RNS Number:8771D
Maelor PLC
01 June 2006
Maelor plc
Preliminary Results and Strategic Review
1 June 2006 - Maelor plc, the specialist critical care pharmaceuticals and
devices company, announces preliminary results for the year ended 31 March 2006.
Financial highlights
* Turnover up 13% to #1.86 million (2005: #1.64 million)
* Operating loss down 29% to #0.61 million (2005: #0.86 million)
* Loss per share of 1.93p (2005: 1.95p)
* Cash balance of #1.30 million (2005: #1.47 million)
Operational highlights
* Licensing agreement with Plethora Solutions plc announced today for
micelle nanotechnology drug delivery system for use in the treatment
of interstitial cystitis and painful bladder syndrome
* Volplex(R) UK rights re-acquired and product re-launched
successfully. In-market sales for the second half of the year up 35%
compared to the first half
* OptiFlo(TM) UK in-market sales grow by 32% over the previous year
Strategic review outcomes
* Transform Maelor into a focused specialist business in critical care
* Rationalise products and distributors to focus on high potential
profitable opportunities
* Cease active search for micelle propofol partner
* Outlicence micelle nanotechnology drug delivery system
* Put in place a management team to deliver new strategy
Commenting on the results and the recent strategic review CEO, Tim Wright said:
"Since the interim results last October, we have rigorously evaluated Maelor's
existing portfolio and competencies. As a result of this we have developed a
clear strategy for the Company which is already delivering positive results. We
are achieving sales growth from both Volplex and Optiflo and have leveraged our
micelle technology through an agreement with Plethora announced today."
For further information contact:
Maelor plc
Tim Wright, CEO
01978 810153
Financial Dynamics
Ben Atwell
John Gilbert
020 7831 3113
Chairman's Statement
I am pleased to present the results for the past financial year, a year of
significant change for Maelor as it began it's transformation into a company
with a new focus under new leadership.
The Board initiated a major transition during the second half of the year, under
the leadership of Tim Wright, the Company's new CEO. Arising from this the
Company has developed a new strategy which is focused on establishing it as a
specialist critical care business.
Overall the Company has performed satisfactorily achieving a 13% increase in
sales and 29% reduction in operating losses. The Company's cash position remains
sound and the Board is confident that it has sufficient funds with which to
achieve profitability.
The Board took the decision to reacquire rights to Volplex, our treatment for
hypovolaemia (low blood volume) and to market the drug ourselves in the UK. The
process of re-launching the product was achieved ahead of schedule and we are
already seeing the benefits of this decision in improved sales, with sales in
the market for the second half of the year up 35% compared to the first half.
The success of Optiflo, the range of urethral catheter cleansing products sold
by Bard Limited continued, with its market share increasing to 54% from 46% in
2005.
One of the major concerns of our strategic review was the future of our micelle
drug delivery technology and in particular our propofol formulation which
employs this proprietary technology
Through the strategic review we have come to more fully appreciate the potential
of the underlying micelle technology, a novel drug delivery system for drugs
with poor water solubility. The licensing agreement with Plethora, a specialist
urology company, announced today, will enable the development of a treatment for
interstitial cystitis and painful bladder syndrome, a condition which afflicts
some 2 million women in the United States and Europe.
We also concluded that we should discontinue our active search for a partner for
micelle propofol. This decision was based on the increasingly generic nature of
the market and the difficulty in finding suitable partners in this context.
This is an important time for Maelor as we build a specialist critical care
business, through establishing a commercial presence marketing the first of our
products, Volplex and seeking further partnerships.
I am confident that the management team that is now in place has the ability and
commitment to deliver the new strategy and that we have a sound base upon which
to build the Company.
Finally I would like to thank my predecessor Alastair Macpherson, who I replaced
as Chairman in January 2006 following his retirement. Alastair became Chairman
when Maelor listed on AIM in 1997 and provided outstanding service to the
Company throughout his period in office.
Geoff McMillan
Chairman
Chief Executive's Review
The second half of the financial year has been an intense time for Maelor, as we
have undertaken a thorough strategic review of the business.
