnosis and treatment of GHD disorders
and frailty of the elderly, as well as metabolic complications associated with
critical illness, such as cachexia, trauma, uremia and lipodystrophy. The
current worldwide market for growth hormone products is approximately US$3.1
billion, and forecast to grow to US$3.87 billion by 2010, (Wood Mackenzie
Product View, April 2006). The market is currently served by injectable
recombinant human growth hormone. We believe our compound has the potential to
be the first oral product in this market. It is expected that market entry of
Oral GHS as a diagnostic would provide Ardana with a strong platform from which
to develop Oral GHS as a therapeutic agent.
Testosterone Cream
Testosterone Cream is a transdermal testosterone delivery system based on our
Bi-Gel technology, which is in development for the treatment of male
hypogonadism.
A pivotal Phase III registration study in the US is ongoing. Patient
recruitment is slower than expected due to a combination of higher
screen-failure rate than anticipated compounded and prolongation of the time to
stabilize on treatment. We are finding that a high proportion of potential
patients currently on treatment have normal testosterone levels even after
washout, making them ineligible for the study. However, we are working with the
investigational sites to maximize all efforts on recruiting suitable subjects,
including treatment naive patients. If development activity is maintained as
planned and the current rate of screening failure remains the same, we would
expect that the application for registration of Testosterone Cream would be
likely to be in H2 2008.
Further Phase II studies to support registration are ongoing.
Management believes that Testosterone Cream has the potential to offer a number
of advantages over existing gel-based testosterone products; including more
efficient delivery, reduced alcohol content and overall more patient-friendly,
lotion-like consistency. We continue to be optimistic about the market
potential for our novel Testosterone Cream both in the US and Europe.
InvicorpTM
InvicorpTM is an injectable treatment for erectile dysfunction. Marketing
Authorisations for InvicorpTM have been granted in Denmark and Ardana launched
there during December 2006. The product is also supplied on a named patient
basis, under a Specials licence in the UK.
The European Mutual Recognition Procedure (MRP) to obtain marketing
authorisations in other European territories is expected to commence shortly,
with Denmark acting as the Reference Member State.
Management believes that the potential competitive advantages (e.g. less pain
associated with the injection) over existing alprostadil-based products means
that InvicorpTM should be able to establish a significant market position.
Marketed Products
Emselex(R)
Ardana launched Emselex(R) (darifenacin hydrobromide) in October 2006 in the UK
and it is marketed in collaboration with Novartis Pharmaceuticals UK Limited ('
Novartis').
During June 2007 we announced positive advice from the Scottish Medicines
Consortium (SMC) about Emselex. The OAB market is currently estimated to be
approximately £90 million per annum, of which Scotland contributes £10.5 million
(source: IMS Health).
Emselex(R) is an oral once-daily muscarinic M3 selective receptor antagonist (M3
SRA) for the treatment of overactive bladder ('OAB'). Symptoms of OAB include
urinary urgency (a sudden and compelling desire to pass urine) with, or without,
urge urinary incontinence (involuntary leakage accompanied or immediately
preceded by urgency), usually with urinary frequency (voiding the bladder too
often), and nocturia (waking at night one or more times to void the bladder).
Emselex(R) has shown favourable efficacy, a low incidence of cardiovascular
adverse events and in elderly healthy volunteers did not significantly impair
memory function. We believe that Emselex(R) offers health professionals an
effective and well tolerated new treatment option for patients who experience
overactive bladder symptoms.
The SMC opinion, along with other formulary acceptance, has contributed to
increasing growth in Emselex(R) revenue.
StriantTM SR
StriantTM SR is a mucoadhesive buccal (gum surface) testosterone replacement
therapy for confirmed male hypogonadism. StriantTM SR is marketed to urologists
and endocrinologists in the UK by Ardana's own sales force and in Germany, the
Nordic Region and the Republic of Ireland by our partners. We will continue to
develop our distribution capability around Europe with the appointment of
further strategic partners.
Financial review
The unaudited financial information for the six months ended 30 September 2007
is prepared in accordance with the group's accounting policies based on
International Financial Reporting Standards (IFRSs) as adopted by the European
Union.
On 30 September 2007, Ardana had cash and cash equivalents of £11.0 million (31
March 2007: £16.6 million). Net cash used by operating activities in the six
months ended 30 September 2007 was £5.9 million (six months ended 30 September
2006: £5.8 million) due principally to the investment in research and
development during the period.
