Preliminary results for the year ended 31 Decem...
28 May 2010
GB0001646941/GBP/PLUS-exn
EDEN RESEARCH PLC
("Eden" or "Company")
Preliminary results for the year ended 31 December 2009
Eden Research plc, a leading UK agrochemical development company, today announces its preliminary results for
the year ended 31 December 2009.
CHAIRMAN'S REVIEW
Eden Research has not been immune to the problems that the UK and World economies have faced in the financial
markets in the last twelve months. At the same time, the company has had to accommodate the consequences of
the radical changes in the European Union regulatory approval systems for the product registration of new
pesticides. In spite of this, we have continued to make considerable progress in achieving our strategic
goals.
Overview
The year continued with the strategic aim of the board remaining that of moving towards the commercialisation
of our product range:
* Continued progress with the registration of our lead product (3AEY);
* Further development work to confirm the enhanced efficacy and superior environmental qualities of
our other products;
* Continued development of new formulation technology to utilise the properties of terpenes to improve
ease of use to the grower through granule formulation and increased product loading which will allow
the same amount of actives to be applied at a lower field use rate;
* Identifying potential to control post harvest soft rot diseases for high value and highly perishable
fruit and vegetables;
* Identifying further insect pest applications for our terpene products in a range of uses both in
agriculture/horticulture and household and personal care markets;
* Strengthening our relationships with our existing commercial partners to ensure the opportunities for
our products in the major agricultural chemical markets are fully exploited; and
* Identifying further relationships with potential commercial partners, especially for new fungicidal
uses of our products.
Bringing 3AEY to Market
Our efforts here continued in 2009 to focus on addressing the small number of regulatory questions that had
been raised in 2008 as described in the 2008 annual report. The additional studies required were commissioned
and executed with the results fully exonerating the claims that we have made for the product and removing the
suggestions of any side effects. However, in answering these questions there has been an inevitable delay in
the approval of the initial application and additional costs have been incurred.
The outstanding data was submitted to the UK authority (CRD) in September 2009 and in March 2010, CRD
submitted the DAR to EFSA with the recommendation that Eden undertake an additional assay in order to prevent
any potential problems at EFSA or national approval stage. The submission of the DAR alone facilitates
further progress with the commercial development of the product. As stated last year by achieving EFSA
approval for the individual active ingredients of 3AEY we will achieve significant future regulatory cost
savings time in approving new products based around these ingredients.
In other geographic areas we have made positive progress with 3AEY. Our licensee in East Africa, Lachlan Kenya
Ltd, successfully completed a number of pre-registration trials for the control of Powdery Mildew and Botrytis
on Roses, a major export crop for Kenya.
Performance under high disease pressure has exceeded expectations with performance and crop safety being at
least as good as their Industry standards. The formal registration process will begin in spring 2010 and our
partner is excited at the prospects for rapid commercialisation within the Kenyan Flower industry.
We also concluded a new licensing deal for the North African region (Morocco, Algeria, Tunisia, Libya, Egypt,
Oman and Lebanon) with Environmental Solutions (North Africa) Limited ("ESNA"). The focus in these markets is
to capitalise on the data investments already made by Eden for the EU to expedite registrations at the
earliest opportunity.
Trials undertaken by independent researchers in Egypt on table grapes have again confirmed the excellent
performance of our lead product compared to producers' standard disease control programmes.
Meetings by ESNA with the key experts in the regions Regulatory Ministries have been very positive due to the
inherent low-risk nature of our products and technology.
Nematodes
In 2009 Eden concentrated on testing its most promising products in development field trials in Europe.
The development work, which will form part of the registration dossier, examined efficacy against a number of
nematode species attacking crops including tomato, peppers, cucurbits, beans and carrots.
Results have shown that two formulations based upon two of the active substances contained within our Botrytis
product (3AEY) show the best overall levels of efficacy and these will be the focus of our future short term
efforts in 2010 field trials.
As the active substance dossiers are already complete, the future investment to develop these formulations is
significantly reduced with a shorter overall timeline for introduction.
Conventional nematode products based on highly toxic insecticides continue to be under close scrutiny by all
Regulatory Agencies and there is significant interest in bringing low risk terpene products into this well
established commercial market.
Discussions with a number of suitable commercial partners are at an advanced stage.
