TIDMAVCT
RNS Number : 3352D
Avacta Group PLC
26 October 2015
26 October 2015
Avacta Group plc
("Avacta" or "the Group")
Preliminary Results for the Year Ended 31 July 2015
Substantial progress in early commercialisation of Affimer(R)
molecules as potentially superior alternatives to antibodies
Significant funds raised to establish in-house Affimer
therapeutics programme
Avacta Group plc (AIM: AVCT), the developer of Affimer(R)
biotherapeutics and research reagents, announces its preliminary
results for the year ended 31 July 2015.
Substantial progress has been made against the key objectives
set for the Affimer technology at the beginning of the reporting
period and the Group reports revenues from sales of products and
Affimer services that are in line with market expectations and the
pre-close trading statement issued on 7 July 2015.
Highlights
Operational
-- Established high throughput Affimer reagents screening,
characterisation and production operations sufficient to meet
potential mid-term demand.
-- Affimer biotherapeutic programme initiated:
o Experienced team of biotech scientists led by Dr Amrik Basran
(GSK, Domantis).
o Initial key development milestones met.
o In-house programmes in oncology and blood clotting disorders
begun (post-period).
Commercial
-- Key research partnership with Moderna Therapeutics signed.
o Development of Affimers for mRNA therapeutics.
-- Business development team established.
o Key hires from major antibody suppliers such as Abcam (AIM:
ABC) and Cell Signaling Technologies (Private US).
-- Order intake of 30 custom Affimer projects achieved in the period.
o Customers include pharmaceutical, biotechnology and
diagnostics companies as well as academics.
-- Revenue from commercialisation of Affimer technology of
GBP0.44m, in line with market expectations.
o Good pipeline of orders and qualified sales enquiries carried
forward into FY16.
-- On-line catalogue of Affimer reagents now focused on a tool
kit to probe the ubiquitin proteasome system - a significant gap in
antibody research reagent market.
Financial
-- Group revenues of GBP1.81m (2014: GBP1.62m) following
disposal of Optim product to US acquirer.
o Avacta Life Sciences revenue GBP0.44m (2014: GBP0.03m).
- Moderna Therapeutics contributed revenue of GBP0.36m (2014:
GBPNil).
o Avacta Animal Health revenue fell by 14% to GBP1.37m (2014:
GBP1.59m), representing the loss of one bulk customer late in the
prior financial year.
-- Underlying operating loss increased to GBP2.85m (2014: GBP1.62m).
-- Statutory operating loss increased to GBP5.57m (2014: GBP2.05m).
o Impairment of Sensipod development costs of GBP2.38m.
-- Sale of non-core Optim product which realised cash of $3.5m
(GBP2.21m), with a potential further $1.5m in deferred
consideration.
o Loss on disposal with impairment of GBP5.10m.
-- Total loss for the period increased to GBP9.99m (2014: GBP1.49m).
o Loss per share increased to 0.20p (2014: 0.04p).
o Underlying(1) loss per share increased to 0.06p (2014:
0.04p).
-- Group reported cash balances of GBP7.33 million at 31 July
2015 prior to successful fund raising which completed post period
end on 3 August. (2014: GBP11.48 million).
Post-Period
-- Successful fund raising generating net proceeds of GBP21m to
support development of the first therapeutic Affimers into the
clinic.
-- Dr Mike Owen appointed as Non-executive Director. Previously
SVP and global Head of Biopharmaceuticals Research at
GlaxoSmithKline.
Alastair Smith, Chief Executive Officer, commented:
"The Board believes that the Affimer technology has enormous
potential both as a source of novel biotherapeutics and research
reagents. These molecules possess innate attributes that suggest
they could be superior alternatives to antibodies. Our strategic
mission is to realise this potential and take a meaningful share of
a very large and growing market and we have made important progress
towards this goal in the last financial year.
"There has been good early interest in our Affimer research
reagents and the scaled up operations that we have established have
delivered the first commercial Affimer reagents into customers'
hands.
"The strategic deal with Moderna Therapeutics in large part
underpinned the rationale for our subsequent significant fund
raise, completed during August, which has allowed the Company to
expand significantly its in-house Affimer therapeutics development
programme. These monies should allow us, amongst other objectives,
to deliver at least one Affimer drug candidate in to the clinic in
the next few years. We are therefore particularly delighted to have
attracted Dr Mike Owen as a Non-executive Director to the Board as
he brings huge scientific, clinical trial and commercial experience
in this space."
