Alltracel Pharmaceuticals Plc Releases 2006 Full Year Preliminary Results

DUBLIN and LONDON, April 13 /PRNewswire-FirstCall/ -- Alltracel Pharmaceuticals Plc., ("Alltracel", or "the Company"), (AIM:AP.L), the medical technology company focused on the Woundcare, Oralcare and Cardiovascular Health markets, today announces its preliminary results for the year ended 31 December 2006.

- Turnaround in profitability with a first time full year positive EBITDA of EUR1.2M versus a loss of EUR1.1M in 2005

- Significant growth in gross margin percentage up 4 points to 39% driven by the commencement of first technology license revenue in the final quarter

- Continued strong oral care trade performance with business wins in all major markets and advanced discussions on potential M&A activity

- Successful development and commercialisation of patented Nanofibre technology and securing of first license revenue via Nanopeutics(TM) subsidiary

- Significant technological and commercial progress on proprietary PAGA science leading to new market entry in CVH and Cosmeceuticals markets in 2007

Financial Highlights:

- First year of positive EBITDA achieved, operating profit increased and continued revenue growth with margin improvement:

- 2006 EBITDA of EUR1.2M positive versus EBITDA loss of EUR1.1M in 2005

- 2006 Operating profit of EUR315k versus operating loss of EUR1.7M in 2005

- 2006 GM% of 39% versus 35% in 2005 - 2006 revenue of EUR20.1M versus EUR19.2M in 2005 - 2006 closing cash balance of EUR3.0M Operating Highlights:

- Significant scientific breakthroughs in nanofibre technology for both proprietary PAGA and other technologies, the establishment of the Nanopeutics(TM) subsidiary and securing of first revenues:

- Following successful nanofibre trials and development work with technology partners Elmarco and the University of Liberec; Nanopeutics(TM) - a specialist subsidiary dedicated to the commercialisation of Nanospider(TM) technology for the global woundcare and subsequently specialist healthcare markets - was established.

- Nanopeutics(TM) consequently agreed a license bearing exclusive nanotechnology development partnership with a global leader in professional woundcare. This concept development project is ahead of schedule and the successful conclusion to the development work is expected to lead to an exclusive global royalty bearing license and supply agreement for Nanospider(TM) based technology and specialist products and related services for the professional sector.

- Commercial negotiations with this global leader have now commenced and an announcement will be made to the market should these negotiations successfully conclude.

- Nanopeutics(TM) has also signed an exclusive technology and product concept development agreement with HemCon Medical Technologies Inc., the haemorrhage control market leaders in military markets.

- Other partnership negotiations on similar exclusive concept development agreements are ongoing with existing companies in the global consumer woundcare and the global blood filtration markets.

- Technological breakthroughs in anti-microbial and healing properties leading to the 2007 launch of Phytopeutics(TM) Dermal Health Technology for the personal care cosmeceuticals market:

- Following earlier preclinical trials confirming wound and dermal healing properties in a number of finalised product delivery systems and a subsequent range of successful specialist dermal technology tests Alltracel is developing a specialist dermal healing technology for the cosmeceutical market. This proprietary technology covers a full range of dermal health solutions for non traumatised skin; from anti-microbial for younger skin to collagen expression for older skin and will be marketed under the Phytopeutics(TM) technology brand name.

- Alltracel has already been in partnership discussions with a number of specialist skin care and cosmeceutical suppliers and customers internationally. The Company is currently in late stage negotiations with a global leader in the specialist personal care market for an exclusive global technology and business development alliance for Phytopeutics(TM) which is expected to be formalised this quarter.

- Completed successful CVH combination trials and development of a highly soluble variant and initiation of alliance discussions with North American trial partner:

- Successful combination trials were completed with both sterol and statin bio-actives, as was the successful development of a highly soluble derivative of Alltracel's patented cardiovascular health benefiting bioactive.

- Subsequent commercialisation negotiations are now in the final stages with one of the sterol combination trial partners, a North American based CVH specialist, for the establishment of a technology and business development alliance to enter the global nutrition market with a range of patented CVH functional food and bio-active technologies.

- A separate announcement will be made to the market in due course.

- Continued strong organic growth at Westone, the specialist Oral Care division.

Tony Richardson, Chief Executive Officer, commented:

"2006 has been a watershed year in terms of financial performance, technology breakthroughs and significant commercial developments. Our 2006 focus was on delivering first time full year profitability through improved margins and cost controls, developing our proprietary technology to secure revenue through licensing to large scale global partners in our chosen markets and driving continued growth in Westone, our specialist oral care subsidiary. We are pleased to have delivered on these three objectives.

