TIDMAGI
RNS Number : 7451N
AGI Therapeutics plc
07 September 2011
AGI Therapeutics
Interim financial results for the six months ended 30 June
2011
Dublin, Ireland, 7 September 2011 - AGI Therapeutics plc ("AGI"
or "the Company") (AIM, ESM: AGI), a speciality pharmaceutical
development company, today announces interim financial results for
the six months ended 30 June 2011.
Financial summary
-- Cash and short-term deposits at 30 June 2011 of $9.3 million
(31 December 2010: $10.0 million)
-- R&D spend $0.7 million (2010: $0.9 million)
-- G&A spend $0.5 million (2010: $0.6 million)
-- Loss per ordinary share $0.015 (2010: $0.046)
Operational summary
-- During the first six months of 2011 AGI began implementing
its new strategy announced in late 2010. The Company has re-focused
its research and development efforts in the area of specialty
indications with unmet medical needs, with particular focus on
treatments which qualify for Orphan drug status.
-- The first six months of 2011 were dominated by the
pre-clinical evaluation of AGI-350,, a novel presentation of an
existing marketed drug which AGI is developing to treat a
significant unmet medical need in the critical care setting.
-- AGI has completed preliminary development and in-vitro
evaluation of a form and formulation of AGI-350 which is
specifically designed to provide effective and efficient delivery
of the drug to the lung.
-- AGI entered into a technology access agreement with Aerogen
Ltd. to provide specialized aerosol technology for the
administration and delivery of AGI-350 to ventilated patients in
the Intensive Care Unit (ICU) setting. This proprietary technology
is being customized for use with AGI-350 in the target patient
population and prototypes have been developed for pre-clinical
evaluation.
-- Furthermore, AGI has initiated a pre-clinical programme for
AGI-350 which is ongoing. A model of the target condition has been
developed and is being employed to characterise AGI-350 and
generate key proof of concept data to inform subsequent clinical
development. Once this phase of evaluation is completed in H2 2011,
AGI will consider the next steps for this programme, which may
involve advancing the product into human trials.
-- AGI continues to explore other opportunities to develop
products for use in the critical care setting. Management believes
this is an area that is under-served by currently available
products.
-- During the first six months AGI continued to exercise
vigilance over the use of its existing cash resources. Total cash
absorbed by operations was $0.9 million in the first six months of
2011, a decrease of 18% over the same period in 2010. In addition,
since 30 June, AGI reported the sale of certain intellectual
property assets, no longer regarded as core, to Warner Chilcott for
$300,000. This will result in a gain on disposal of intellectual
property of approximately $54,000, which will be recognised in the
second half of the year.
Commenting on the announcement today, John Devane, CEO of AGI
stated; "The first six months of 2011 saw AGI take its first steps
to rebuilding the product pipeline and steering the Company towards
being a specialist development company with an emphasis on Orphan
needs and critical care applications. We are encouraged with our
progress to date."
- Ends -
Contact Information:
AGI Therapeutics plc. Tel: +353 1 449 3254
David Kelly, Chief Financial
Officer
Davy Tel: +353 1 614 8761
John Frain
About AGI Therapeutics plc
AGI is a specialty pharmaceutical company which is focused on
the development and commercialisation of differentiated drug
products to treat unmet medical needs, including treatments for
conditions which qualify for Orphan Drug status.
The Company's lead programme, AGI-350, is being developed to
treat a significant unmet medical need in the critical care
setting, in particular for patients who require ventilation
support.
AGI's common shares are listed on the Alternative Investment
Market of the London Stock Exchange (AIM) and on the Enterprise
Securities Market (ESM) of the Irish Stock Exchange as AGI.
For further information please see www.agitherapeutics.com.
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.
Financial review
For the six months ended 30 June 2011
Basis of preparation and International Financial Reporting
Standards (IFRS)
The financial information for the six months ended 30 June 2011
has been prepared in accordance with IAS 34 "Interim Financial
Statements" (IAS 34) as adopted by the European Union.
Operating performance
Revenue
AGI did not record any revenue in the six months ended 30 June
2011. For the six months to 30 June 2010 AGI recognised $67,200
relating to license fees for access to certain intellectual
property.