Total product sales of StriantTM SR for the six months ended 30 September 2007
were £56,000 (six months ended 30 September 2006: £130,000). Like for like sales
of StriantTM SR in the UK and Republic of Ireland have increased. Overall sales
are down due to the timing of bulk sales to European partners, which are not
evenly spaced across periods.
Total revenue from sale of services for the six months ended 30 September 2007
were £91,000 (six months ended 30 September 2006: nil).
Research and development expenditure for the six months ended 30 September 2007
was £4.9 million (six months ended 30 September 2006: £4.1 million). This
increase in costs reflects the additional clinical activity undertaken across
the portfolio during this period outlined above. Operating loss for the six
months ended 30 September 2007 was £7.2 million (six months ended 30 September
2006: £5.8 million), which is driven by increased sales and marketing activity
related to the promotion of EmselexTM.
Risks and uncertainties
There are a number of potential risks and uncertainties which could have a
material impact on the Group's performance over the remaining six months of the
financial year and could cause actual results to differ materially from expected
and historical results.
Industry Risk
The nature of pharmaceutical development is such that drug candidates may not be
successful due to an inability to demonstrate in a timely manner the necessary
safety and efficacy in a clinical setting to the satisfaction of appropriate
regulatory bodies. The Group may be unable to attract, by itself or from
partners, the funding necessary to meet the high cost of developing its products
through to successful commercialisation.
Financial Risk
Ardana is currently a loss making business which is not sustained by product
revenues alone. For the remainder of the year and the foreseeable future, as
Ardana continues to invest in its development pipeline, the Group will require
external funds such as income from a range of potential collaboration deals and/
or further financing. The ability of the Group to generate such external
financing, and thereby to maintain its development activities at their currently
planned levels and timelines, is discussed below.
Outlook
Ardana is in discussions with potential partners to collaborate on the future
development and commercialisation of Teverelix LA, and concluding these
discussions is management's top priority.
On the strength of interest shown to date by external parties in the product,
and taking into account the stage of current discussions, management firmly
believes that completing a deal is achievable. However, the timing and value of
any deal is uncertain and Ardana's existing cash resources are unlikely to be
sufficient to fund all of the company's development activities for the next
twelve months as currently planned. Therefore, until such a deal is concluded,
the Directors will manage the Group's resources prudently and where appropriate
reschedule its activities in line with available funds.
We look forward with confidence to building on the achievements of the first six
months and to our new CEO Dr Huw Jones reporting on our plans for
commercialisation, outlicensing and development of our products.
INDEPENDENT REVIEW REPORT TO ARDANA PLC
We have been engaged by the company to review the condensed set of financial
statements in the half-yearly financial report for the six months ended 30
September 2007 which comprises the income statement, the balance sheet, the
cash flow statement, the statement of changes in equity, and related notes 1 to
8. We have read the other information contained in the half-yearly financial
report and considered whether it contains any apparent misstatements or material
inconsistencies with the information in the condensed set of financial
statements.
This report is made solely to the company in accordance with International
Standard on Review Engagements 2410 issued by the Auditing Practices Board. Our
work has been undertaken so that we might state to the company those matters we
are required to state to them in an independent review report and for no other
purpose. To the fullest extent permitted by law, we do not accept or assume
responsibility to anyone other than the company, for our review work, for this
report, or for the conclusions we have formed.
Directors' responsibilities
The half-yearly financial report is the responsibility of, and has been approved
by, the directors. The directors are responsible for preparing the half-yearly
financial report in accordance with the Disclosure and Transparency Rules of the
United Kingdom's Financial Services Authority.
As disclosed in note 3, the annual financial statements of the group are
prepared in accordance with IFRSs as adopted by the European Union. The
condensed set of financial statements included in this half-yearly financial
report has been prepared in accordance with International Accounting Standard
34, 'Interim Financial Reporting,' as adopted by the European Union.
Our responsibility
Our responsibility is to express to the Company a conclusion on the condensed
set of financial statements in the half-yearly financial report based on our
review.
