Interim Results - Replacement

Aortech International PLC
21 December 2004


For Immediate Release                                      21 December 2004



The following replaces the Interim Results for the six months ended 30 September
2004, issued on 21 December 2004 at 07:00a.m. under the RNS number 6480G.



In the Consolidated Balance Sheet, Creditors: amounts falling due within one
year, for the six months ended 30 September 2004, should read £396,601.




                            AorTech International plc

                          ('AorTech' or 'the Company')



           Interim Results for the six months ended 30 September 2004


AorTech International plc, the biomaterials Intellectual Property and Material
Manufacturing Company is pleased to announce its Interim Results for the six
months ended 30 September 2004.


Operational Highlights



•    Significant interest in Breast Implant technology

•    Dialogue commenced with potential licensees

•    Positive FDA meeting to discuss Beast Implant Testing Protocol

•    Progress with polymer heart valves



Financial Highlights



•     Turnover on Continuing Operations £38,101 (2003: £212,414)

•     Group operating loss £947,786 (2003: £1,111,200)

•     Loss Before Taxation £838,262 (2003: £1,018,285)

•     Net cash of £5,030,227 (2003: £6,199,292)



Commenting on the progress of the Company, Laurie Rostron, Non-Executive
Chairman said:



'The interest in AorTech's breast implant technology has given the Board
confidence to progress the development of the technology and to commence
discussions with potential licensing partners.



'AorTech, as an early stage biomaterials company, now has a pipeline of
applications, supported by strong intellectual property, which we are confident
will create shareholder value in the medium term.'





For further information please contact:




AorTech International plc                            020 7466 5000 (today)
Laurie Rostron, Non-Executive Chairman           01698 746699 (thereafter)
Frank Maguire, Chief Executive

Buchanan Communications                                     020 7466 5000
Ben Willey, Lisa Baderoon, Rebecca Skye Dietrich



Visit AorTech's website at: www.aortech.com



Chairman's Statement



Results



For the six months ended 30th September 2004, the Company had a turnover of
£38,101, operating costs of £976,958, down from £1,181,960 for the same period
in the previous year, and a loss before taxation of £838,262 again down from
£1,018,285 in the previous year. The cash position at £5,030,227 compares with
£6,199,292 at the same time last year.



These financial results reflect the early stage nature of the business but do
not describe the significant progress that has been achieved during the period.



Breast Implants



Without doubt the progress on the development of the Elast-Eon breast implant
has overshadowed all other activities to a point where it has become central to
the future development strategy of the Company. As is often the case with early
stage development companies, the change of strategy has been somewhat
opportunistic and has accelerated as a consequence of the development of an
alternative fill material for which new intellectual property has now been
filed.



It is the Directors' view that there is a significant latent demand from
patients, surgeons and regulatory authorities for an alternative to the all
silicone breast implant.



In October we met, at our instigation, with the US Federal Drug Administration
to discuss the baseline test results of Elast-Eon technology in accordance with
the FDA 'Guidance for Breast Implants', a set of guidelines established to set
the ground rules for the development of new breast implants. This meeting was
positive, we received useful feedback on the calibre of our material testing
data and afterwards the Board approved the proposal to move ahead with the
development of the next generation of the breast implant device. Manufacturing
processes are currently being defined and prototype devices have been produced.
The Directors believe that an Elast-Eon breast implant will be significantly
more reliable and safer than the existing saline or silicone filled implants.



The technology has attracted the attention of the American Society of Aesthetic
and Plastic Surgeons and the Company has received an invitation to present a
paper on its next-generation breast implant at the upcoming Annual Society
meeting in New Orleans in April 2005.



The Company is currently in discussion with large potential industry partners, a
number of whom have expressed significant interest although it is too early to
finalise a license agreement.



This remains a high risk project but the evidence is emerging that it could also
have a high potential reward.



Heart Valves



AorTech's intellectual property position continued to improve when in October
2004, the European Patent Office granted patent 1006949B which is part of the
Company's portfolio of polymer heart valve technology and includes surgical as
well as percutaneous designs.  In October 2004 the company received a positive
opinion from the European Patent Office regarding the patentability of the
claims made in the M 95 C patent application.



During the past year, there has been significant industry investment in
percutaneous heart valves for which the Company's M 95 C technology and
intellectual property offers several advantages over existing technology.



It is the Board's view that these events indicate that AorTech technology and
intellectual property which is now of considerably more value than originally
forecast.  However, to date the Company has been unable to find a partner for
this project.



The Board believes that it is not in the shareholders interest to license this
technology cheaply.  Although this will take longer, the plan is to carry out
further bench testing and pre-clinical trials in a manner that will support an
FDA Investigational Device Exemption before the commencement of a full clinical
trial on the valve.  The Company will continue to seek a partner for this
development project where the full value of the technology has a chance of being
realised.



