Interim Results

RNS Number : 8754B

Tissue Regenix Group PLC

12 October 2015

 



Tissue Regenix Group plc

("Tissue Regenix" or "the Group")

Unaudited Interim Results for the six months ended 31 July 2015

YORK, 12^th October 2015 - Tissue Regenix Group (AIM:TRX) "Tissue Regenix" or "The Group", the regenerative medical devices company, today announces its unaudited interim results for the six months ended 31 July 2015.

Operational Highlights

During the period, the Group has achieved the following important milestones:

·      Wound Care

o  Continued commercial success of DermaPure® within the USA after the approval of a 'Q' code for Medicare and Medicaid reimbursement in January 2015

o  With a growing distributor network, DermaPure® is now available under Medicare in 31 states, reaching c.65% of the 37 million Medicare beneficiaries

o  Two stocking distributor agreements signed in H1 2015, worth a minimum of $0.8m in the coming year

o  Established US direct salesforce working alongside growing distributor network

·      Orthopaedics

o  First patients enrolled into the EU OrthoPure™ XM Meniscus trial, with first analysis of results expected in H1 2016

o  Recruitment for the OrthoPure™ XT ACL trial due to start towards the end of 2015

o  On track for expected release of the OrthoPure™ Human Meniscus (HM) and Human Tendon (HT) products within the USA towards the end of H2 2016

·      Operations

o  Successful move to the new EU manufacturing site in Swillington, Leeds

o  Expansion of the corporate offices in both the UK and USA

·      Cardiac 

o  Commercial deployment in EU close to realisation

o  Encouraging results returned from our Aortic and Pulmonary 10 year follow up study, including data from 258 patients

Financial Highlights

·      As expected, increased operating loss of £4.1m (H1 2014: £3.8m) as the Group continues to invest in infrastructure and  new product development

·      Cash balances strengthened to £24.9m (H1 2014 £14.6m) after equity fundraising of £19m (net of expenses) in February 2015

Antony Odell, CEO of Tissue Regenix Group plc commented: "Tissue Regenix has made significant commercial progress throughout the last six months, achieving corporate milestones either ahead of, or on target. The successful implementation of our hybrid commercialisation strategy throughout the USA has meant that we are exceeding our expectations for the roll out of DermaPure®; and the ongoing clinical trial for the dCELL® meniscus product within the EU will allow us to gain a CE mark and expand our portfolio of products throughout 2016.

We continue to look at ways in which we can expand the application of our patented dCELL® technology and are committed to reinvestment into product research, development and design, whilst the move of our key EU operations to the new manufacturing site at Swillington shows our confidence in the further commercial success of the Group and its products. 

With the important investments that we have made in establishing our new manufacturing facilities and corporate offices, Tissue Regenix now has the infrastructure and capacity to capitalise on the exciting commercial opportunities ahead."

A capital markets update presentation for analysts and investors will be held today, Monday 12^th October, between 10am and 1pm at the London Stock Exchange, Paternoster Square, EC4M 7LS.  The presentation will contain no new material information. If you would like to attend, please contact Tulchan Communications on [e-mail]. 

For further information, please contact:

Tissue Regenix Group plc:                                                                  [phone]

Caitlin Pearson

Jefferies International Ltd.                                                                [phone]

Simon Hardy

Harry Nicholas

Tulchan Communications                                                                 [phone]

James Macey White

Victoria Huxster

Matt Low

About Tissue Regenix

Tissue Regenix is a leading medical devices company in the field of regenerative medicine. The company's patented decellularisation ('dCELL®') technology removes DNA and other cellular material from animal and human tissue leaving an acellular tissue scaffold which is not rejected by the patient's body which can then be used to repair diseased or worn out body parts. The potential applications of this process are diverse and address many critical clinical needs such as vascular disease, heart valve replacement and knee repair.

Tissue Regenix was formed in 2006 when it was spun-out from the University of Leeds. The company commercialises academic research conducted by our partners around the World.

In November 2012 Tissue Regenix Group plc set up a subsidiary company in the United States - 'Tissue Regenix Wound Care Inc.', as part of its commercialisation strategy for its dCELL® technology platform.

Chairman's Statement

Overview

The six months since our last statement have continued to see exciting developments for the Tissue Regenix group, as we consolidate our early commercial success with DermaPure®, while simultaneously maintaining and expanding our research base, and actively seeking new clinical and commercial outlets for our products.

Crucial to this has been the positive feedback of DermaPure® in the US, and its now widespread approval by Federal agencies, having capitalised on gaining the 'Q' code for Medicare reimbursement for outpatients which has been in place since January 1^st 2015.

In addition to this, progress has been made in research and clinical activities. The coming year will bring us closer to commercialising our orthopaedic business firstly in the EU, with the meniscus trial underway and the tendon trial expected to start in H2, whilst we also continue to achieve encouraging clinical results for our cardiac project in Brazil.