Scope of Review
We conducted our review in accordance with International Standard on Review
Engagements (UK and Ireland) 2410, 'Review of Interim Financial Information
Performed by the Independent Auditor of the Entity' issued by the Auditing
Practices Board for use in the United Kingdom. A review of interim financial
information consists of making inquiries, primarily of persons responsible for
financial and accounting matters, and applying analytical and other review
procedures. A review is substantially less in scope than an audit conducted in
accordance with International Standards on Auditing (UK and Ireland) and
consequently does not enable us to obtain assurance that we would become aware
of all significant matters that might be identified in an audit. Accordingly, we
do not express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that causes us to believe
that the accompanying interim financial information is not prepared, in all
material respects, in accordance with International Accounting Standard 34 as
adopted by the European Union and the Disclosure and Transparency Rules of the
United Kingdom's Financial Services Authority.
Deloitte & Touche LLP
Chartered Accountants and Registered Auditor
9 October 2007
Edinburgh, United Kingdom
Condensed consolidated income statement
6 months ended 30 September 2007
Notes 6 months ended 30 6 months ended 30 Year ended 31
September September March
2007 2006 2007
£'000 £'000 £'000
Revenue: continuing operations
Product revenue 66 130 240
Revenue from sale of services 91 - 17
_____ ____ ____
Total revenue 4 157 130 257
Operating expenses
Cost of product sales (16) (34) (69)
Research and development (4,870) (4,094) (8,889)
Other operating expenses (2,478) (1,829) (4,324)
____ ____ ____
Total operating expenses (7,364) (5,957) (13,282)
____ ____ ____
Operating loss: continuing operations 7 (7,207) (5,827) (13,025)
Interest receivable 352 358 817
____ ____ ____
Loss on ordinary activities before
taxation
(6,855) (5,469) (12,208)
Taxation 469 291 837
____ ____ ____
Loss for the financial year (6,386) (5,178) (11,371)
____ ____ ____
Basic and diluted loss per share 6 (9.7p) (9.3p) (18.9p)
____ ____ ____
Condensed consolidated balance sheet
At 30 September 2007
Notes 30 September 30 September 31 March
2007 2006 2007
£'000 £'000 £'000
Non-current assets
Intangible assets 5 554 600 585
Property, plant and equipment 19 9 14
____ ________ ____
573 609 599
Current assets
Inventories 54 40 298
Trade and other receivables 652 926 738
Research and development tax credits 469 960 837
receivable
Cash and cash equivalents 10,984 13,737 16,576
____ ____ ____
12,159 15,663 18,449
____ ____ ____
Total assets 12,732 16,272 19,048
____ ____ ____
Current liabilities
Trade and other payables (2,466) (3,811) (2,510)
____ ____ ____
Total liabilities (2,466) (3,811) (2,510)
____ ____ ____
Net assets 10,266 12,461 16,538
____ ____ ____
Equity
Share capital 655 557 655
Other equity 489 290 375
Share premium account 37,135 27,048 37,135
Merger reserve 34,451 34,451 34,451
Own shares (13) (13) (13)
Retained earnings (62,451) (49,872) (56,065)
____ ____ ____
Total equity 10,266 12,461 16,538
____ ____ ____
Condensed consolidated cash flow statement
6 months ended 30 September 2007
Notes 6 months ended 6 months Year
30 September ended 30 September ended 31 March
2007 2006 2007
£'000 £'000 £'000
Cash flows from operating activities
Cash used by operations 7 (6,771) (6,258) (14,212)
Corporation tax received 837 491 1,160
____ ____ ____
Net cash used by operating activities (5,934) (5,767) (13,052)
____ ____ ____
Investing activities
Interest received 352 344 817
Purchases of property, plant and equipment (10) (3) (13)
Purchase of product rights - - (600)
____ ____ ____
Net cash from investing activities 342 341 204
____ ____ ____
Financing activities
Issue of shares - 30 11,023
Cost of share issue - - (1,068)
Equity share options exercised - - 330
Sale of own shares - 82 88
____ ____ ____
Net cash from financing activities - 112 10,373
____ ____ ____
Net decrease in cash and cash equivalents (5,592) (5,314) (2,475)
Cash and cash equivalents at beginning of period 16,576 19,051 19,051
____ ____ ____
Cash and cash equivalents at end of period 10,984 13,737 16,576
____ ____ ____
Condensed consolidated statement of changes in equity
6 months ended 30 September 2007
Share Other Share premium Merger Own Retained Total
capital equity reserve shares earnings
£'000 £'000 £'000 £'000 £'000 £'000 £'000
Opening balances