Spider Mites and Whitefly
Following the successful screening trials of several Eden terpene products in 2008 on common horticultural
glasshouse pests e.g. spider mite and whitefly, a number of lead candidate Eden terpene products were sent for
field testing in key glasshouse crops such as tomato, pepper and beans in Southern Europe. As well as showing
excellent pest control in the screening, these products also showed no or very little activity on a number of
key beneficial insects used in glasshouse crops as part of IPM (Integrated Pest Management) strategies.
Conventional insecticides tend to be very broad-spectrum and will kill the beneficials as well as the target
pests.
Results from trials reported in 2009 have not resulted in a clear definition of a leading candidate to proceed
to Registration trials due to varying population levels across the trials in different countries. Some
additional screening trials will be required before final decisions can be made.
Other activities
In addition to our main emphasis on fungicides, acaricide and nematode control products we have continued to
identify the potential of encapsulated terpenes by:
* Developing new granule formulations to further expand product usage once commercialised;
* Identifying further insect pest applications for our terpene products in a range of uses both in
agriculture/horticulture and household and personal care markets; and
* Identifying potential use of Eden's terpene products for controlling diseases in fruit and vegetables
post harvest. Loss of potentially valuable crops from soft rot diseases after harvest is a major
issue to growers worldwide.
At the end of 2009 Eden concluded a deal with Teva Animal Health Inc, St Joseph, Missouri, USA to licence out
our proprietary encapsulated terpene technology for use in the veterinary area. Further development will be
undertaken by TEVA under the guidance of a Joint Steering group in which Eden will be involved. Licence and
milestone fees of $1.05m have been agreed together with future royalties on any products commercialised.
Commercial Prospects
Interest in and support for our technology from distributors, growers and regulators continues to grow as the
pressure to find new ways to control damaging pests and diseases increases, whilst at the same time producing
sufficient quality affordable food to feed a rapidly expanding world population.
We have concluded our new licensing arrangements with ESNA for North Africa as already outlined which will
bring to Eden £170,000 in up-front and milestone payments plus future royalties on sales.
We are also receiving enquiries from potential partners interested in licensing our platform encapsulation
technology with their own compounds - a potential revenue stream where Eden's investment risk is much reduced.
The Senior Management
With the submission of the final data on 3AEY to the CRD in the summer of 2009, our Managing Director, Tim
Griffiths decided that as this objective of the company had been met that he wished to relinquish the role of
Managing Director although he will remain as a consultant on certain key issues to the Company. The Board
reviewed the current management structure and announced that with effect the Company would be run by a strong
management committee comprising:
Sir Ben Gill Chairman
Ken Brooks Executive Deputy Chairman
Clive Newitt Managing Director
Alex Abrey Chief Financial Officer
Outlook
Eden's team has, as highlighted, new project areas for initial testing of both existing and new combination
terpene products in 2010 leading to continued development and registration of the terpene products in global
agriculture and horticulture.
The changes in the European Union Pesticide regulatory process, mentioned earlier, also mean that the future
of a wide range of traditional chemicals is under threat from the regulators with a large number coming up for
review between 2012 and 2020 and many expected to be banned. This opens up a huge potential for a wide range
of uses for Eden's low risk products and the continued success of Eden Research plc in developing and
registering a wide range of products into the global market.
Sir Ben Gill
Chairman
UNAUDITED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2009
2009 2008
Unaudited Audited
£ £
CONTINUING OPERATIONS
Revenue 192,815 84,003
Cost of sales - -
__________ __________
GROSS PROFIT 192,815 84,003
Administrative expenses
- normal (835,744) (1,334,116)
- amortisation of intangible assets (593,192) (604,340)
- share based payments (369,269) (173,729)
__________ __________
Total administrative expenses (1,798,205) (2,112,185)
Other operating income 25,350 -
__________ __________
OPERATING LOSS (1,580,040) (2,028,182)
Finance costs (157,452) (123,438)
Finance income 17 3,148
__________ __________
LOSS BEFORE TAX (1,737,475) (2,148,472)
Tax 66,094 47,235
__________ __________
LOSS FOR THE YEAR attributable to
equity shareholders of the parent (1,671,381) (2,101,237)