Licensing and Supply



The material licensing and supply activities, the now rather more routine part
of the business, continue to make progress. The content of the FDA Master File
has been increased and the first clinical use of Elast-Eon in a royalty bearing
application is expected to occur in 2005.



There are currently 5 active orthopaedic and 8 other long-term material
applications under active evaluation with a partner.  Whilst some of these
appear tantalisingly close to completion, experience has shown that these
business development cycles are by their nature, lengthy.



Board Changes



We announced at the end of October that Ian Cameron was stepping down from his
position as Finance Director but would remain as a Non Executive Director and
Company Secretary in the short term.  Ian retired from the board with effect
from 20th December 2004 to concentrate on his role as Finance Director at i-mate
plc.  I would like to thank Ian for his considerable contribution to the Company
over the past 6 years and we wish him well in his new role.



David Parsons, MA, ACIS has joined us as Company Secretary and Chief Financial
Officer and I am delighted to welcome him to the team.



Summary



The Company' strategy is to develop the material license and supply component of
the business to a point where the Company is profitable and then to increase
shareholder value by identifying and developing selected devices through to the
point of clinical trials. The Board believes that these selected device step
outs from the material licensing have the potential to generate significant
up-front, milestone and royalty income through partnerships with large medical
device companies. The Elast-Eon breast implant is a prime example of the type of
step outs that the Company is seeking and, although not with out risk, the Board
is keen to maximise the Company's efforts to achieve this goal with this
product.



Laurie Rostron



CONSOLIDATED PROFIT AND LOSS ACCOUNT (unaudited)


                                                   Six months ended 30  Six months ended 30  Year ended 31 March
                                                        September 2004       September 2003                 2004
                                          Note                       £                    £                    £

Turnover                                   2                    38,101              212,414              360,185

Cost of sales                                                  (8,929)            (141,654)             (30,649)

Gross profit                                                    29,172               70,760              329,536


Selling and marketing costs                                  (140,646)            (111,408)            (296,492)
Administrative expenses                                      (836,312)          (1,070,552)          (2,230,553)
Administrative expenses include:
Development expenditure                                      (287,420)            (161,088)            (559,032)
Amortisation of intangible fixed assets                       (46,427)             (51,050)             (97,863)

Group operating loss                                         (947,786)          (1,111,200)          (2,197,509)

Exceptional items                                                    -                    -              552,856

Loss on ordinary activities before         2                 (947,786)          (1,111,200)          (1,644,653)
interest
Interest receivable                                            109,524               92,915              195,096

Loss on ordinary activities before         2                 (838,262)          (1,018,285)          (1,449,557)
taxation
Taxation                                   3                         -            1,252,332            1,976,817

(Loss)/Profit for the financial period                       (838,262)              234,047              527,860

(Loss)/Profit per ordinary share           4                  (22.00p)                6.14p               13.84p


All of the turnover and operating losses are derived from continuing operations.



Statement of total recognised (losses)/profits


(Loss)/Profit for the financial period                       (838,262)              234,047              527,260

Currency translation differences                              (66,209)              250,406              130,024
arising on consolidation

Total recognised (losses)/profits                            (904,471)              484,453              657,284






CONSOLIDATED BALANCE SHEET (unaudited)


                                                     30 September 2004    30 September 2003        31 March 2004
                                                                     £                    £                    £

Fixed assets

Intangible assets                                            1,474,060            1,684,640            1,565,806
Tangible assets                                                206,722              278,927              235,608

                                                             1,680,782            1,963,567            1,801,414

Current assets

Stocks                                                          50,744                    -               48,853
Debtors                                                        296,492              168,977              185,848
Cash at bank                                                 5,030,227            6,199,292            5,968,200

                                                             5,377,463            6,368,269            6,202,901

Creditors: amounts falling due within                        (396,601)            (668,552)            (438,200)
one year

Net current assets                                           4,980,862            5,699,717            5,764,701




Total assets less current liabilities                        6,661,644            7,663,284            7,566,115


Accruals and deferred income                                         -            (270,000)                    -


Net assets                                                   6,661,644            7,393,284            7,566,115


Capital and reserves

Called up share capital                                      9,525,695            9,525,695            9,525,695
Share premium account                                       63,359,594           63,359,594           63,359,594
Other reserve                                              (2,003,143)          (2,003,143)          (2,003,143)
Profit and loss account                                   (64,220,502)         (63,488,862)         (63,316,031)


                                                             6,661,644            7,393,284            7,566,115






CONSOLIDATED CASH FLOW STATEMENT (unaudited)


                                                   Six months ended 30  Six months ended 30  Year ended 31 March
                                                        September 2004       September 2003                 2004
                                          Note                       £                    £                    £