1 April 2007 655 375 37,135 34,451 (13) (56,065) 16,538
_____ _____ _____ _____ _____ _____ _____
Recognised directly in
equity
Share-based payment - 114 - - - - 114
_____ _____ _____ _____ _____ _____ _____
Net change directly in - 114 - - - - 114
equity
_____ _____ _____ _____ _____ _____ _____
Loss for the period - - - - - (6,386) (6,386)
_____ _____ _____ _____ _____ _____ _____
Total movements - 114 - - - (6,386) (6,272)
_____ _____ _____ _____ _____ _____ _____
Equity at the end of the 655 489 37,135 34,451 (13) (62,451) 10,266
period
_____ _____ _____ _____ _____ _____ _____
Condensed consolidated statement of changes in equity
6 months ended 30 September 2006
Share Other Share Merger Own Retained Total
capital equity premium reserve shares earnings
£'000 £'000 £'000 £'000 £'000 £'000 £'000
Opening balances
1 April 2006 556 240 26,949 34,451 (95) (44,700) 17,401
_____ _____ _____ _____ _____ _____ _____
Recognised directly in
equity
Issue of shares 1 - 99 - - - 100
Movement in own shares - - - - 82 - 82
Gain on sale of EBT shares - - - - - 6 6
Share-based payment - 50 - - - - 50
_____ _____ _____ _____ _____ _____ _____
Net change directly in 1 50 99 - 82 6 238
equity
_____ _____ _____ _____ _____ _____ _____
Loss for the period - - - - - (5,178) (5,178)
_____ _____ _____ _____ _____ _____ _____
Total movements 1 50 99 - 82 (5,172) (4,940)
_____ _____ _____ _____ _____ _____ _____
Equity at the end of the 557 290 27,048 34,451 (13) (49,872) 12,461
period
_____ _____ _____ _____ _____ _____ _____
Condensed consolidated statement of changes in equity
12 months ended 31 March 2007
Share Other Share Merger Own Retained Total
capital equity premium reserve shares earnings
£'000 £'000 £'000 £'000 £'000 £'000 £'000
Opening balances
1 April 2006 556 240 26,949 34,451 (95) (44,700) 17,401
_____ _____ _____ _____ _____ _____ _____
Recognised directly in
equity
Issue of shares 96 - 10,927 - - - 11,023
Cost of share issue - - (1,068) - - - (1,068)
Equity share options 3 - 327 - - - 330
exercised
Movement in own shares - - - - 82 - 82
Gain on sale of EBT shares - - - - - 6 6
Share-based payment - 135 - - - - 135
_____ _____ _____ _____ _____ _____ _____
Net change directly in
equity
99 135 10,186 - 82 6 10,508
_____ _____ _____ _____ _____ _____ _____
Loss for the period - - - - - (11,371) (11,371)
_____ _____ _____ _____ _____ _____ _____
Total movements 99 135 10,186 - 82 (11,365) (863)
_____ _____ _____ _____ _____ _____ _____
Equity at the end of the
period
655 375 37,135 34,451 (13) (56,065) 16,538
_____ _____ _____ _____ _____ _____ _____
Notes to the condensed consolidated financial information
6 months ended 30 September 2007
1. General information
The comparative financial information for the year ended 31 March 2007 does not
constitute statutory accounts as defined in section 240 of the Companies Act
1985. A copy of the statutory accounts for that year has been delivered to the
Registrar of Companies. The auditors' report on those accounts was not
qualified and did not contain statements under section 237(2) or (3) of the
Companies Act 1985.
2. Basis of preparation
Going concern
Ardana is currently a loss making business which is not sustained by product
revenues alone. For the foreseeable future and over the next year, as Ardana
continues to invest in its development pipeline, the company's activities will
require external funds such as income from collaboration deals, and/or further
financing.
The interim financial information has been prepared on a going concern basis
which assumes that the company will continue in operational existence for the
foreseeable future. As at 30 September 2007 Ardana had cash resources of £11.0
million. The Directors have reviewed the working capital requirements of the
Group over the next twelve months. The Group's working capital requirements are
sensitive to future events such as collaboration deals, which typically result
in upfront and milestone cash receipts. Ardana is in discussions with potential
partners to collaborate on the future development and commercialisation of
Teverelix LA and other products in its portfolio. Management believes that
completing a deal on Teverelix LA is achievable, but the timing and value of any
deal is uncertain. Until such a deal is concluded the Directors will manage the
Group's resources prudently and where appropriate reschedule its activities in
line with available funds. The directors continue to consider other options for
funding the business.