The business reached full year profitability in 2006 for the first time, in terms of both EDITDA achieving a positive EUR1.2M versus a loss of EUR1.1M in 2005; as well as in operating profit where the EUR0.3M profit compared to a loss of EUR1.7M in 2005. This EUR2.0M positive operating profit swing is a result of both a move to a higher margin license model in woundcare as well as continued overhead reduction across the business. Gross margin percentage has grown to 39% for the year versus 35% in 2005 and we will continue to focus on the development of more profitable revenue streams for our technology.

Our oral care business, Westone, continues to perform well and we have continued to build on our strong share of the European private label sector with numerous new business wins from both current and new customers in all our main markets. We remain strongly committed to this business and are looking at a number of M&A opportunities in this area.

We had major scientific breakthroughs during 2006 on our proprietary PAGA technology across all the relevant markets and on a number of technological platforms including thin film and nanofibre. In particular, the establishment and immediate performance of our nanofibre specialist subsidiary Nanopeutics(TM) has been encouraging with our first license revenue deal secured in professional woundcare and exciting prospects for significant subsequent revenue flows in professional and in a number of other woundcare sectors. Securing these type of large scale partnership deals with global market leaders remains a priority for Nanopeutics(TM) for 2007.

In CVH the successful combination trials and development of the soluble variant of our bio-active has led to advanced commercial negotiations with a North American based nutritionals company to establish a specialist alliance to enter the global nutrition market with a range of patented CVH functional food and bio-active technologies. We are excited by the potential here and expect to see Alltracel's first revenue flows in the CVH market in late 2007.

The ongoing technology development work in woundcare, particularly around the anti-microbial and healing capabilities of m.doc(TM) and its variants, has produced a major new market opportunity in the growing and profitable cosmeceutical marketplace. Cosmeceutical efficacy testing and ongoing discussions with potential suppliers and partners over the past six months has led to the development of the Phytopeutics(TM) dermal health technology brand which are now moving to commercialise in 2007. A further announcement is expected on this move later this quarter. Finally we strengthened our overall scientific resources and capability through the appointment of Dr. Pat Fottrell to the Board in May.

Overall it has been a busy year for Alltracel, and we believe the Company is well positioned with first class patented technologies, products, partners and people. We have evolved the business model in the past year to reflect our current stronger proof points on the base technologies, our highly developed network of research, development and manufacturing partners as well as our more profitable and collaborative partnership route to market.

2007 has begun strongly for Alltracel and we expect to continue the momentum throughout the year through these evolving capabilities as well as our innovative approach to both science and commercialisation.

We remain confident of continued growth as we continue the transition to focus on a licence and technology transfer business model rather than one focused on product revenue alone."

Cautionary Statement Regarding Forward-Looking Statements

This announcement contains forward-looking statements. We have based these forward-looking statements on our current plans, expectations and projections about future events. Words like; "intend", "expect", "seek", "will", "plan", "could", "may", and similar expressions often identify forward-looking statements but are not the only ways of doing so. Forward-looking statements involve inherent risks and uncertainties arising from factors outside of our control, such as; financial conditions, regulatory developments, technological developments, activities of our competitors and other factors. We caution you that such factors may cause actual results to materially differ from those contained in forward-looking statements. The forward-looking statements are made only as of the date of this announcement and we do not intend, except as required by law, to update any forward-looking statements to reflect new information or subsequent events or circumstances.