Woundcare

DermaPure® continued to gain momentum within the US during the first half of 2015. Having gained the 'Q' code for Medicare and Medicaid reimbursement in January 2015 for use in outpatient settings, DermaPure® has now been passed in 9 of the 11 regional Medicare Administrative Contractor jurisdictions, meaning that by the end of July 2015 DermaPure® was available in 31 States covering approximately 65% of all Medicare beneficiaries. 

The marketing and sales strategy has developed to mirror these advances and we have successfully implemented and utilised our hybrid sales strategy. Deploying a sales force faster than initially anticipated, with a further 3 direct sales representatives employed within the last 6 months,  we also continue to grow a network of stocking distributors with two agreements signed in H1 2015 worth a minimum of $0.8m in the coming year, highlighting the success of the DermaPure® launch.

We continue to look for opportunities for product extensions of DermaPure® that we can commercially exploit and expect to have a number of these in place over the coming year. 

Orthopaedics

The OrthoPure™ XM trial began on schedule in April and we are now starting to receive positive results from the first patients in the trial. We anticipate a comprehensive analysis of results early next year and remain on track to complete this trial and receive our CE mark during 2016, as planned.

Recruitment for the OrthoPure™ XT trial is due to start in the latter part of 2015 and we expect initial results within the first half of 2016.  We also expect that we will be able to launch the human tissue orthopaedic products within the US towards the end of 2016.

Operations

The move to our new manufacturing site at Swillington was completed on time in April.  Now with the capability to manufacture our porcine products in-house, the testing has proceeded to plan as we await CE approval to begin production of the Meniscus and ACL products from here.   

Financial Review

Revenue for the half-year was £0.3m (H1 2014: nil) following the successful launch of DermaPure® in the US.  Revenue growth continues to accelerate as we deploy more direct sales representatives and expand our distributor network.

As previously indicated the Group expects costs to increase as it continues to invest in infrastructure and new product development.  The increased operating loss over the half-year of £4.1m (H1 2014: £3.8m) is a reflection of this and is in line with our expectations.

Cash balances strengthened to £24.9m (H1 2014: £14.6m) as a result of a cash injection of £19m (net of expenses) via a share placing which completed in February 2015.  The Group remains debt free.

Outlook 

The continued commercial success of DermaPure® and the positive start to the orthopaedic meniscus trial reflect an exciting time for Tissue Regenix. As we continue our strategic move to address the unmet clinical need in sports medicine (with over 1.5million people suffering meniscal injuries in the USA and EU alone, per year) we are increasingly confident that we can position ourselves amongst the global leaders in this field.  With ongoing projects to develop and exploit our patented dCELL® technology platform in order to address different clinical needs, we continue to ensure future potential growth by maintaining a strong R&D base.

As a Group we are progressing in line with our expectations and look forward with confidence as we continue to build a developmental and commercial platform based around our patented dCELL® technology, with a portfolio of products addressing a range of therapeutic applications, that will allow Tissue Regenix to establish a stronghold in the regenerative medical market.

John Samuel

Chairman

12 October 2015

CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (UNAUDITED)

FOR THE SIX MONTHS TO 31 JULY 2015

	Notes	6 months to 31 July 2015 £'000	6 months to 31 July 2014 £'000	12 months to 31 Jan 2015 £'000
Revenue		252	8	100
Administrative expenses		(4,385)	(3,835)	(8,469)
Operating loss		(4,133)	(3,827)	(8,369)
Finance income		116	97	168
Loss before tax		(4,017)	(3,730)	(8,201)
Taxation	3	335	300	620
Loss after tax attributable to equity holders of the parent		(3,682)	(3,430)	(7,581)
Other Comprehensive Income:
Foreign currency translation differences - foreign operations		4	-	(4)
TOTAL COMPREHENSIVE EXPENSE FOR THE YEAR		(3,678)	(3,430)	(7,585)
Loss per share
Basic and diluted on loss from continuing operations	4	(0.50)p	(0.54)p	(1.19)p

The loss for the period arises from the Group's continuing operations.

