LONDON and CAMBRIDGE, MA--(Marketwire - February 08, 2011) -
Antisoma plc (LSE: ASM; USOTC:
ATSMY) announces its interim financial information for the period ended 31
December 2010.
Announced today
* Steps initiated to find a transaction that maximises value of cash and
assets
* Company will by 31 March 2011 reduce operation to 10 or fewer staff to
minimise ongoing operating costs whilst ensuring receipt of long-term
receivables
* Actively looking at all options to maximise shareholder value
* Board downsizing to be announced shortly
Recent developments
* AS1413 discontinued after phase III trial misses primary endpoint
(January)
* AS1411 phase IIb trial in AML stopped (January)
Financial highlights
* Cash and short-term deposits at 31 December 2010 of GBP 23.4 million
(31 December 2009: GBP 49.6 million)
* Revenues of GBP 0.3 million (H1 2009: nil)
* Loss after tax of GBP 15.4 million (H1 2009: loss of GBP 18.3 million)
* Impairments to be recorded in H2
Glyn Edwards, CEO of Antisoma, said: "We are very disappointed that AS1413 did not succeed. However, we are now seeking to deliver the maximum value to shareholders from the remaining assets of the business."
The statements made above concerning a possible offer for the Company may or may not lead to an offer being made for the entire issued share capital of the Company ('the Possible Offer'). There can be no certainty that an offer will be forthcoming or as to the terms on which such an offer might be made. The Company, which is being advised by Canaccord Genuity Limited, will make a further announcement when appropriate.
Number of Relevant Securities in Issue:
In accordance with Rule 2.10 of the City Code on Takeovers and Mergers (the 'Code'), the Company's issued share capital consists of 632,462,777 ordinary shares with a nominal value of 1 pence each ('Ordinary Shares'), each share having equal voting rights.
The ISIN number of the Ordinary Shares is GB0055696032
Canaccord Genuity Limited Tel: +44 (0)20 7050 6500
Robert Finlay
Henry Fitzgerald-O'Connor
Kit Stephenson
Canaccord Genuity Limited ("Canaccord Genuity"), which is authorised and
regulated in the United Kingdom by the Financial Services Authority, is
acting
exclusively for Antisoma and no one else in connection with the Possible
Offer
and will not be responsible for anyone other than Antisoma for providing
the
protections afforded to clients of Canaccord Genuity or for providing
advice in
relation to the Possible Offer, or any matter referred to herein.
Disclosure requirements of the Takeover Code (the 'Code')
Under Rule 8.3(a) of the Code, any person who is interested in 1% or more of any class of relevant securities of an offeree company or of any paper offeror (being any offeror other than an offeror in respect of which it has been announced that its offer is, or is likely to be, solely in cash) must make an Opening Position Disclosure following the commencement of the offer period and, if later, following the announcement in which any paper offeror is first identified.
An Opening Position Disclosure must contain details of the person's interests and short positions in, and rights to subscribe for, any relevant securities of each of (i) the offeree company and (ii) any paper offeror(s). An Opening Position Disclosure by a person to whom Rule 8.3(a) applies must be made by no later than 3.30 pm (London time) on the 10th business day following the commencement of the offer period and, if appropriate, by no later than 3.30 pm (London time) on the 10th business day following the announcement in which any paper offeror is first identified. Relevant persons who deal in the relevant securities of the offeree company or of a paper offeror prior to the deadline for making an Opening Position Disclosure must instead make a Dealing Disclosure.
Under Rule 8.3(b) of the Code, any person who is, or becomes, interested in 1% or more of any class of relevant securities of the offeree company or of any paper offeror must make a Dealing Disclosure if the person deals in any relevant securities of the offeree company or of any paper offeror. A Dealing Disclosure must contain details of the dealing concerned and of the person's interests and short positions in, and rights to subscribe for, any relevant securities of each of (i) the offeree company and (ii) any paper offeror, save to the extent that these details have previously been disclosed under Rule 8. A Dealing Disclosure by a person to whom Rule 8.3(b) applies must be made by no later than 3.30 pm (London time) on the business day following the date of the relevant dealing.
If two or more persons act together pursuant to an agreement or understanding, whether formal or informal, to acquire or control an interest in relevant securities of an offeree company or a paper offeror, they will be deemed to be a single person for the purpose of Rule 8.3.
Opening Position Disclosures must also be made by the offeree company and by any offeror and Dealing Disclosures must also be made by the offeree company, by any offeror and by any persons acting in concert with any of them (see Rules 8.1, 8.2 and 8.4).