Research and development expenses
Total Research and Development (R&D) expenses for the six
months to 30 June 2011, were $0.7 million (2010: $0.9 million).
R&D costs in this period arose primarily on the pre-clinical
investigation of AGI-350.
General and administrative expenses
General and Administrative (G&A) expenses in the first six
months of 2011 were $0.5 million (2010: $0.6 million). This
decrease is attributable to continued efforts by AGI to reduce its
cost base.
Interest income and other income / (expense)
The Company earned interest on its cash balances amounting to
$12,000 in the first six months of 2011 (2010: $33,000). Interest
income has fallen as cash balances have reduced and interest rates
for cash deposits declined in 2011 compared to 2010. Other
income/(expense) relates to an unrealised gain of $176,000 in 2011
(2010: $546,000 loss) arising from the translation of certain cash
balances, which AGI still holds in euro, into dollars at the period
end.
Intangible asset impairment charge
A charge of $1.1 million was recognised in the first half of
2010 primarily relating to the write off of intellectual property
associated with Rezular. No impairment charge arose in the same
period in 2011.
Taxation
The Company has incurred losses to date and continues to incur
losses. Because of these losses no charge for tax arose in the
first six months of 2011 or 2010.
Share based compensation expense
The Company accounts for the fair value of option grants as a
charge in the income statement, using the Black-Scholes
option-pricing model. A charge of $0.2 million was expensed during
the first half of 2011 (2010: $0.3 million) in respect of share
based compensation expense, split between R&D and G&A
expenses.
Operating cash flow
Net cash outflow from operating activities in the six-month
period ended 30 June 2011, was $0.9 million (2010: $1.1 million),
which consisted principally of the loss from operations and changes
in working capital balances. At 30 June 2011, AGI had cash and
short-term deposits of $9.3 million, (31 December 2010: $9.9
million). The Directors have considered the Company's cash position
and are satisfied that it is sufficient to meet the Company's
financial obligations for at least the coming twelve months.
Post balance sheet events
On 27 July 2011, the Company completed the divestment of a
portfolio of patents to Warner Chilcott for consideration of
approximately $0.3 million. This will result in a gain on disposal
of intellectual property of approximately $54,000, which will be
recognised in the second half of the year.
UNAUDITED CONDENSED CONSOLIDATED INTERIM INCOME STATEMENT
For the six months ended 30 June 2011
Period Period
ended ended
30 June 30 June
2011 2010
Notes $'000 $'000
================================ ====== ========= =========
Revenue - continuing
operations - 67
Operating expenses
Research and development
expenses
(share based payment
charge of $108,000
(2010: $148,000)) 687 891
General and administrative
expenses
(share based payment
charge of $98,000
(2010: $131,000)) 523 618
Impairment and other
restructuring charges 4 - 1,129
-------------------------------- ------ --------- ---------
Total operating expenses (1,210) (2,638)
-------------------------------- ------ --------- ---------
Loss from operating
activities - continuing
operations (1,210) (2,571)
Finance income and
expense
Interest income 12 33
Other income/(expense) 176 (546)
-------------------------------- ------ --------- ---------
Net finance income/(expense) 188 (513)
Loss before income
tax (1,022) (3,084)
================================ ====== ========= =========
Income tax - -
================================ ====== ========= =========
Net loss for the period
- all attributable
to equity holders
of the company (1,022) (3,084)
Basic and diluted
loss per ordinary
share:
-------------------------------- ------ --------- ---------
Basic and diluted
loss per share (US$
cents) 5 (1.5) (4.6)
The accompanying notes are an integral part of these interim
financial statements
UNAUDITED CONDENSED CONSOLIDATED INTERIM STATEMENT OF
COMPREHENSIVE INCOME
For the six months ended 30 June 2011
Period Period
ended ended
30 June 30 June
2011 2010
$'000 $'000
=========================== ========= =========
Net loss for the period (1,022) (3,084)
=========================== ========= =========
Total comprehensive
loss for the period
- all attributable
to equity holders
of the company (1,022) (3,084)
The accompanying notes are an integral part of these interim
financial statements
UNAUDITED CONDENSED CONSOLIDATED INTERIM BALANCE SHEET
As at 30 June 2011
30 June 31 December
2011 2010
Notes $'000 $'000