Net cash outflow from operating
activities

Net cash outflow before exceptional                        (1,029,725)            (850,772)          (1,898,890)
items
Outflow related to exceptional items                                 -          (1,263,753)          (1,335,862)


Net cash outflow from operating                            (1,029,725)          (2,114,525)          (3,234,752)
activities
Returns on investment and servicing of                         109,524              124,178              188,359
finance
Taxation                                                             -            1,252,332            2,075,716
Capital expenditure and financial                             (11,374)               55,423              121,532
investment
Disposals                                                            -                    -             (50,000)


Cash outflow before management of                            (931,575)            (682,592)            (899,145)
liquid resources and financing
Management of liquid resources                                 924,297              884,132              734,983


(Decrease)/Increase in cash in the         5                   (7,278)              201,540            (164,162)
period






NOTES TO THE INTERIM FINANCIAL STATEMENTS (unaudited)

FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2003

1 BASIS OF PREPARATION


The interim financial statements have been prepared in accordance with the
guidance published by the

Accounting Standards Board and on the basis of the accounting policies set out
in the Group's 2004 statutory accounts.



The interim financial statements were approved by a duly appointed and
authorised committee of the Board of Directors on 20 December 2004 and are
unaudited.



The information shown for the year ended 31 March 2004 does not constitute
statutory accounts within the meaning of section 240 of the Companies Act 1985
and has been extracted from the full accounts for the year ended 31 March 2004
which have been filed with the Registrar of Companies. The report of the
auditors on these accounts was unqualified and did not contain a statement under
either section 237(2) or section 237(3) of the Companies Act 1985.



2 SEGMENTAL ANALYSIS BY CLASS OF BUSINESS AND GEOGRAPHICAL AREA



(a)  class of business The Group operates in one class of business.



(b)  geographical area The analysis by geographical area of the Group's
turnover, loss before tax and net assets is set out below:


                                          Six months ended 30      Six months ended 30     Year ended 31 March
                                               September 2004           September 2003                    2004

                                          Sales by   Sales by      Sales by   Sales by      Sales by  Sales by
                                       destination     origin   destination     origin   destination    origin
(i) turnover                                                £                        £                       £

Geographical segment

United Kingdom                                  -           -         -              -          -            -
Rest of Europe                                  -           -         -              -          -            -
Rest of World                              38,101      38,101   212,414        212,414    360,185      360,185


                                            38,101     38,101     212,414      212,414     360,185     360,185






                                          Six months ended 30      Six months ended 30 Year ended 31 March 2004
                                               September 2004           September 2003
(ii) Profit/(loss) before                                   £                        £                        £
tax

Geographical segment

United Kingdom                                      (391,298)                (830,269)                (762,991)
Rest of Europe                                              -                   26,471                 (29,872)
Rest of World                                       (556,488)                (307,402)                (851,790)


Loss before interest                                (947,786)              (1,111,200)              (1,644,653)

Net interest receivable                               109,524                   92,915                  195,096


Loss before taxation                                (838,262)              (1,018,285)              (1,449,557)






                                            30 September 2004        30 September 2003            31 March 2004
(iii) net assets                                            £                        £                        £

Geographical segment

United Kingdom                                      4,772,111                5,189,669                5,534,686
Rest of Europe                                              -                    8,044                        -
Rest of World                                       1,889,533                2,195,571                2,031,429


                                                    6,661,644                7,393,284                7,566,115




3 TAXATION



The taxation credit for the six months to 30 September 2003 and for the year to
31 March 2004 arose from cash received during the periods in respect of research
and development credits.



4 (LOSS)/PROFIT PER ORDINARY SHARE



The basic (loss)/profit per ordinary share is calculated on the loss of the
Group of £838,262 for the six months to 30 September 2004 (six months ended 30
September 2003: profit £234,047, year ended 31 March 2004: profit £527,260) and
on 3,810,278 (six months ended 30 September 2003: 3,810,278, year ended 31 March
2004: 3,810,278) equity shares, being the weighted average number of shares
deemed to be in issue after adjusting for the ten for one share consolidation of
1 September 2003.



5 ANALYSIS OF NET FUNDS


                                    1 April 2004           Cash flow           Exchange   30 September 2004
                                                                            differences
                                               £                   £                  £                   £

Net cash


Cash at bank and in hand               5,968,200           (931,575)            (6,398)           5,030,227
Deposits treated as liquid           (5,703,834)             924,297                  -         (4,779,537)
resources


                                         264,366             (7,278)            (6,398)             250,690


Liquid resources

Deposits included in cash              5,703,834           (924,297)                  -           4,779,537


Net funds                              5,968,200           (931,575)            (6,398)           5,030,227





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