The review process clearly identified that Maelor has strength and creativity in
improving existing products and formulations to fulfil unmet market needs. This
approach has delivered commercialised brands such as Volplex (blood volume
replacement), OptiFlo / Contisol (range of catheter irrigation solutions) and
patented drug delivery technology through our micellar system.
It also became clear, however, that the business was fragmented both in terms of
therapeutic and geographical focus. Furthermore, the need to build a stronger
commercial capability for both the identification and exploitation of new
opportunities was identified.
From a financial perspective, as the results show, cost control is rigorous and
we believe that our existing products, coupled with our new commercial
capabilities provide a solid platform for growth.
The conclusions of the strategic review which underpin our future strategy
relate to the following key areas:
* Transform Maelor into a focused specialist business in critical care
* Rationalise products and distributors to focus on high potential
profitable opportunities
* Cease active search for micelle propofol partner
* Outlicence micellar nanotechnology drug delivery system, achieved through
agreement with Plethora
* Put in place a management team to deliver new strategy
Transform Maelor into a focused specialist business in critical care
Critical care patients include those undergoing emergency or elective surgery
and are commonly cared for in Intensive Care Units. They require support from a
wide range of specialist drugs and devices. Primary customers are Anaesthetists
and Intensive Care Specialists and given the relatively low numbers of these
specialist physicians they are easy for a company like Maelor to access. Maelor
has the experience and the capabilities to support both devices and drugs,
together with existing relationships in critical care through the development of
our current portfolio.
Maelor has successfully brought back and re-launched Volplex, our succinylated
gelatin product currently used in operating theatres and wards to maintain blood
volume. This step marks a significant milestone for the business as it is the
first brand that has been directly commercialised by the Company. In-market
sales in the second six months of the year have increased by 35% over the first
six months, following Maelor's active promotion. To further support growth and
Maelor's presence in this sector we have accessed selling time from 12
specialist sales representatives across the UK. We have also recently appointed
a Commercial Director with over 20 years of relevant pharmaceutical industry
experience.
It is our intention to build this critical care portfolio, by identifying
complementary pharmaceuticals and devices to distribute as well as by extending
our existing product lines.
Rationalise products and distributors to focus on high potential profitable
opportunities
As part of our strategic review we have looked very closely at all products
within our portfolio and their related distribution agreements, in order to
ensure that we are operating as efficiently as possible. It is our intention to
commercialise critical care brands fully ourselves while commercialising our
non-core portfolio through effective partnerships.
Geographic focus
It is well-recognised that currently 80% of world-wide pharmaceutical sales are
derived from eight main territories: US, UK, Canada, France, Germany, Italy,
Spain and Japan. Analysis of Maelor's existing distribution agreements showed a
number of territories outside these countries where the size of opportunity is
inadequate, when weighed against the costs of ongoing regulatory support and the
potential distraction to the business at this stage of its development. These
agreements are now either being terminated or treated as a low priority.
Looking forward, China has high potential. An existing agreement has encouraged
us to actively pursue registration for Volplex. We were pleased to be advised
that Volplex has been accepted into the regulatory approval process although
regulatory timelines in China are currently difficult to predict.
Portfolio Focus
Volplex is a core asset and a pivotal part of our portfolio. Similarly OptiFlo
/ ContiSol, our range of catheter irrigating solutions remain important products
for Maelor; and we will continue to commercialise them through partnerships. In
the UK OptiFlo continues to perform well with in-market sales growth of 32% over
the previous year, reaching a 54% market share.
While catheter flushing is common practice in the UK, elsewhere in Europe this
is not the case. Given the costs of education in order to change an established
clinical practice we do not intend to pursue commercialisation elsewhere in
Europe. ContiSol has been launched in Canada where initial sales have been
disappointing, again due to the need to shift clinical practice. As the size of
the ageing US population continues to make this an attractive market, a project
has been initiated to identify the most efficient route to commercialising
ContiSol in this market
In the context of focussing our business on the high potential opportunities, we
have taken the decision to discontinue sales of oral syringes. The area of
medical supplies is a highly competitive low margin sector. We believe that
Maelor's efforts can be better directed into higher potential areas that align
with our focussed strategy. Similarly given the low prices in the urethral
lubricant market, we do not plan to progress Tendagel(R) to market.