----------------------------- ------ --------- ------------
Non-current assets
Intangible assets 4 241 271
Total non-current assets 241 271
----------------------------- ------ --------- ------------
Current assets
Other current assets 32 38
Cash and cash equivalents 9,251 9,965
Total current assets 9,283 10,003
----------------------------- ------ --------- ------------
Total assets 9,524 10,274
----------------------------- ------ --------- ------------
Shareholders' equity
Share capital 992 992
Share premium 75,194 75,194
Share-based compensation
reserve 5,720 5,514
Retained deficit (72,690) (71,668)
----------------------------- ------ --------- ------------
Total shareholders'
equity 9,216 10,032
----------------------------- ------ --------- ------------
Current liabilities
Trade and other payables 308 242
Total current liabilities 308 242
----------------------------- ------ --------- ------------
Total liabilities 308 242
Total shareholders'
equity and liabilities 9,524 10,274
----------------------------- ------ --------- ------------
The accompanying notes are an integral part of these interim
financial statements
UNAUDITED CONDENSED CONSOLIDATED INTERIM STATEMENT OF CASH
FLOWS
For the six months ended 30
June 2011
Period Period
ended ended
30 June 30 June
2011 2010
$'000 $'000
---------------------------------- --------- ---------
Loss for the period (1,022) (3,084)
Adjustments to reconcile loss
to net cash used in operating
activities:
Depreciation of property,
plant and equipment - 1
Amortisation and write off
of intangible assets 30 1,246
Interest income (12) (33)
Foreign currency (gain)/loss (176) 546
Share-based payment expense 206 280
Operating cash outflow before
changes in working capital (974) (1,044)
Increase in other current
assets (6) (7)
Increase/(decrease) in trade
and other payables 66 (44)
Cash absorbed by operations (914) (1,095)
Interest received 24 44
Net cash outflow from operating
activities (890) (1,051)
---------------------------------- --------- ---------
Cash and cash equivalents
at the beginning of period 9,965 11,972
Effect of foreign exchange
rate changes 176 (546)
---------------------------------- --------- ---------
Cash and cash equivalents
at the end of the period 9,251 10375
---------------------------------- --------- ---------
The accompanying notes are an integral part of these interim
financial statements
UNAUDITED CONDENSED CONSOLIDATED INTERIM STATEMENT OF CHANGES IN
SHAREHOLDERS' EQUITY
For the six months ended 30 June 2011
Ordinary Share Based
Share Share Compensation Retained Total
Number Capital Premium Reserve Deficit Amount
of Shares $'000 $'000 $'000 $'000 $'000
Balance at 31
December
2009 67,412,783 992 75,194 4,994 (68,066) 13,114
Comprehensive
income: Loss
for the
period - - - - (3,084) (3,084)
=========== ========= ======== ============= ========= ========
Total
comprehensive
loss (3,084)
Transactions
with owners
recognised
directly in
equity:
Share-based
compensation - - - 279 - 279
--------------- ----------- --------- -------- ------------- --------- --------
Balance at 30
June 2010 67,412,783 992 75,194 5,273 (71,150) 10,309
Comprehensive
income: Loss
for the
period - - - - (518) (518)
=========== ========= ======== ============= ========= ========
Total
comprehensive
loss (518)
Transactions
with owners
recognised
directly in
equity:
Share-based
compensation - - - 241 - 241
--------------- ----------- --------- -------- ------------- --------- --------
Balance at 31
December
2010 67,412,783 992 75,194 5,514 (71,668) 10,032
Comprehensive
income: Loss
for the
period - - - - (1,022) (1,022)
=========== ========= ======== ============= ========= ========
Total
comprehensive
loss (1,022)
Transactions
with owners
recognised
directly in
equity:
--------------- ----------- --------- -------- ------------- --------- --------
Share-based
compensation - - - 206 - 206
--------------- ----------- --------- -------- ------------- --------- --------
Balance at 30
June 2011 67,412,783 992 75,194 5,720 (72,690) 9,216
--------------- ----------- --------- -------- ------------- --------- --------
The accompanying notes are an integral part of these interim
financial statements
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL
STATEMENTS
For the six months ended 30 June 2011
1 BASIS OF PREPARATION
These unaudited condensed consolidated interim financial
statements (the interim financial statements) have been prepared in
accordance with IAS 34, "Interim Financial Reporting" (IAS 34) as
adopted by the European Union (EU). The interim financial
statements do not include all of the information required for full
annual financial statements.