Enquiries:
Avacta Group plc Tel: +44 (0) 844 414
Alastair Smith, Chief Executive Officer 0452
Tim Sykes, Chief Financial Officer www.avacta.com
Numis Securities Limited Tel: +44 (0) 207 260
Michael Meade / Freddie Barnfield - Nominated 1000
Adviser www.numiscorp.com
James Black - Corporate Broking
WG Partners Tel: +44 (0) 203 705
David Wilson 9318
Nigel Barnes Tel: +44 (0) 203 705
Claes Spång 9330
www.wgpartners.co.uk
Media Enquiries Tel: +44 (0) 203 727
FTI Consulting 1000
Simon Conway / Natalie Garland-Collins avacta@fticonsulting.com
(1) Excluding the loss from discontinued operations and
impairment of intangible assets.
Notes to Editors
Avacta Group plc (www.avacta.com)
Avacta's principal focus is on its proprietary Affimer(R)
technology which is a novel engineered alternative to antibodies
that has wide application in Life Sciences for diagnostics,
therapeutics and general research and development.
Antibodies dominate markets worth in excess of $50bn despite
their shortcomings. The Affimer technology has been designed to
address many of these negative performance issues, principally: the
time taken to generate new antibodies, the reliance on an animal's
immune response, poor specificity in many cases, and batch to batch
variability. The Affimer technology is based on a small protein
that can be quickly generated to bind with high specificity and
affinity to a wide range of protein targets.
Avacta has a pre-clinical biotech development programme with an
in-house focus on oncology and bleeding disorders as well as
several partnered development programmes. Avacta is commercialising
Affimer reagents through custom Affimer services to provide bespoke
solutions to customers and via a growing on-line catalogue of
Affimer reagents.
Chairman's and Chief Executive's Report
Overview
The year ended 31 July 2015 has been a transformational one for
the Affimer technology and for Avacta. The Directors believe that
the Affimer technology presents the most significant opportunity
for the Group to deliver value growth for shareholders and
therefore, the Company has been through a process of focusing its
resources on the technology. The progress made during the past year
helped secure the Company's first substantial therapeutic
partnership with Moderna Therapeutics and allowed the Company to
raise GBP21m on 3 August to support in-house drug development plans
as well as put the infrastructure in place to allow additional
therapeutic partnerships to be established. The Affimer technology
has significant potential as the next generation biotherapeutic
platform whilst also offering the benefit of near term revenues
from a research reagents business capable of addressing the
weaknesses of antibodies as research tools.
Avacta Life Sciences
Key performance targets for the year met
The key performance targets established for the Affimers
business for the period ending 31 July 2015 were: to achieve
scale-up of the established Affimer reagents generation and
production processes to support future growth; to demonstrate
clearly that commercial traction was being achieved; to grow the
on-line catalogue of Affimer reagents; and to generate pre-clinical
data that would demonstrate the potential of Affimer therapeutics.
The Company has met these targets and has been able to capitalise
on this progress to secure a substantial fund raise that will
accelerate the first Affimer therapeutics into the clinic. The
Directors believe this will provide a significant value inflection
point for the technology and the business.
Early traction with custom Affimer projects highlights potential
as research reagents
A business development team was established in Q2 of the
reporting period to promote Affimer reagents as research tools, as
diagnostic reagents and as therapeutics. The team comprises senior
sales executives from major antibody suppliers such as Abcam and
Cell Signaling Technologies. The team has rapidly grown the
pipeline of sales enquiries and delivered an order intake in the
reporting period of 30 custom Affimer projects from a wide range of
customer types including several large biopharmaceutical and
pharmaceutical companies, smaller biotechs, diagnostics and other
life sciences companies and academics. Around a third of these
projects were delivered during the year and the rest carried
through as order book and work in progress into FY16. The team
continues to add new sales leads for custom Affimer projects and
convert this interest into order intake.
Trading in the first part of the current year is in line with
last year and first repeat orders have been received.