Details of the offeree and offeror companies in respect of whose relevant securities Opening Position Disclosures and Dealing Disclosures must be made can be found in the Disclosure Table on the Takeover Panel's website at www.thetakeoverpanel.org.uk, including details of the number of relevant securities in issue, when the offer period commenced and when any offeror was first identified. If you are in any doubt as to whether you are required to make an Opening Position Disclosure or a Dealing Disclosure, you should contact the Panel's Market Surveillance Unit on +44 (0)20 7638 0129.
Except for the historical information presented, certain matters discussed
in
this announcement are forward looking statements that are subject to a
number
of risks and uncertainties that could cause actual results to differ
materially
from results, performance or achievements expressed or implied by such
statements. These risks and uncertainties may be associated with product
discovery and development, including statements regarding the Group's
clinical
development programmes, the expected timing of clinical trials and
regulatory
filings. Such statements are based on management's current expectations,
but
actual results may differ materially.
Joint Chairman and CEO's statement
Overview
This has been a difficult period for Antisoma. We conducted a carefully designed phase III trial for AS1413 and this provided a clear negative result. Having given careful consideration to our situation following this outcome, we have initiated the search for a transaction that will deliver maximum value to shareholders from our remaining assets.
Development of AS1413 discontinued
We evaluated AS1413 in a large, randomised controlled phase III trial. This compared a regimen of AS1413 and cytarabine with standard therapy of daunorubicin and cytarabine in patients with secondary acute myeloid leukaemia (secondary AML). The primary endpoint was a comparison of remission rates. Unfortunately, we did not see the improvement in remission rates we were looking for, so we see no merit in further work on AS1413.
AS1411 requires change in direction
We felt it was important to have an understanding of the status of our AS1411 programme at the time we got phase III data on AS1413. AS1411 was in a phase IIb trial in patients with AML. An early look at the data from this study showed that it was unlikely to provide a firm basis for progress to a phase III trial in AML. Given this, and the desire to minimise cash outflows from the business after the AS1413 result, we have terminated the phase IIb trial. We have also suspended other work on the AS1411 programme pending a possible transaction, but we continue to believe that the drug has significant potential as a cancer treatment.
Other key programmes
In addition to AS1411, we believe there is value in our two promising preclinical programmes. These are the DCAM (dendritic cell autoimmune modulator) and PPM1D (protein phosphatase magnesium dependent-1-delta) programmes.
DCAMs are small-molecule kinase inhibitors with potential as oral therapies for auto-immune conditions such as inflammatory bowel diseases and rheumatoid arthritis.
We have generated good supporting data in animal models and the programme is ready to be taken forward towards the initiation of clinical trials.
PPM1D is a phosphatase that is expressed in many forms of cancer and whose presence can be readily detected, providing potential for targeting of patients who could respond. One obvious application for PPM1D inhibitors is in breast cancer, where around one sixth of tumours over-express or have amplified PPM1D. The programme has been developed under collaboration with the Institute of Cancer Research in London and is ready to be taken forward towards the clinic.
Financial review
Overview
During 2010 we took measures to conserve cash so that we would be in the best possible position after any outcome from the AS1413 trial. This is reflected in our figures for the period. As a result of the cessation of clinical trial activities following the announcement of 31 January, our external R&D costs are undergoing a substantial new reduction, further reducing cash outflows from the business.
Results of operations
The Group recorded revenues totalling GBP0.3 million for the six months ended 31 December 2010. This revenue derives from a royalty payment that was payable to Xanthus, the business we acquired in 2008. The Group also recorded GBP0.2 million of other operating income. This was a grant awarded by the United States Government because of our investment in qualifying research and development and received in November 2010.
During the period, fixed assets were sold for a profit of GBP0.1m.
Total operating expenses for the six months ended 31 December 2010 were GBP16.7 million (2009: GBP21.3 million). Research and development expenditure has decreased by GBP3.3 million to GBP14.7 million, reflecting the Group's increased efforts to conserve cash and the reduction in expenditure on the phase III trial of AS1413 as it came close to completion. An impairment loss of GBP4.2 million, reflecting discontinuation of ASA404, has been recognised in research and development. Administrative expenditure decreased by GBP1.3 million, again reflecting containment of costs by the Group.
As a result of the decision to stop development of AS1413 and halt the trial of AS1411 in AML, impairment reviews will be performed on the goodwill and intangible assets associated with these products. No impairment has been recorded in these results because this is a non-adjusting post balance sheet event (see note 8).