These interim financial statements are presented in US dollars
rounded to the nearest thousand, being the functional currency of
the parent company and the group companies. They are prepared on
the historical cost basis, except for share based payments, which
are stated at fair value.
The preparation of interim financial statements requires
management to make judgements, estimates and assumptions that
affect the application of policies and reported amounts of assets
and liabilities, income and expenses. Actual results could differ
materially from these estimates. In preparing these interim
financial statements, the significant judgements made by management
in applying our accounting policies and the key sources of
estimation uncertainty were the same as those that applied to the
consolidated financial statements as at and for the year ended 31
December 2010.
The comparative amounts included for the year ended 31 December
2010 do not constitute statutory financial statements of the
Company within the meaning of Regulation 40 of the European
Communities (Companies: Group Accounts) Regulations, 1992.
Statutory financial statements for the year ended 31 December 2010
have been filed with the Companies Office. The auditor's report on
those financial statements was unqualified and did not contain an
emphasis of matter paragraph.
2 SIGNIFICANT ACCOUNTING POLICIES
The accounting policies applied in these interim financial
statements are the same as those applied in the consolidated
financial statements as at and for the year ended 31 December 2010,
as set out on pages 29 to 33 of the 2010 Annual Report, except for
the impact of the standards described below.
The following new interpretations and amendments to standards
are mandatory for the first time for the financial year beginning 1
January 2011.
-- IFRIC 19: Extinguishing Financial Liabilities with Equity
Instruments.
-- Revised IAS 24: Related Party Disclosures.
-- Amendment to IFRIC 14: Prepayments of a Minimum Funding
Requirement.
-- Amendment to IAS 32: Financial Instruments: Presentation:
Classification of Rights Issues.
-- The IASB's third annual improvement project, Improvements to
IFRS (issued 2010).
The adoption of these amendments to standards and
interpretations did not impact on the Company's financial position
or results from operations.
3 OPERATING SEGMENTS
The Group is managed as a single business unit engaged in the
development of pharmaceutical products. Accordingly, the Group
operates in one reportable segment. Dr. John Devane has been
identified as the Chief Operating Decision Maker. There were no
changes in the basis of segment reporting during the interim period
ended 30 June 2011.
4 IMPAIRMENT AND OTHER RESTRUCTURING CHARGES
There were no impairment or restructuring charges in the first
six months of 2011. A charge of $1.1 million was recognised in the
first half of 2010 (2009: $0.4 million), primarily relating to the
write off of intellectual property associated with Rezular. In 2010
AGI wrote off the carrying value of its intangible assets
associated with Rezular and other programmes, which resulted in a
non-cash impairment charge of $1.1 million in the six-month period
to 30 June 2010. The remaining intangible assets, associated with
ongoing early stage development programmes, amounted to $0.2
million at 30 June 2011.
30 June 30 June
2011 2010
$000 $000
================================ ======= =======
Impairment of intangible assets - 1,129
Total impairment charges - 1,129
5 LOSS PER SHARE
Basic loss per share is computed by dividing the loss for the
period available to ordinary shareholders by the weighted average
number of ordinary shares outstanding during the period. Diluted
loss per share is computed by dividing the loss for the period, by
the weighted average number of ordinary shares outstanding and,
when dilutive, adjusted for the effect of all potentially dilutive
shares, including stock options, warrants, and convertible debt
securities on an as-if-converted basis.
The following table sets forth the computation for basic and
diluted loss per share for the six months ended 30 June 2011 and
2010:
30 June
30 June 2011 2010
$000 $000
=========================================== ============ ==========
Numerator:
Loss attributable to ordinary shareholders (1,022) (3,084)
Denominator:
=========================================== ============ ==========
Denominator for basic-weighted
average number of shares 67,412,783 67,412,783
Basic and diluted loss per share:
Basic and diluted loss per share
(US$ cents) (1.5) (4.6)
------------------------------------------- ------------ ----------
Potentially dilutive instruments, such as share options have not
been treated as dilutive as the Company made a loss in both
periods.