Our poloxamer-based scientific expertise has produced some interesting early
stage development candidates which we are continuing to explore opportunities to
leverage these projects with third parties, both in the human and animal sector,
particularly in the area of wound care.
Cease active search for micelle propofol partner
A key part of our strategic review has been to evaluate the future opportunities
for this product. Our market research has shown that this market has become
increasingly competitive and price sensitive with the arrival of a number of
generic products. For some time Maelor has been seeking a partner for micelle
propofol without success due to these trends. We have therefore decided to
discontinue our active search for a partner for micelle propofol, to discontinue
our agreement with Arnolds Veterinary Products and to focus our resources on
finding a licencee for the underlying micelle technology.
Outlicence micellar nanotechnology drug delivery system
We are pleased to have announced today that we have granted Plethora Solutions,
a specialist urology company, a licence to progress development of a micellar
formulation for treatment of interstitial cystitis and painful bladder syndrome.
These conditions are estimated to afflict up to 2 million women in the United
States and Europe. Under the terms of this agreement, Plethora will be
responsible for product development and Maelor will receive an upfront payment,
milestones and royalties.
Put in place a management team to deliver new strategy
Following my appointment in October 2005,and Geoff McMillan's appointment as
Chairman in January 2006, I have appointed a new Commercial Director to lead
our sales and marketing efforts. I am also delighted today to have announced the
appointment of Nigel Goldsmith as Financial Director. Nigel will take up his
appointment from 12th June.
The last six months we have rigorously evaluated Maelor's existing portfolio and
competencies, developed a clear strategy, put a strong team in place and are
already seeing the positive results, with the sales growth of Volplex and
Optiflo and the partnering of our patented micelle technology.
The announcement of our 2005 / 2006 results has enabled us to set out a clear
vision for Maelor and to clarify a number of outstanding questions from
shareholders. We look forward to delivering the milestones that will enable us
to become established as a leading specialist critical care business.
Tim Wright
Chief Executive Officer
Maelor Plc
Consolidated Profit and Loss Account
for the year ended 31 March 2006
Year Ended Year Ended
31 March 2006 31 March 2005
# # # #
Turnover 1,858,750 1,639,294
Cost of Sales (1,117,782) (1,035,302)
___________ ____________ ____________ ____________
Gross Profit 740,968 603,992
Research and Development (89,888) (344,339)
Administration (1,259,627) (1,122,332)
(1,349,515) (1,466,671)
___________ ____________ ____________ ____________
Operating Loss (608,547) (862,679)
Interest receivable and
similar income 51,784 65,366
Interest payable (13,351) (16,931)
___________ ____________ ____________ ____________
Loss on ordinary activities
before tax (570,114) (814,244)
Taxation (payable)/recoverable (90,478) 150,484
___________ ____________ ____________ ____________
Retained loss attributable to
the Group (660,592) (663,760)
___________ ____________ ____________ ____________
Basic loss per ordinary share (1.93)p (1.95)p
Diluted loss per ordinary (1.93)p (1.95)p
share
Statement of Total Recognised Gains and Losses
for the year ended 31 March 2006
2006 2005
# #
Loss for the financial year (660,592) (663,760)
Unrealised surplus on revaluation of properties - 88,250
__________ __________
Total gains and losses recognized since last annual report (660,592) (575,510)
__________ __________
Note of Historical Cost Profits and Losses
for the year ended 31 March 2006
2006 2005
# #
Reported loss on ordinary activities before tax (570,114) (814,244)
Difference between an historical cost depreciation charge and the
actual depreciation charge for the year calculated on the revalued
amount 2,520 1,020
__________ __________
Historical cost loss on ordinary activities before tax (567,594) (813,224)
__________ __________
Historical cost loss for the year sustained after tax (658,072) (662,740)
__________ __________
Maelor Plc
Consolidated Balance Sheet
at 31 March 2006
31 March 2006 31 March 2005
# # # #
Fixed Assets
Tangible assets 383,305 384,593