(MORE TO FOLLOW) Dow Jones Newswires
October 26, 2015 03:00 ET (07:00 GMT)
At this early stage in the commercialisation of Affimer research
reagents, the key driver of growth is increasing awareness of the
technical and commercial advantages of the Affimer technology over
antibodies including:
-- Quick to develop
-- Excellent engineered-in specificity
-- Targets not limited by an immune response
-- Security of supply and batch to batch consistency
-- Small, robust and stable; easily functionalised
-- Functional within live cells
-- Unencumbered IP - straightforward licensing/exclusivity
-- No use of animals required to generate the Affimer
-- Can be lyophilised for shipping and storage
In-house and third party applications data are key to speed of
commercial success
The Company has made good progress in generating data to
demonstrate all of the technical benefits which can be seen in
technical presentations, data sheets and application notes on the
Avacta Life Sciences web site. Reports by third parties of their
own data that demonstrate the performance of Affimer reagents in
their hands is the most powerful marketing material. Such reports
are now beginning to appear and the Company recently reported two
such examples (1. ProtATonce demonstrated the use of Affimer
reagents to replace antibodies in assays run on the Luminex
platform, the market leading multiplexed assay system; 2.
University of Copenhagen demonstrated the use of Affimer reagents
to reduce the susceptibility of barley to powdery mildew). A number
of key opinion leaders are now working with the Company and their
first peer reviewed publications of Affimer reagents performance is
anticipated in the current financial year.
During the reporting period significant advances have been made
in generating data demonstrating the use of Affimer reagents in a
much wider range of applications than had previously been
exemplified. These now include several high value market
opportunities:
-- Immunohistochemistry/immunofluorescence - a form of staining
of tissue sections to highlight the presence and distribution of
proteins which are often indicative of disease. This is a very
widely used technique in pathology and in drug and diagnostics
development. The immunohistochemistry market is the dominant
segment (c.$1bn) of the tissue diagnostics market which is expected
to reach $3.9bn by 2018.(2)
-- Super high-resolution microscopy - modern techniques in
microscopy (e.g. PALM, STORM, STED)(3) are delivering resolution
that is now limited by the size of the antibodies used. Since
Affimer reagents are ten times smaller than antibodies the
resolution of these techniques could be pushed even further down to
molecular levels.
-- Flow cytometry - is a laser based technique used for cell
counting, cell sorting and biomarker detection. It allows for very
high throughput analysis of complex biological samples to be
carried out, analysing up to thousands of particles per second.
Flow cytometry applications represent about 16% of the research
antibody market.(4)
-- Pull-downs and affinity purification - use of an affinity
reagent to pull a target out of a complex mixture as a purification
or concentration step widely used in bioprocessing and biochemical
analyses of many different types.
-- Inhibition of protein-protein interactions - the blocking or
modulation of a biological interaction. Affimer reagents have been
shown to have inhibitory effects in vitro and in living cells.
Affimer reagents that block SH2 domains (signal transduction),
FcGRIIIa (inflammatory disease), PD-L1 (immune checkpoint;
oncology), kRas (oncology) and fibrinogen (blood clotting) have all
been demonstrated. The Affimer reagents discovery process that has
been put in place during the reporting period is capable of
differentiating between Affimer reagents that simply bind to the
target and those that inhibit the target's biology. Therefore,
promising potential Affimer therapeutics may be selected from the
Affimer reagents repertoire for separate development.
(2)
http://tissuepathology.com/2014/04/16/tissue-diagnostics-market-worth-3924-01-million-by-2018/#axzz3oe25ALIu
(3) https://en.wikipedia.org/wiki/Super-resolution_microscopy;
http://www.nobelprize.org/nobel_prizes/chemistry/laureates/2014/betzig-facts.html
(4)
http://www.bioastrum.com/home/sites/docs/Antibody-reagent-market-2012.pdf
One interesting commercial application of Affimer reagents lies
in producing multiplexed assays, which are assays that measure more
than one target at once. The degree of multiplexing in assays that
are dependent on antibodies is typically limited by the lack of
specificity of the range of antibodies required leading to
cross-reactivity. Since Affimer reagents can be selected to not
cross-react with each other, the degree of multiplexing that can be
achieved is in principle much greater. The Company has been
researching whether Affimer reagents can be used successfully in
multiplexed microarray assays for drug and biomarker discovery as
well as working with partners such as ProtATonce to develop
multiplexed assays on established platforms like Luminex. The
Affimer microarrays that have been developed show good performance
and acceptable shelf-life, and have been successfully used to
highlight proteomic differences between diseased and healthy
clinical samples. However, in their current format the microarrays
require a subsequent analysis step using mass spectrometry and this
is proving insufficiently sensitive to provide a robust assay using
currently available mass spectrometers. The underlying array
technology will be utilised in future in other product formats that
do not require mass spectrometry but in the near term the Company
does not expect significant revenues from array based products and
will focus on the nearer term opportunities and on working with
third parties, such as ProtATonce, to commercialise Affimer
reagents in multiplexed assay products.