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (UNAUDITED)

FOR THE SIX MONTHS TO 31 JULY 2015

	Share Capital £'000	Share Premium £'000	Merger Reserve £'000	Reverse Acquisition Reserve £'000	Reserve for own shares £'000	Share Based Payment Reserve £'000	Retained earnings deficit £'000	Total Equity £'000
At 31 Jan 2014	3,267	31,971	10,884	(7,148)	(831)	630	(19,795)	18,978
Loss and total comprehensive expense for the period	-	-	-	-	-	-	(3,430)	(3,430)
Exercise of share options	4	1	-	-	-	-	-	5
Share based payment	-	-	-	-	-	90	-	90
At 31 July 2014	3,271	31,972	10,884	(7,148)	(831)	720	(23,225)	15,643
Loss for the period	-	-	-	-	-	-	(4,151)	(4,151)
Other comprehensive income	-	-	-	-	-	-	(4)	(4)
Loss and total comprehensive expense for the period	-	-	-	-	-	-	(4,155)	(4,155)
Exercise of share options	-	-	-	-	-	-	-	-
Share based payment	-	-	-	-	-	90	-	90
At 31 Jan 2015	3,271	31,972	10,884	(7,148)	(831)	810	(27,380)	11,578
Loss and total comprehensive expense for the period	-	-	-	-	-	-	(3,682)	(3,682)
Other comprehensive income	-	-	-	-	-	-	4	4
Exercise of share options	1	23	-	-	-	-	-	24
Issue of shares	526	18,422	-	-	-	-	-	18,948
Share based payment	-	-	-	-	-	90	-	90
At 31 July 2015	3,798	50,417	10,884	(7,148)	(831)	900	(31,058)	26,962

CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION (UNAUDITED)

AS AT 31 JULY 2015

	Notes	31 July 2015 £'000	31 July 2014 £'000	31 Jan 2015 £'000
Non-current assets
Property, plant and equipment		878	440	435
Total non-current assets		878	440	435
Current assets
Inventory		17	9	34
Trade and other receivables		1,801	1,318	1,947
Cash and cash equivalent		24,887	14,578	10,257
Total current assets		26,705	15,905	12,238
Total assets		27,583	16,345	12,673
Current liabilities
Trade and other payables		(621)	(702)	(1,095)
Total liabilities		(621)	(702)	(1,095)
Net assets		26,962	15,643	11,578
Equity
Share capital	5	3,798	3,271	3,271
Share premium	5	50,417	31,972	31,972
Merger Reserve	5	10,884	10,884	10,884
Reverse acquisition reserve	5	(7,148)	(7,148)	(7,148)
Reserve for own shares		(831)	(831)	(831)
Share based payment reserve		900	720	810
Retained earnings deficit	6	(31,058)	(23,225)	(27,380)
Total equity		26,962	15,643	11,578

Approved by the Board and authorised for issue on 12 October 2015

John Samuel (Chairman)                    Ian Jefferson (Chief Financial Officer)

CONDENSED CONSOLIDATED CASH FLOW STATEMENT (UNAUDITED)

FOR THE SIX MONTHS ENDED 31 JULY 2015

	Notes	6 months to 31 July 2015 £'000	6 months to 31 July 2014 £'000	12 months to 31 Jan 2015 £'000
Operating Activities Operating loss		(4,133)	(3,827)	(8,369)
Adjustment for non-cash items:
Depreciation of property, plant & equipment		118	76	151
Share based payment		90	90	180
Tax refunded		745	-	-
Operating cash outflow		(3,180)	(3,661)	(8,038)
Decrease/(increase) in inventory		17	(9)	(34)
(Decrease)/increase in trade & other receivables		(264)	109	(200)
Decrease in trade & other payables		(470)	(402)	(13)
Net cash outflow from operations		(3,897)	(3,963)	(8,285)
Investing activities
Interest received		116	97	168
Purchase of property, plant & equipment		(561)	(44)	(114)
Net cash outflow from investing activities		(445)	53	54
Financing activities
Proceeds from issue of share capital		18,972	5	5
Net cash inflow from financing activities		18,972	5	5
Increase/(decrease) in cash and cash equivalents		14,630	(3,905)	(8,226)
Cash and cash equivalents at start of period		10,257	18,483	18,483
Cash and cash equivalents at end of period		24,887	14,578	10,257

NOTES TO THE CONDENSED FINANCIAL STATEMENTS (UNAUDITED)

FOR THE SIX MONTHS ENDED 31 JULY 2015

1.     Basis of preparation

The interim financial information set out in this statement for the six months ended 31 July 2015 and the comparative figures for the six months ended 31 July 2014 are unaudited.  This information does not constitute statutory accounts as defined in Section 435 of the Companies Act 2006.

The comparative figures for the financial year ended 31 January 2015 are not the Company's statutory accounts for that financial year.  Those accounts have been reported on by the Company's auditors and delivered to the Registrar of Companies.  The report of the auditor was (i) unqualified, (ii) did not include a reference to any matters to which the auditor drew attention by way of emphasis without qualifying their report, and (iii) did not contain a statement under section 498 (2) or (3) of the Companies Act 2006.

This interim statement, which is neither audited nor reviewed, has been prepared in accordance with the measurement and recognition criteria of EU adopted IFRSs.  It does not include all the information required for the full annual financial statements, and should be read in conjunction with the financial statements of the Group as at and for the year ended 31 January 2015.  It does not comply with IAS 34 "Interim Financial Reporting" as is permissible under the rules of the AIM Market ("AIM").