The Group estimates that an impairment of approximately GBP54.3 million will be booked in the accounts for the year ended 30 June 2011; however, a full analysis will be required.
During the period foreign exchange rates were less volatile than in the previous year. We made exchange losses of GBP0.1 million on translation of our US dollar and Euro balances into sterling (2009: GBP1.3 million gain).
Our loss of GBP15.4 million reflects the difference between our revenues, finance income and tax credit and our operating expenses, as we continued to invest during the period in our drug pipeline.
Liquidity and capital resources
Cash, cash equivalents and short-term deposits amounted to GBP23.4 million as at 31 December 2010 (30 June 2010: GBP32.1 million; 31 December 2009: GBP49.6 million). Net cash used in operating activities for the six months ended 31 December 2010 was GBP8.6 million (six months ended 31 December 2009: GBP18.4 million).
In managing our cash resources, we have maintained a conservative treasury policy with short deposit terms and diversified counterparty risk.
Taxation
We have recognised a credit of GBP0.8 million in respect of an R&D tax credit receivable for the first six months of the financial year.
Loss per share
The basic loss per share for the half-year ended 31 December 2010 was 2.4p (half-year ended 31 December 2009 3.0p); the share capital in the Company has increased because some former employees have exercised share options and certain Non-Executive Directors have elected to be paid in shares.
The related parties to Antisoma have been identified by management and are outlined in note 7 of the interim accounts.
Outlook
We have considered our position carefully following last week's announcement that the AS1413 programme would be terminated. As a result, we are now seeking a transaction in order to maximise the value to shareholders of our remaining assets, which include a number of promising drug development programmes as well as the cash on our balance sheet. In the meantime, we are restructuring the business; we will make a further announcement regarding changes to the Board in the near future.
Barry Price Chairman Glyn Edwards CEO
Half-Yearly Financial Report for the six months ended 31 December 2010
Consolidated Income Statement
for the six months ended 31 December 2010
----------------------------------------------------------------------
6 months 6 months Year
ended 31 ended 31 ended 30
December December June
2010 2009 2010
unaudited unaudited audited
Notes GBP'000 GBP'000 GBP'000
----------------------------------------------------------------------
Revenue 337 - 20,346
----------------------------------------------------------------------
Gross profit 337 - 20,346
Research and development
expenditure (14,697) (18,040) (35,500)
Administrative expenses (2,008) (3,297) (7,888)
----------------------------------------------------------------------
Total operating expenses (16,705) (21,337) (43,388)
Other operating income 152 - -
----------------------------------------------------------------------
Operating loss (16,216) (21,337) (23,042)
Finance income 4 71 1,555 1,678
----------------------------------------------------------------------
Loss before taxation (16,145) (19,782) (21,364)
Taxation 765 1,502 2,712
----------------------------------------------------------------------
Loss for the period (15,380) (18,280) (18,652)
----------------------------------------------------------------------
Loss per ordinary share
Basic and diluted 5 (2.4)p (3.0)p (3.0)p
----------------------------------------------------------------------
Consolidated Statement of Comprehensive Income
for the six months ended 31 December 2010
---------------------------------------------------------------------------
6 months 6 months Year
ended 31 ended 31 ended
December December 30 June
2010 2009 2010
unaudited unaudited audited
GBP'000 GBP'000 GBP'000
---------------------------------------------------------------------------
---
Loss for the period (15,380) (18,280) (18,652)
Exchange translation difference on
consolidation (287) 447 1,000
---------------------------------------------------------------------------
Other comprehensive income for the period net of
tax (287) 447 1,000
---------------------------------------------------------------------------
Total comprehensive income for the period (15,667) (17,833) (17,652)
---------------------------------------------------------------------------
Consolidated Statement of Financial Position
as at 31 December 2010
---------------------------------------------------------------------------
As at 31 As at 31 As at 30
December December June
2010 2009 2010
unaudited unaudited audited
GBP'000 GBP'000 GBP'000
---------------------------------------------------------------------------
ASSETS
Non-current assets
Goodwill 7,162 6,957 7,353
Intangible assets 47,127 51,615 51,824
Property, plant and equipment 1,052 1,960 1,173
---------------------------------------------------------------------------
55,341 60,532 60,350
---------------------------------------------------------------------------
Current assets
Trade and other receivables 1,071 1,947 2,106
Current tax receivable 1,038 4,984 3,614
Short-term deposits 8,695 42,267 21,965
Cash and cash equivalents 14,687 7,377 10,098
---------------------------------------------------------------------------
25,491 56,575 37,783
LIABILITIES
Current liabilities
Trade and other payables (5,738) (8,046) (7,220)
Current tax payable (1) - -
Deferred income - (19,690) -
Provisions (2,134) (2,664) (3,071)
---------------------------------------------------------------------------
(7,873) (30,400) (10,291)
---------------------------------------------------------------------------
Net current assets 17,618 26,175 27,492
---------------------------------------------------------------------------
Total assets less current liabilities 72,959 86,707 87,842