6 RELATED PARTY TRANSACTIONS
Transactions with founding members and shareholders
Frank Kenny, John O'Sullivan and Peter Sandys are Directors of
the Company and are board nominees of Delta Partners, ACT Venture
Capital and Seroba Bioventures respectively. Fees of $11,000
annually are paid by the Company to each of Delta, ACT and Seroba
in respect of their nominees' appointments.
7 SUBSEQUENT EVENTS
On 27 July 2011, the Company completed the divestment of a
portfolio of patents to Warner Chilcott for consideration of
approximately $0.3 million. This will result in a gain on disposal
of intellectual property of approximately $54,000, which will be
recognised in the second half of the year.
8 APPROVAL
The unaudited condensed consolidated interim financial
statements were approved by the directors on 6 September 2011.
Directors' Responsibility Statement
For the six months ended 30 June 2011
Statement of the directors in respect of the interim financial
report:
Each of the directors, whose names and functions are listed on
page 12 of our 2010 Annual Report, confirms that, to the best of
our knowledge and belief:
a) the unaudited condensed consolidated interim
financial statements, comprising the condensed
consolidated interim income statement, the
condensed consolidated interim statement of
comprehensive income, the condensed consolidated
interim balance sheet, the condensed consolidated
interim statement of cash flows, the condensed
consolidated interim statement of changes
in shareholders' equity and the related notes
thereto, have been prepared in accordance
with IAS 34 - Interim Financial Reporting
("IAS 34"), as adopted by the EU.
b) the interim management report includes a fair
review of the following information:
(i) an indication of
important events that
have occurred during
the six months ended
30 June 2011 and their
impact on the
condensed consolidated
interim financial
statements; and a
description of the
principal risks and
uncertainties for the
remaining six months
of the year; and
(ii) related party
transactions that have
taken place in the six
months ended 30 June
2011 and that have
materially affected
the financial position
or performance of the
entity during that
period; and any
changes in the related
party transactions
described in the 2010
Annual Report that
could do so.
On behalf of the Board
Dr. John Devane David Kelly
Director Director 6 September
2011
Independent Auditor's Review Report to AGI Therapeutics, plc
Introduction
We have been engaged by AGI Therapeutics, plc (the "company") to
review the condensed consolidated interim financial statements for
the six months ended 30 June 2011, which comprise the condensed
consolidated interim income statement, the condensed consolidated
interim statement of comprehensive income, the condensed
consolidated interim balance sheet, the condensed consolidated
interim statement of cash flows, the condensed consolidated interim
statement of changes in shareholders' equity and the related notes
thereto. 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 consolidated interim financial
statements.
This report is made solely to the company in accordance with the
terms of our engagement. Our review has been undertaken so that we
might state to the company those matters we are required to state
to it in this 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 reached.
Directors' responsibilities
The half-yearly financial report, including the condensed
consolidated interim financial statements contained therein, 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 ESM Rules for Companies as issued by
the Irish Stock Exchange and the AIM Rules for Companies as issued
by the London Stock Exchange.
As disclosed in note 1 - basis of preparation, the annual
consolidated financial statements of the company are prepared in
accordance with International Financial Reporting Standards
("IFRSs") as adopted by the European Union ("EU"). The directors
are responsible for ensuring that the condensed consolidated
interim financial statements included in this half-yearly financial
report have been prepared in accordance with IAS 34 - Interim
Financial Reporting, ("IAS 34"), as adopted by the EU.
Our responsibility
Our responsibility is to express to the company a conclusion on
the condensed consolidated interim 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
Ireland and the UK. A review of interim financial information
consists of making enquiries, 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 not 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 condensed consolidated interim
financial statements in the half-yearly financial report for the
six months ended 30 June 2011 are not prepared, in all material
respects, in accordance with IAS 34 as adopted by the EU and the
ESM Rules for Companies as issued by the Irish Stock Exchange and
the AIM Rules for Companies as issued by the London Stock
Exchange.
Sean O'Keefe
For and on behalf of,
KPMG
Chartered Accountants, Statutory Audit Firm
1 Stokes Place, St. Stephen's Green, Dublin 2, Ireland
6 September 2011
This information is provided by RNS
The company news service from the London Stock Exchange
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