OTHER COMPREHENSIVE income
for the year net of tax - -
__________ __________
Total comprehensive income for the year (1,671,381) (2,101,237)
__________ __________
LOSS PER SHARE
- basic and diluted (2.93)p (3.86)p
__________ __________
UNAUDITED CONSOLIDATED AND COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2009
Share Share Merger Warrant Retained
capital premium reserve reserve earnings Total
£ £ £ £ £ £
Balance at 1 January 2008 559,736 12,387,217 10,209,673 2,441,708 (19,407,478) 190,856
Total comprehensive income - - - - (2,101,237) (2,101,237)
Transactions with owners
- issue of shares 3,397 728,902 - - - 732,299
- Options granted - - - 431,795 - 431,795
- Options exercised/lapsed - - - (752,866) 752,866 -
_______ _______ _______ _______ _______ _______
Transactions with owners 3,397 12,116,119 10,209,673 (321,071) (20,755,849) 1,164,094
_______ _______ _______ _______ _______ _______
Balance at 1 January 2009 563,233 13,116,119 10,209,673 2,120,637 (20,755,849) 5,253,713
Total comprehensive income - - - - (1,671,381) (1,671,381)
Transactions with owners
- Issue of share 54,191 1,029,634 - - - 1,083,825
- Options granted - - - 369,269 - 369,269
- Options exercised/lapsed - - - (303,633) 303,633 -
_______ _______ _______ _______ _______ _______
Transactions with owners 54,191 1,029,634 - 65,636 303,633 1,453,094
_______ _______ _______ _______ _______ _______
Balance at 31 December 2009 617,324 14,145,753 10,209,673 2,186,273 (22,123,597) 5,035,426
_______ _______ _______ _______ _______ _______
UNAUDITED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2009
2009 2008
Unaudited Audited
£ £
ASSETS
NON-CURRENT ASSETS
Intangible assets 7,976,070 8,365,870
Property, plant and equipment - 6,926
__________ __________
7,976,070 8,372,796
__________ __________
CURRENT ASSETS
Trade and other receivables 36,079 177,791
Cash and cash equivalents 81,728 13,065
__________ __________
117,807 190,856
__________ __________
TOTAL ASSETS 8,093,877 8,563,652
__________ __________
LIABILITIES
CURRENT LIABILITIES
Trade and other payables 1,009,216 1,038,253
Financial liabilities - borrowings
- Convertible loan notes 2,049,235 2,271,686
__________ __________
TOTAL CURRENT LIABILITIES AND
TOTAL LIABILITIES 3,058,451 3,309,939
__________ __________
EQUITY
Called up share capital 617,324 563,133
Share premium account 14,145,753 13,116,119
Merger reserve 10,209,673 10,209,673
Warrant reserve 2,186,273 2,120,637
Retained earnings (22,123,597) (20,755,849)
__________ __________
TOTAL EQUITY attributable to equity
Shareholders of the parent 5,035,426 5,253,713
__________ __________
TOTAL EQUITY AND LIABILITIES 8,093,877 8,563,652
__________ __________
BASIS OF PREPARATION
1. The figures for the year ended 31 December 2009 and 2008 do not constitute statutory accounts within the
meaning of s435 of the Companies Act 2006. The figures for the year ended 31 December 2009 have been
extracted from the statutory accounts for that year which have yet to be delivered to the Registrar of
Companies and on which the auditor has yet to issue an opinion. The figures for the year ended 31 December
2008 have been extracted from the statutory accounts for that year which have been delivered to the
Registrar of Companies and on which the auditor issued an unqualified audit report, modified to include an
emphasis of matter with regard to going concern. The auditor has indicated that their report on the
statutory accounts for the year ended 31 December 2009 will be modified with regard to going concern. No
statement was made by the auditor under section 237 (2) or (3) of the Companies Act 1985 in respect of the
31 December 2008 statutory accounts. This announcement was approved by the Board of Directors on 28 May
2010.
The Group has applied consistent accounting policies in preparing the preliminary financial statements for
the year ended 31 December 2009 and the comparative information for the year ended 31 December 2008.
The preliminary financial information in this report has neither been audited nor reviewed by the
Company's auditors.
2. The directors do not recommend the payment of a final dividend (2008: £nil).
3. The directors do not anticipate that the unaudited figures announced will change materially from the
audited figures when released.
4. These financial statements are presented in sterling as that is the currency of the primary economic
environment in which the Group operates.
5. Copies of the 2009 Annual Report and Accounts will be posted to shareholders with the notice of the
Annual General Meeting. Further copies may be obtained by contacting the Company Secretary at the
registered office.
The directors of Eden Research plc are responsible for the contents of this announcement.
Enquiries:
Eden Research plc 01993 862761
Clive Newitt, Managing Director
St Helens Capital Partners LLP 020 7368 6959
Mark Anwyl or Duncan Vasey
Eden Research plc
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