Alltracel Pharmaceuticals PLC Consolidated Profit & Loss Account Unaudited Audited FOR THE YEAR ENDED 31 DECEMBER 2006 2006 2005 EUR EUR Turnover including share of associate turnover 20,054,717 19,244,673 Share of associate turnover (168,263) 0 Group turnover excluding share of associate turnover 19,886,454 19,244,673 Cost of sales (12,109,070) (12,547,970) Gross profit 7,777,384 6,696,703 Selling & Distribution Costs (2,705,743) (3,827,509) Administrative Expenses (4,756,364) (4,552,546) Operating Profit/ (Loss) - continuing operations 315,277 (1,683,352) Share of Loss in Associate undertaking (12,190) - (Loss) / profit on disposal of financial assets (17) (148,216) Interest receivable 62,034 81,727 Interest payable (485,880) (346,646) (Loss) on ordinary activities before taxation (120,776) (2,096,487) Taxation (519,734) (122,082) Minority Interests (968,072) (751,147) Loss for the financial period attributable to ordinary shareholders (1,608,582) (2,969,716) Loss brought forward at the beginning of period (19,452,487) (16,543,327) Translation 86,551 60,556 Loss carried forward at end of period (20,974,518) (19,452,487) Loss per ordinary share (cent) - basic (1.36) (2.76) Weighted average number of shares used in computing loss per ordinary share - basic 118,017,325 107,444,635 Statement of Total Recognised Gains and Losses Unaudited Audited FOR THE YEAR ENDED 31 DECEMBER 2006 2006 2005 EUR EUR Loss for the financial period (1,608,582) (2,969,716) Translation differences 86,551 60,556 Total Recognised Gains and Losses for the financial period (1,522,031) (2,909,160) Consolidated Balance Sheet AT 31 DECEMBER 2006 Unaudited Audited 2006 2005 EUR EUR Fixed Assets Intangible assets 5,320,146 5,094,644 Tangible assets 1,094,237 1,044,336 Financial Assets 1,018,302 917,341 7,432,685 7,056,321 Current Assets Stocks 3,949,456 3,836,664 Debtors 5,376,047 5,184,047 Cash at bank and in hand 3,004,437 2,047,679 12,329,940 11,068,390 Creditors (amounts falling due within one year) (6,679,244) (7,118,574) Net Current Assets 5,650,696 3,949,816 Total Assets Less Current Liabilities 13,083,381 11,006,137 Creditors (amounts falling due after more than one year) (2,536,782) (2,418,897) 10,546,599 8,587,240 Financed By Capital and Reserves Called up share capital 1,619,745 1,347,904 Share premium account 28,673,822 25,805,353 Capital conversion reserve fund 6,736 6,736 Other reserve 40,350 32,350 Profit and Loss account - deficit (20,974,518) (19,452,487) Foreign Exchange Reserve 19,533 (15,730) Shareholders' equity - all equity interests 9,385,668 7,724,126 Minority Interest 1,160,931 863,114 10,546,599 8,587,240 Consolidated Cash Flow FOR THE YEAR ENDED 31 DECEMBER 2006 Unaudited Audited 2006 2005 EUR EUR Net Cash Inflow/ (Outflow) From Operating Activities (12,389) (2,206,708) Returns on Investments and Servicing of Finance Interest received 62,034 81,727 Interest paid (485,880) (314,296) Paid to minority interest (716,852) (751,147) (1,140,698) (983,716) Taxation Taxation Paid (102,142) (362,687) Capital Expenditure and Financial Investments Payments to acquire tangible fixed assets (360,985) (534,702) Sale of tangible fixed assets 3,815 39,812 Payments to acquire intangible fixed assets (445,862) (591,903) (803,032) (1,086,793) Acquisations and disposals Purchase of subsidiary undertaking (1,553,216) (4,469,703) Cash acquired with subsidiary 0 2,583,454 Net cash outflow for acquisation (1,553,216) (1,886,249) Cash Outflow Before Management of Liquid Resources and Financing (3,611,477) (6,526,153) Management of Liquid Resources Disposal of current asset investments 0 539,858 Financing Issue of shares 3,343,983 58,034 Share issue expenses (203,673) (770) New secured Loans 2,789,766 4,232,321 Repayment of Loans (1,201,191) (600,895) Capital element of finance lease repaid (160,650) (38,530) 4,568,235 3,650,160 Increase/ (Decrease) in cash 956,758 (2,336,135) 1. Called Up Share Capital Unaudited Audited 2006 2005 EUR EUR Authorised: 50,000,000,000 ordinary shares of EUR0. 625,000,000 625,000,000 125 each Issued: As at 31 December 2005 129,579,598 shares of EUR0.125 each 1,619,745 As at 31 December 2005 107,832,325 shares of EUR0.125 each 1,347,904 2. Share Premium Unaudited Audited 2006 2005 EUR EUR Balance at beginning of period 25,805,353 23,899,356 Premium on shares issued during the period 3,072,142 1,947,801 Share issue expenses (203,673) (41,804) Balance at end of period 28,673,822 25,805,353 3. Reconciliation of Movement in Shareholders' Unaudited Audited Funds 2006 2005 Group EUR EUR Shareholders' funds at beginning of period 7,724,126 8,631,665 Loss for the year (1,608,582) (2,969,716) Transfer to Other reserves 43,263 32,350 Translation 86,551 44,826 Net proceeds from issue of share capita 3,140,310 1,985,001 Shareholders' funds at end of period 9,385,668 7,724,126 4. Reconcilation of operating profit to net cash flow from operating activities Unaudited Audited 2006 2005 EUR EUR Operating Profit / (Loss) 315,277 (1,683,352) Depreciation 498,181 404,369 Amortisation of Intangibles 124,860 127,029 Amortisation of Goodwill 232,921 188,000 Share in Loss of Associate 12,190 - Gain on sale of fixed asset (17) (19,132) Increase in stocks (112,792) (1,216,817) Increase/ (Decrease) in debtors (191,998) 1,254,537 (Decrease)/ Increase in creditors (1,068,105) (1,261,342) Movement in provisions 177,095 - Net cash outflow from operating activities (12,389) (2,206,708) 5. Analysis of Net Funds Non Cash 01/01/2006 Cashflow movement 31/12/2006 Cash 2,047,679 956,758 3,004,437 Total 2,047,679 956,758 0 3,004,437 Bank & third party loans (3,631,426) (1,588,626) (5,220,052) Finance Leases (326,066) 160,649 (317,084) (482,501) (1,909,813) (471,219) (317,084) (2,698,116) Comments