3. Accounting policies
The condensed set of financial statements has been prepared using accounting
policies consistent with International Financial Reporting Standards (IFRS) and
in accordance with IAS 34 'Interim Financial Reporting'.
The same accounting policies, presentation and methods of computation are
followed in the condensed set of financial statements as applied in the Group's
latest annual audited financial statements.
Change in accounting policies
In the current financial year, the Group will adopt International Financial
Reporting Standard 7 'Financial Instruments: Disclosures' (IFRS7) for the first
time. As IFRS7 is a disclosure standard, there is no impact of that change in
accounting policy on the half-yearly financial report. Full details of the
change will be disclosed in our annual report for the year ended 31 March 2008.
4. Business and Geographical Segments
Primary reporting format - business segments
The Directors consider that the primary reporting format is by business segment.
The Group discovers, develops and markets a range of pharmaceutical products.
The Directors consider that there is only one business segment, being
pharmaceuticals. A key part of the Company's strategy is to realise the value of
its intellectual property portfolio through co-development and outlicensing
opportunities which may generate significant revenue in the future, however, at
present this does not represent a separate segment for reporting.
Secondary reporting market - geographical segments
The Group's operations are located in the UK, with commercialisation and
development activities being carried out in the UK and the Rest of Europe.
The following table provides an analysis of the Group's revenue by geographical
market.
Revenue from external customers by geographical market 6 months ended 6 months ended 30 Year
30 September September ended 31 March
2007 2006 2007
£'000 £'000 £'000
UK 153 51 131
Rest of Europe 4 79 126
____ ____ ____
157 130 257
____ ____ ____
The following table is an analysis of the carrying amount of segment assets.
Total assets by geographical market 6 months ended 6 months ended 30 Year
30 September September ended 31 March
2007 2006 2007
£'000 £'000 £'000
UK 10,266 12,461 16,538
Rest of Europe - - -
____ ____ ____
10,266 12,461 16,538
____ ____ ____
5. Intangible assets
Product rights and other intangible assets acquired are initially recorded at
cost and amortised over their useful life on a straight line basis from the date
of the commercial launch. In the year ended 31 March 2007 £0.6 million was
capitalised in relation to the acquired product rights for Emselex(R) in the UK.
6. Loss per share
Basic loss per share is calculated by dividing the loss for the financial period
after taxation by the weighted average number of ordinary shares in issue during
the year.
The basic loss per share is calculated as follows:-
6 months ended 6 months ended 30 Year
30 September September ended 31 March
2007 2006 2007
£'000 £'000 £'000
Loss after taxation (£'000) (6,386) (5,178) (11,371)
Weighted average number of ordinary shares in issue 65,511,729 55,570,020 60,158,787
____ ____ ____
Basic loss per share (9.7p) (9.3p) (18.9p)
____ ____ ____
IAS requires presentation of diluted earnings per share when a company could be
called upon to issue shares that would decrease net profit or increase net loss
per share. For a loss making company with outstanding share options, net loss
per share would only be increased by the exercise of out-of-money options.
Since it seems inappropriate to assume that option holders would exercise
out-of-money options, no adjustment has been made to diluted loss per share for
out-of-money share options.
7. Cash used by operations
6 months ended 6 months ended 30 Year
30 September September ended 31 March
2007 2006 2007
£'000 £'000 £'000
Operating loss (7,207) (5,827) (13,025)
Depreciation 5 9 14
Amortisation of intangible assets 31 - 15
Decrease in inventories 244 36 (222)
Increase in trade and other receivables 86 (383) (279)
Decrease in trade and other payables (44) (149) (850)
Share-based payments 114 50 135
Gain on sale of EBT shares - 6 -
____ ____ ____
Cash used by operations (6,771) (6,258) (14,212)
____ ____ ____
8. Related party transactions
There have been no related party transactions entered into by the Group during
the first six months of the current financial year.
This information is provided by RNS
The company news service from the London Stock Exchange
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