The financial information has been prepared on a going concern basis and is presented in Sterling to the nearest £'000.

The preparation of financial information in conformity with IFRS requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Although these estimates are based on management's best knowledge of the amount, event or actions, actual events ultimately may differ from those estimates.

The interim financial information does not include all financial risk management information and disclosures required in annual financial statements. There have been no significant changes in any risk or risk management policies since 31 January 2015. The principal risks and uncertainties are largely unchanged and are as disclosed in the Annual Report for the year ended 31 January 2015.

The accounting policies applied in preparing these interim financial statements are the same as those applied in the preparation of the annual financial statements for the year ended 31 January 2015, as described in those financial statements other than standards, amendments and interpretations which became effective after 1 February 2015 and were adopted by the Group.  These have had no significant impact on the Group's result for the period or equity.  The Board approved these interim financial statements on 24 September 2015.

2.     Significant accounting policies

The condensed consolidated financial statements have been prepared under the historical cost convention in accordance with International Financial Reporting Standards as adopted by the European Union.

The accounting policies adopted are consistent with those followed in the preparation of the audited financial statements of Tissue Regenix Group Plc for the year ended 31 January 2015 and are disclosed in those statements.

NOTES TO THE CONDENSED FINANCIAL STATEMENTS (UNAUDITED) continued

FOR THE SIX MONTHS ENDED 31 JULY 2015

3.     Taxation

		6 months to 31 July 2015 £'000	6 months to 31 July 2014 £'000	12 months to 31 Jan 2015 £'000
Current Tax:
Tax credit on research and development costs in the period		335	300	620
		335	300	620
Deferred tax:
Origination and reversal of temporary timing differences		-	-	-
Tax credit on loss on ordinary activities		335	300	620

The Group has accumulated losses available to carry forward against future trading profits.  No deferred tax asset has been recognised in respect of tax losses.

4.     Loss per share (basic and diluted)

Basic loss per share is calculated by dividing the loss attributable to equity holders of the parent by the weighted average number of ordinary shares in issue during the period excluding own shares held jointly by the Tissue Regenix Employee Share Trust and certain employees.  Diluted loss per share is calculated by adjusting the weighted average number of ordinary shares in issue during the period to assume conversion of all dilutive potential ordinary shares.

		6 months to 31 July 2015 £'000	6 months to 31 July 2014 £'000	12 months to 31 Jan 2015 £'000
Total loss attributable to the equity holders of the parent		(3,682)	(3,430)	(7,581)
		No.	No.	No.
Weighted average number of ordinary shares in issue during the period		737,434,237	636,592,627	636,890,061
Loss per share
Basic and diluted on loss for the period		(0.50)p	(0.54)p	(1.19)p

The Company has issued employees options over 23,786,780 ordinary shares and there are 16,940,386 jointly owned shares which are potentially dilutive.  There is, however, no dilutive effect of these issued options as there is a loss for each of the periods concerned.

NOTES TO THE CONDENSED FINANCIAL STATEMENTS (UNAUDITED) continued

FOR THE SIX MONTHS ENDED 31 JULY 2015

5.     Share capital

	Number	Share Capital £'000	Share Premium £'000	Merger Reserve £'000	Reverse acquisition reserve £'000	Total £'000
Total Ordinary shares of 0.5p each as at 31 January 2014	653,487,357	3,267	31,971	10,884	(7,148)	38,974
Issued on exercise of share options	635,674	4	1	-	-	5
Total Ordinary shares of 0.5p each as at 31 July 2014	654,123,031	3,271	31,972	10,884	(7,148)	38,979
Issued on exercise of share options	-	-	-	-	-	-
Total Ordinary shares of 0.5p each as at 31 January 2015	654,123,031	3,271	31,972	10,884	(7,148)	38,979
Issued for cash	105,263,158	526	18,422	-	-	18,948
Issued on exercise of share options	266,904	1	23	-	-	24
Total Ordinary shares of 0.5p each as at 31 July 2015	759,653,093	3,798	50,417	10,884	(7,148)	57,951

6.     Movement in retained earnings and reserve for own shares

			Retained Earnings Deficit £'000	Reserve For Own Shares £'000
At 31 January 2014			(19,795)	(831)
Loss for the period			(3,430)	-
At 31 July 2014			(23,225)	(831)
Loss for the period			(4,151)	-
Exchange movement			(4)	-
At 31 January 2015			(27,380)	(831)
Loss for the period			(3,682)	-
Exchange movement			4	-
At 31 July 2015			(31,058)	(831)

7.     Interim financial report

A copy of this interim report will be distributed to shareholders and is also available on the Company's website at www.tissueregenix.com

 

END

 

 

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