---------------------------------------------------------------------------
Non-current liabilities
Deferred tax liabilities (7,162) (6,957) (7,353)
Provisions (16) (454) (28)
---------------------------------------------------------------------------
(7,178) (7,411) (7,381)
---------------------------------------------------------------------------
Net assets 65,781 79,296 80,461
---------------------------------------------------------------------------
Shareholders' equity
Share capital 10,656 10,592 10,628
Share premium 122,091 122,015 122,070
Other reserves 47,632 47,366 47,919
Profit and loss account (114,598) (100,677) (100,156)
--------------------------------------------------------------------------
Total shareholders' equity 65,781 79,296 80,461
---------------------------------------------------------------------------
Consolidated Statement of Changes in Equity
for the six months ended 31 December 2010
---------------------------------------------------------------------------
Shares Other Other Profit and
Share Share to be reserve : reserve: loss Total
capital premium issued retranslation merger account
---------------------------------------------------------------------------
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
---------------------------------------------------------------------------
At 1 July
2009 10,480 119,783 2,273 7,664 39,255 (83,240) 96,215
Total
comprehensive
income for
the period - - - 447 - (18,280) (17,833)
New share
capital
issued 112 2,232 (2,273) - - - 71
Share
options:
value of
employee
services - - - - - 843 843
---------------------------------------------------------------------------
At 31
December
2009 10,592 122,015 - 8,111 39,255 (100,677) 79,296
---------------------------------------------------------------------------
At 1 July
2009 10,480 119,783 2,273 7,664 39,255 (83,240) 96,215
Total
comprehensive
income for
the year - - - 1,000 - (18,652) (17,652)
New share
capital
issued 148 2,287 (2,273) - - - 162
Share
options:
value of
employee
services - - - - - 1,736 1,736
---------------------------------------------------------------------------
At 30 June
2010 10,628 122,070 - 8,664 39,255 (100,156) 80,461
---------------------------------------------------------------------------
At 1 July
2010 10,628 122,070 - 8,664 39,255 (100,156) 80,461
Total
comprehensive
income for
the period - - - (287) - (15,380) (15,667)
New share
capital
issued 28 21 - - - - 49
Share
options:
value of
employee
services - - - - - 938 938
---------------------------------------------------------------------------
At 31
December
2010 10,656 122,091 - 8,377 39,255 (114,598) 65,781
---------------------------------------------------------------------------
Consolidated Statement of Cash Flows
for the six months ended 31 December 2010
---------------------------------------------------------------------------
6 months 6 months Year
ended 31 ended 31 ended
December December 30 June
2010 2009 2010
unaudited unaudited audited
GBP'000 GBP'000 GBP'000
---------------------------------------------------------------------------
Cash flows from operating activities
Loss for the period/year (15,380) (18,280) (18,652)
Add back:
Foreign exchange loss/(gain) 216 (187) (779)
Finance income (71) (1,555) (1,678)
Tax credit (765) (1,502) (2,712)
Depreciation of property plant and equipment 246 337 673
(Gain)/loss on disposal of property, plant and
equipment (84) - 534
Impairment of intangible assets 4,158 343 1,261
Share-based payments 938 843 1,736
---------------------------------------------------------------------------
Operating cash flows before movement in working
capital (10,742) (20,001) (19,617)
Decrease/(increase) in debtors 1,011 (319) (420)
(Decrease)/increase in creditors and provisions (2,360) 1,643 (19,089)
---------------------------------------------------------------------------
Cash used in operations (12,091) (18,677) (39,126)
Finance income 120 243 442
Income taxes received - 2 582
Research and development tax credit received 3,342 - 2,000
---------------------------------------------------------------------------
Net cash used in operating activities (8,629) (18,432) (36,102)
---------------------------------------------------------------------------
Cash flows from investing activities
Purchase of property, plant and equipment (128) (330) (459)
Proceeds on disposal of property, plant and
equipment 84 - 68
Sale/(purchase) of short-term deposits 13,270 (14,443) 5,859
---------------------------------------------------------------------------
Net cash generated from/(used in) investing
activities 13,226 (14,773) 5,468
---------------------------------------------------------------------------
Cash flows from financing activities
Proceeds from issue of ordinary share capital 49 71 162
---------------------------------------------------------------------------
Net cash generated from financing activities 49 71 162
---------------------------------------------------------------------------
Net increase/(decrease) in cash and cash
equivalents 4,646 (33,134) (30,472)
Exchange (losses)/gains on cash and bank overdrafts (57) 1,296 1,355
Cash and cash equivalents at beginning of the
period 10,098 39,215 39,215
---------------------------------------------------------------------------
Cash and cash equivalents at end of the period 14,687 7,377 10,098
---------------------------------------------------------------------------
Notes to the interim accounts
1. Basis of Preparation and Accounting Policies
The interim financial statements do not comprise statutory accounts within the meaning of Section 434 of the Companies Act 2006. The Company is a public limited company which is listed on the London Stock Exchange and is incorporated and domiciled in the United Kingdom. The address of its registered office is Chiswick Park Building 5, 566 Chiswick High Road, London, W4 5YF.