___________ ____________ ____________ ____________
Current Assets
Stocks 205,590 132,138
Debtors - due within one year 379,374 660,782
Debtors - due after more than
one year - 80,000
Cash at bank and in hand 1,296,463 1,467,692
___________ ____________ ____________ ____________
1,881,427 2,340,612
Creditors: amounts falling due
within one year (696,553) (517,847)
___________ ____________ ____________ ____________
Net current assets 1,184,874 1,822,765
___________ ____________ ____________ ____________
Total assets less current
liabilities 1,568,179 2,207,358
___________ ____________ ____________ ____________
Creditors: amounts falling due
after more than one year (173,899) (193,128)
___________ ____________ ____________ ____________
Net assets 1,394,280 2,014,230
___________ ____________ ____________ ____________
Capital and reserves
Called up share capital 3,428,083 3,410,458
Shares to be issued 23,017 -
Share premium account 12,154,094 12,154,094
Revaluation reserve 151,169 153,689
Profit and loss account (14,362,083) (13,704,011)
___________ ____________ ____________ ____________
Shareholders' funds - equity 1,394,280 2,014,230
___________ ____________ ____________ ____________
Maelor Plc
Consolidated Cash Flow Statement
for the year ended 31 March 2006
Year Ended 31 Year Ended 31
March 2006 March 2005
# #
Cash flow from operating activities (300,746) (854,757)
Returns on investments and servicing of finance 38,433 48,435
Taxation received 108,487 379,378
Capital expenditure (15,857) (1,787)
__________ __________
Cash outflow before management of liquid resources and financing (169,683) (428,731)
Financing (1,546) (17,325)
__________ __________
Decrease in cash in the year (171,229) (446,056)
__________ __________
Reconciliation of Net Cash Flow to Movement in Net Funds
for the year ended 31 March 2006
Year Ended 31 Year Ended 31
March 2006 March 2005
# #
Decrease in cash in the year (171,229) (446,056)
Cash outflow from decrease in debt and lease financing 19,171 17,325
__________ __________
Changes in funds resulting from cash flows (152,058) (428,731)
__________ __________
Movement in net funds in the year (152,058) (428,731)
Net funds at the start of the year 1,255,721 1,684,452
__________ __________
Net funds at the end of the year 1,103,663 1,255,721
__________ __________
Notes to the preliminary results for the year ended 31 March 2006
1. The financial information set out in this report, which was approved by the
directors on 31 May 2006, does not constitute the Company's statutory
accounts for the year ended 31 March 2006 or 31 March 2005 but is derived
from those accounts. Statutory accounts for 2005 have been delivered to the
Registrar of Companies and those for 2006 will be delivered following the
Company's Annual General Meeting. The auditors have still to report on the
2006 accounts. The 2005 audit report was unqualified and did not contain
statements under section 237(2) or (3) of the Companies Act 1985.
2. The preliminary results have been prepared on the basis of the accounting
policies as set out in the financial statements for the year ended 31 March
2005. Key elements of the Company's principal accounting polices are noted
below.
Basis of preparation and consolidation
The financial statements of the Group consolidate the financial statements of
the Company and its subsidiary undertakings whose financial statements were also
made up to 31 March 2006.
The financial statements have been prepared in accordance with applicable
accounting standards and under the historical cost accounting rules, modified to
include the revaluation of freehold property.
3. Loss per ordinary share
The calculation for basic loss per ordinary share uses the numerators and
denominators noted below:
2006 2005
# #
___________ __________
Loss attributable to the Group (660,592) (663,760)
___________ __________
Weighted average number of shares in issue during the year - basic 34,280,833 34,104,583
___________ __________
Basic and diluted losses per share are the same as there is no dilution at
(1.93)p (2005: (1.95)p)
4. The directors do not propose the payment of a dividend.
5. The Report and Accounts of the Company for the year ended 31 March 2006 will
be sent to shareholders shortly. The Annual General Meeting will be held in
Wrexham on Wednesday 2 August 2006.
This information is provided by RNS
The company news service from the London Stock Exchange
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