1. The results for the year ended 31 December 2006 are extracted from the Company's Draft statutory financial statements which will be sent to shareholders upon finalisation. The above preliminary announcement constitutes abbreviated group accounts under regulation 40 of the European Communities Group Accounts Regulations 1992. The abbreviated accounts do not constitute group accounts, copies of which are required by law to be annexed to the annual return of the company. Full accounts for the year ended 31 December 2006, upon which the auditors have not yet issued their opinion, have accordingly not yet been filed with the Registrar of Companies. Full accounts for the year ended 31 December 2005 containing an unqualified opinion have been delivered to the Registrar of Companies.

2. These financial statements have been prepared under Irish GAAP on the basis of the policies as set out in the financial statements for the year ended 31 December 2005 published in Alltracel's 2005 annual report.

3. Earnings per ordinary share is computed by dividing the loss on ordinary activities after taxation of EUR1,608,582 (2005: EUR2,969,716) for the financial year by the weighted average number of ordinary shares in issue of 118,017,235 (2005: 107,444,635). Diluted earnings per share are not disclosed as it is anti-dilutive.

The results announcement was approved by the Board of Directors of Alltracel plc on 12 April 2007.

Notes to Editors

Alltracel, (AIM: AP.L) (www.alltracel.com) the Healthcare Innovation group is focused on taking proprietary technology from research right through to commercialisation in the global healthcare market.

Alltracel Pharmaceuticals Plc., ("Alltracel") was founded in 1996 and is a public company which listed on London's Alternative Investment Market in July 2001.

With corporate headquarters in Dublin, Ireland; Alltracel has a commercial office in London, England; R&D subsidiary in the Czech Republic and manufacturing facilities in Shenzhen, China. Alltracel also has a wide network of research, development and manufacturing partners in Europe, Asia and North America.

Alltracel operates via two main divisions Alltracel Healthcare Group and Alltracel Healthcare Technologies:

Alltracel Healthcare Technologies is focused on the commercialisation effort behind proven innovation technologies and services for the global healthcare market. Alltracel Healthcare Group has a range of stake holdings, joint ventures and wholly owned business units operating in a variety of healthcare categories including Wound Care, Oral Care, Cardiovascular Health.

- Alltracel's specialist Oralcare subsidiary Westone (www.westone.com) is headquartered in London, England and is the leading contract supply and manufacturing partner for the European private label inter-dental market. Westone also partners with a number of leading oral care brands internationally.

- Alltracel's specialist Nanotechnology subsidiary Nanopeutics(TM) (www.nanopeutics.net) is headquartered in Liberec in the Czech Republic and is dedicated to the commercialisation of Nanospider(TM) technology for the global healthcare market.

Alltracel Healthcare Technologies specialises in innovation, research, development and the deployment of proprietary technology in the global healthcare market. Alltracel Healthcare Technologies has established a substantial intellectual property portfolio with patents in a number of healthcare applications areas.

m-doc(TM) is a trademark of Alltracel Pharmaceuticals PLC.

Nanospider(TM) and Nanopeutics(TM) are trademarks controlled by Nanopeutics s.r.o.

For Further Information Contact: Dublin: Denise Cronin Alltracel: +353-1-235-2162 press@alltracel.com London: Deborah Scott Financial Dynamics: +44-(0)207-831-3113 New York: Sean Leous Financial Dynamics: +1-212-850-5626

Alltracel Pharmaceuticals Plc.

CONTACT: For Further Information Contact: Dublin: Denise Cronin,Alltracel: +353-1-235-2162, press@alltracel.com; London: Deborah Scott,Financial Dynamics: +44-0-207-831-3113; New York: Sean Leous, FinancialDynamics: +1-212-850-5626