Statutory accounts for the year ended 30 June 2010 were approved by the Board of Directors on 5 August 2010 and delivered to the Registrar of Companies. The report of the auditors on those accounts was unqualified, did not contain an emphasis of matter paragraph and did not contain any statement under Section 498 of the Companies Act 2006. This half-yearly financial report has been reviewed, not audited.
This condensed consolidated half-yearly financial information for the six months ended 31 December 2010 has been prepared in accordance with the Disclosure and Transparency Rules of the Financial Services Authority and with IAS 34 - 'Interim Financial Reporting' as adopted by the European Union. This half- yearly condensed consolidated financial report should be read in conjunction with the annual financial statements for the year ended 30 June 2010, which have been prepared in accordance with IFRS as adopted by the European Union. Except as described below, the accounting policies adopted are consistent with those of the annual financial statements for the year ended 30 June 2010, as described in those financial statements.
Taxes on income in interim periods are accrued using the tax rate that would be applicable to total expected annual earnings.
The following new standards, amendments to standards or interpretations are mandatory for the first time for the financial year beginning 1 July 2010 although they are not considered to be applicable for the Group at this time:
* Amendment to IAS 32, 'Financial instruments: Presentation', -
classification of rights issues. The amendment addresses the accounting
for rights issues (rights, options or warrants) that are denominated in
a currency other than the functional currency of the issuer. Prior to
the amendment, such rights issues were accounted for as derivative
liabilities. The amendment states that, if such rights are issued pro
rata to an entity's existing shareholders for a fixed amount of any
currency, they should be classified as equity, regardless of the
currency in which the exercise price is denominated. Effective for
annual periods beginning on or after 1 February 2010.
* Amendment to IFRS 1, 'First time adoption' - financial instrument
disclosures. This amendment provides first-time adopters with the same
transition provisions as included in the amendment to IFRS 7 regarding
comparative information for the new three-level classification
disclosures. Effective for annual periods beginning on or after 1 July
2010.
* IFRIC 19, 'Extinguishing financial liabilities with equity
instruments'. This interpretation clarifies the accounting when an
entity renegotiates the terms of its debt with the result that the
liability is extinguished through the borrower issuing its own equity
instruments to the lender. A gain or loss is recognised in the profit
and loss account based on the fair value of the equity instruments
compared to the carrying amount of the debt. Effective for annual
periods beginning on or after 1 July 2010
There are no other new Standards likely to have an effect on the financial statements for the year ending 30 June 2011.
The following amendments to existing standards and new interpretations have been published and are mandatory for the Group's future accounting periods. They have not been early adopted in these financial statements and are not expected to have a significant impact on future financial statements when adopted:
* Improvements to International Financial Reporting Standards 2010
(Effective for annual periods beginning on or after 1 January 2011
subject to endorsement by the European Union);
* IAS 24 (Revised), Related party disclosures (Effective for annual
periods beginning on or after 1 January 2011 subject to endorsement by
the European Union);
* IFRS 9, Financial Instruments (Effective for annual periods beginning
on or after 1 January 2013 subject to endorsement by the European
Union);
* IFRIC 14 (Amendment), IAS 19 Prepayments of a minimum funding
requirement (Effective for annual periods beginning on or after 1
January 2011).
2. Segmental information
Antisoma's operating segments are being reported based on the financial information provided to the Senior Management Team, which is used to make strategic decisions. The Senior Management Team are of the opinion that under IFRS 8 - 'Operating segments' the Group has only one operating segment, b