Follow on licensing/supply deals are key to strong Affimer
reagents revenue growth in the medium term
A key element of the research reagents business model is that
some of the custom Affimer projects lead to Affimer reagents being
incorporated into third parties' products, such as diagnostic tests
or affinity purification systems, that will generate long term
recurring revenue streams from royalties and exclusivity payments.
Agreements with Agrisera (purification of plant proteins),
ProtATonce (Luminex assay development), Phoremost (drug target
discovery) and Moderna Therapeutics (mRNA therapeutics development)
were reported during the period. A number of additional long term
commercial relationships are in discussion and progress in this
important area will be reported to the market as further agreements
are put in place.
Affimer technology key benefits as a biotherapeutic platform
The success of the Affimer technology as a therapeutic platform,
and therefore the Company's ability to deliver the potential value
of a next generation of biotherapeutics, depends on the Company
continuing to demonstrate and leverage several fundamental
technical performance benefits:
-- Speed of development due to rapid generation of high affinity leads Affimers.
-- Ease of production which makes available sufficient material
to allow development to progress quickly.
-- Generation of bi- and tri-specifics and drug conjugates due to ease of modification.
-- Lack of target limitations due to no reliance on an animal's immune response.
-- Potential for topical delivery due to stability and small size.
-- Addressing "undruggable targets" due to intracellular activity.
A highly experienced team of five scientists led by Dr Amrik
Basran was established at the Stevenage Bioscience Catalyst to
spearhead the generation of a data pack that would allow the
Company to secure therapeutic licensing deals and raise funding for
infrastructure and in-house development programmes.
The in-house development progress during the period, and the
Moderna partnership, were the catalysts for a significant fund
raising which completed on 3 August 2015 and that has allowed the
Company to expand considerably its in-house Affimer therapeutics
development programme. The GBP21 million net raised will allow the
Company also to expand into new facilities in Cambridge, which it
anticipates will be ready in Spring 2016, to grow the development
team and so as to support the in-house therapeutic development
programmes and further therapeutic R&D partnerships.
The Company's key strategic objective with respect to Affimer
therapeutics is for the first candidates to enter into the clinic,
either through in-house or partnered programmes, while generating a
pipeline of therapeutic assets to be taken forwards by the Company
or licensed out. The Company has a balanced risk development plan
leveraging the Affimer technology's technical advantages to produce
best-in-class therapies in areas where the disease biology is well
understood, alongside the development of first-in-class therapies
where the development risk may be greater but the value of such
treatments may be much higher.
The two principle in-house programmes which are now being
established are:
-- Oncology - developing combination therapies combining
multiple immune checkpoint inhibitors by making bi- and
tri-specific Affimer constructs.
-- Blood clotting disorders - proof of concept data obtained in
collaboration with a clinical group at the University of Leeds led
by Dr Ramzi Ajjan indicate that Affimer therapeutics can be
generated that modulate blood clot formation with the potential for
anti-thrombotic as well as wound healing therapies.
Further details on the progress of these programmes will be
given later in the current financial year.
Research partnership with Moderna Therapeutics
(MORE TO FOLLOW) Dow Jones Newswires
October 26, 2015 03:00 ET (07:00 GMT)
During Q4 of the reporting period the first significant
therapeutic development and licensing deal was signed with Moderna
Therapeutics to use their mRNA technology to deliver Affimer
therapeutics. Under the terms of the agreement, Moderna made an
upfront payment of $500,000 which provides Moderna exclusive access
to custom Affimers reagents against certain targets which may be
extended to include additional targets by a further payment.
Moderna will also make certain payments to Avacta for research
services to deliver pre-clinical development milestones. Moderna
has the option to enter into exclusive license agreements for
selected therapeutic Affimer candidates for clinical development
and in each case Avacta will be entitled to milestone payments. The
total value of these payments could reach several tens of millions
of dollars. Avacta is also entitled to royalties in connection with
future product sales.
The Company is restricted from providing any development updates
relating to its research partnership with Moderna Therapeutics but
will make announcements as key development and commercial
milestones are achieved.
