Preliminary Results to the 30th June 2009
Epistem Plc (LSE: EHP), the rapidly growing UK biotechnology company, announced today its preliminary results for the period to the 30 June 2009.
Exceptional growth
The 2008/09 financial year saw Epistem continue to build on last year’s outstanding performance.
The year’s results saw an impressive 92% increase in year-on-year turnover and a maiden after tax profit for the Company.
Highlights
• Year-on-year sales up 92%
• Contract Research Services 20% sales growth
• Biomarker sales growth and maiden divisional profit
• Announcement of Regenerative Medicine collaboration with Novartis AG
• Maiden Group profit and positive Earnings Per Share
• Strengthened cash balance with improved trading outlook
Chairman’s Statement
‘An exceptional year in challenging times’
Dear Shareholder,
I am delighted to report a number of significant achievements and a continuing improvement in the Epistem results for the year ended 30th June 2009.
Despite uncertain market and trading conditions Epistem has enjoyed another exceptional year in challenging times.
Results
Further details of the results for the period are covered in the Chief Executive’s Review, but operationally and financially the year to 30 June 2009 saw the Company increase revenues by 92% to £4.0m (2008: £2.1m) with a Group loss on ordinary activities before taxation of £0.7m (2008: Loss £1.3m). Based on future profitability and the benefit of the prior year losses’ tax credit, the Company generated its first after tax profit of £0.1m (2008: Loss £1.2m). Cash reserves were £3.7m (2008: £2.1m).
During the year the Company continued to make significant progress across each of its divisions:
• Contract Research Services revenues grew by 20% to £2.3m (2008: £1.9m). The growth was supported by the continuing expansion of our US government bio-defence contract and the launch of new service offerings. Whilst the financial market uncertainties caused some disruption over the year, the division moved carefully through this period, with firmer trading experienced over the second half.
• In its first full year of operation following the successful share placing in 2007, Biomarker revenues grew to £0.7m (2008: £0.2m) to record a first operating profit for the division. We anticipate further growth in this division over the forthcoming year.
• The Novel Therapies division announced its first research and development collaboration with Swiss based Novartis AG. The Regenerative Medicine collaboration is targeted at identifying new drug targets and therapeutics across a variety of epithelial disease areas. Under the terms of the agreement, Novartis has paid Epistem an upfront cash payment and provide research funding. If leads are commercialised, Epistem is eligible to receive tiered royalties on worldwide sales.
• Strengthened investor relations and communications have further advanced the visibility of the Company and we retain a close relationship with our investors to ensure they are kept informed of progress. This close communication has maintained strong growth in the share price performance over the period. In the light of our anticipated future growth we will continue to build on our investor communications.
• The Company also reports its first positive earnings per share.
Outlook
Epistem is transforming itself into a diverse, technology leading and profitable biotechnology group underpinned by strong growth. Despite the difficult to judge market and trading conditions, the outlook for Epistem is increasingly positive, although we remain vigilant around our future strategy.
Each of our divisional businesses is establishing itself in a rapidly changing biotechnology/companion biomarker segment. Despite tough market conditions, the profitable Contract Research Services division has performed well with the Biomarker division also profitable and growing, providing further support for our forecast outlook. With the Novel Therapies first drug discovery collaboration now in place with one of the largest pharmaceutical companies in the world, we anticipate rapid advancement of our drug discovery and development programme and acceleration of identified leads. Epistem is positioning itself as a world leader in therapeutic discovery in the field of epithelial stem cell regulation and control. With industry awareness and visibility of our technology still growing we expect to see the Company advance further over the coming year.
Finally, I would like to thank the Board and our employees for their effort and commitment in driving Epistem’s progress over the past year, as well as our investors whose valued support has provided a stable platform for our continued growth.