Avacta Animal Health
Algorithm based test pipeline growing
The first algorithm-based Sensitest, to assist in the diagnosis
of Canine Lymphoma, was launched early in the financial year with
strong support from key opinion leaders. Initial sales have been to
oncology specialists and veterinarians in the UK and North
America.
The next such launch is expected to be a diagnostic for Canine
Pancreatitis, helping veterinarians to diagnose the acute form of
the disease more effectively. This test is in the advanced stages
of development. Two further algorithm based tests are in early
stages of development and in each case results are expected to lead
to diagnostic performance levels exceeding those currently
available.
Assay and Affimer based test pipeline also strong
The development team has made significant progress with further
allergy tests, designed to strengthen the Company's leadership in
allergy testing, and is building a range of acute phase protein
tests to help veterinarians diagnose and monitor canine and feline
health.
Affimers represent a strong opportunity for Avacta Animal Health
to offer novel and high performing assays and the first such
project is in progress. The specificity and consistency offered by
Affimers make them ideal for use in companion animal
diagnostics.
Point of care delivery
Following the decision to cease work indefinitely on Sensipod,
the Company is in early discussions with potential partners to
enable the delivery of its Sensitest diagnostics over their point
of care instruments. The Directors believe this approach will lead
to earlier and better sales at the point of care.
Core allergy business
The Company's core allergy business was maintained with the
exception of one bulk customer which was lost late in the previous
financial year. Significant marketing and promotional efforts have
maintained customer and test numbers.
Alongside the planned expansion of allergy tests, a distribution
deal was signed to enable Avacta Animal Health to offer exclusively
a range of high quality nutraceuticals to veterinarians in the
second half of the financial year. This range addresses, amongst
other conditions, skin problems and has a clear link to core
products.
Establishment of US sales presence
In contrast to some allergy testing, which is region-specific,
most other diagnostic tests can be used equally effectively in
other territories. A small US presence has therefore been set up to
market and sell these other tests. This also permits links to US
key opinion leaders and is consequently a significant addition to
the Company's development efforts.
Trading in the first part of the current year is in line with
last year and new tests are expected to contribute materially to
next financial year's performance.
Financial Performance
The Group's results are extracted from the Operating segment
analysis (see note 2) below.
Avacta Life Sciences Avacta Animal Avacta Analytical
Health
2015 2014 2015 2014 (1) 2015 2014
GBP million GBP million GBP million GBP million GBP million GBP million
------------------------- ------------ ------------ ------------ ------------ ------------ ------------
Performance
Revenue 0.44 0.03 1.37 1.59 0.17 1.56
Gross profit 0.37 0.02 0.92 1.07 0.09 0.95
Gross margin 84% 67% 67% 67% 52% 61%
Adjusted EBITDA(2) (0.67) (0.27) (0.10) (0.01) (0.26) 0.22
Operating (loss)/profit (1.21) (0.57) (0.20) (0.28) (0.30) 0.15
Investment
Development costs 2.52 1.55 0.40 0.31 - -
Plant and equipment 0.83 0.79 0.01 0.03 - 0.03
Note 1: This business unit was sold on 11 February 2015 and the
amounts above (in respect of 2015) are the results for the 6 months
and 11 days to the date of sale.
Note 2: Excluding non-recurring administrative expenses
principally relating to impairment and amortisation of intangible
assets and share based payment charges.
Avacta Life Sciences recorded revenues of GBP0.44 million (2014
GBP0.03 million) for its custom Affimer reagents services including
GBP0.36 million from the different elements of the Moderna
Therapeutic contract.
Avacta Animal Health revenues from its existing allergy and
acute phase protein SensiTest and SensiPak products fell to GBP1.37
million (2014: GBP1.59 million). The canine lymphoma blood test
contributed GBP0.03 million (2014: GBP0.01 million) of revenue
during the first full year of operation.
Gross margins across the Group improved to 71% (2014: 67%) due
to the positive impact of the Moderna Therapeutic contract.
Underlying overhead increased significantly to GBP4.21 million
(GBP2.72 million) following the ramp up of activity during this and
the previous financial period in respect, particularly, of the
Avacta Life Sciences business unit. Non-recurring administrative
expenses, impairment and amortisation of development costs and
share based payment charges of GBP2.71 million (2014: GBP0.42
million) pushed total overhead up to GBP6.93 million (2014: GBP3.14
million).
The Group recognised GBP0.65 million (2014: GBP0.55 million) of
R&D tax credits during the year.
On 11 February 2015, the Group sold the Avacta Analytical
business unit for an initial consideration of $3.50 million
(GBP2.21 million) in cash. In addition, contingent consideration of
up to $1.5 million could be receivable depending upon future sales
performance over the five calendar years ending 31 December 2019.
The Group has not recognised any of this contingent consideration.
This sale realised a loss of GBP5.10 million in total, comprising a
small profit of GBP0.15 million against the selected assets and
liabilities sold but a pre-sale post tax loss of GBP0.30 million
and a loss of GBP4.94 million resulting from the impairment of
goodwill.
The loss retained increased to GBP9.99 million (2014: GBP1.49
million) leaving loss per share at 0.20 pence (2014: 0.04
pence).
Development expenditure capitalised during the year increased to
GBP3.11 million (2014: GBP1.86 million) through the accelerated
development of the Affimer platform where GBP2.52 million was
capitalised (2014: GBP1.55 million). GBP0.40 million (2014: GBP0.31
million) was capitalised into Avacta Animal Health but GBP2.38
million was impaired to reflect the Board's decision to cease
further investment in the Sensipod device. A further GBP1.64
million of development cost was disposed of and GBP4.94 million of
goodwill impaired as part of the sale of the Analytical business
unit. These factors resulted in net intangible assets reducing to
GBP10.36 million (2014: GBP16.29 million).
The Group's capital expenditure increased during the period to
GBP0.84 million (2014: GBP0.92 million) through the continued
investment of GBP0.83 million (2014: GBP0.79 million) in the
development and production facilities within Avacta Life
Sciences.
The Group reported cash balances of GBP7.33 million at 31 July
2015 (2014: GBP11.48 million). On 3 August 2015, the Group
completed a placing of GBP21.00 million (before expenses) at a
price of 1.25 pence per share.
Outlook
We believe that the Affimer technology has enormous potential
both as a source of novel biotherapeutics and research reagents.
These molecules possess innate attributes that suggest they could
be superior alternatives to antibodies. Our strategic mission is to
realise this potential and take a meaningful share of a very large
and growing market. We are confident that we are well positioned to
achieve this, initially through the sale of custom Affimer research
reagents and longer-term through the development, and ultimately
the commercialisation, of valuable Affimer-based drugs. We look
forward to reporting on key performance indicators of progress in
meeting these goals over the next few years.
Trevor Nicholls Alastair Smith
Chairman Chief Executive
Officer
26 October 2015 26 October 2015
(MORE TO FOLLOW) Dow Jones Newswires
October 26, 2015 03:00 ET (07:00 GMT)
Consolidated Income Statement for the year ended 31 July
2015
Restated
2015 2014
Note GBP000 GBP000
Revenue 1,813 1,618
Cost of sales (526) (527)
------------- -------------
Gross profit 1,287 1,091
Administrative expenses (6,925) (3,136)
------------- -------------
------------------------------------------------ ---- ------------- -------------
Operating loss before non-recurring items,
amortisation, impairment and share-based
payment charges (2,853) (1,624)
Non-recurring administrative expenses - (232)
Amortisation of development costs (58) -
Impairment of intangible assets (2,407) -
Share-based payment charges (249) (189)
------------------------------------------------ ---- ------------- -------------
------------- -------------
Operating loss (5,567) (2,045)
Financial income 26 24
------------- -------------
Loss before taxation from continuing operations (5,541) (2,021)
Taxation 648 551
------------- -------------
Loss after taxation (4,893) (1,470)
Loss from discontinued operations, net
of tax (5,098) (22)
------------- -------------
Loss (9,991) (1,492)
------------- -------------
Other comprehensive income
Items that will never be reclassified to
profit or loss
Share based payment charges 265 209
------------- -------------
Total comprehensive income (9,726) (1,283)
------------- -------------
Loss per ordinary share:
- Basic and diluted 4 (0.20p) (0.04p)
------------- -------------
Consolidated Balance Sheet as at 31 July 2015
2015 2014
GBP000 GBP000
Non-current assets
Intangible assets 10,360 16,289
Property, plant & equipment 1,546 1,401
------------- -------------
11,906 17,690
------------- -------------
Current assets
Inventories 333 469
Trade and other receivables 767 985
Income taxes 1,066 425
Cash and cash equivalents 7,330 11,480
------------- -------------
9,496 13,359
------------- -------------
Total assets 21,402 31,049
------------- -------------
Current liabilities
Trade and other payables (1,407) (1,390)
Contingent consideration (395) (350)
------------- -------------
(1,802) (1,740)
------------- -------------
Non-current liabilities
Contingent consideration (468) (472)
Deferred tax liabilities - -
------------- -------------
(468) (472)
------------- -------------
Total liabilities (2,270) (2,212)
------------- -------------
Net assets 19,132 28,837
------------- -------------
Equity attributable to equity
holders of the Company
Share capital 5,057 5,045
Share premium 35,756 35,747
Capital reserve 2,669 2,669
Other reserve (1,729) (1,729)
Reserve for own shares (1,590) (1,590)
Retained earnings (21,031) (11,305)
------------- -------------
Total equity 19,132 28,837
------------- -------------
Consolidated Statement of Changes in Equity for the year ended
31 July 2015
Reserve
Share Share Other Capital for own Retained Total
capital premium reserve reserve shares earnings equity
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
At 1 August
2013 3,234 22,990 (1,729) 2,669 (1,590) (10,022) 15,552
Transactions with owners of the company recognised directly
in equity
Shares issued
for cash 1,807 12,729 - - - - 14,536
Shares issued
as
consideration
for business
combinations 4 28 - - - - 32
Total comprehensive income for the period
Result for
the period - - - - - (1,492) (1,492)
Share based
payment
charges - - - - - 209 209
---------- ------------ ------------ ------------ ------------ ------------ -------------
At 31 July
2014 5,045 35,747 (1,729) 2,669 (1,590) (11,305) 28,837
Transactions with owners of the company recognised directly
in equity
Shares issued
for cash 12 9 - - - - 21
Total comprehensive income for the period
Result for
the period - - - - - (9,991) (9,991)
Share based
payment
charges - - - - - 265 265
---------- ------------ ------------ ------------ ------------ ------------ -------------
At 31 July
2015 5,057 35,756 (1,729) 2,669 (1,590) (21,031) 19,132
---------- ------------ ------------ ------------ ------------ ------------ -------------
Consolidated Statement of Cash Flows for the year ended 31 July
2015
2015 2014
GBP000 GBP000
Operating activities
Loss for the year (9,991) (1,492)
Loss on disposal and impairment of goodwill
on discontinued operations 4,793 -
Amortisation and impairment losses 2,465 171
Depreciation 518 356
Loss on disposal of property, plant and
equipment 33 -
Share based payment charges to employees 265 209
Net finance income (26) (24)
Income tax credit (648) (551)
------------- -------------
Operating cash outflow before changes
in working capital (2,591) (1,331)
Movement in inventories (210) (89)
Movement in trade and other receivables 197 -
Movement in trade and other payables 56 142
------------- -------------
Operating cash outflow from operations (2,548) (1,278)
Finance income received 26 24
Income tax received 7 416
(MORE TO FOLLOW) Dow Jones Newswires
October 26, 2015 03:00 ET (07:00 GMT)
------------- -------------
Net cash flow from operating activities (2,515) (838)
------------- -------------
Investing activities
Purchase of plant and equipment (806) (922)
Purchase of intangible assets - (17)
Development expenditure capitalised (3,060) (1,861)
Disposal of discontinued operations 2,210 -
------------- -------------
Net cash flow from investing activities (1,656) (2,800)
------------- -------------
Financing activities
Proceeds from issue of shares 21 14,536
------------- -------------
Net cash flow from financing activities 21 14,536
------------- -------------
Net increase in cash and cash equivalents (4,150) 10,898
Cash and cash equivalents at the beginning
of the year 11,480 582
------------- -------------
Cash and cash equivalents at the end of
the year 7,330 11,480
------------- -------------
Notes
1. These preliminary results have been prepared on the basis of
the accounting policies which are to be set out in Avacta Group
plc's annual report and financial statements for the year ended 31
July 2015.
The consolidated financial statements of the Group for the year
ended 31 July 2015 were prepared in accordance with International
Financial Reporting Standards ("IFRSs") as adopted for use in the
EU ("adopted IFRSs") and applicable law.
The financial information set out above does not constitute the
Company's statutory financial statements for the years ended 31
July 2015 or 2014 but is derived from those financial statements.
Statutory financial statements for 2014 have been delivered to the
Registrar of Companies and distributed to shareholders, and those
for 2015 will be respectively delivered and distributed on or
before 31 December 2015. The auditors have reported on those
financial statements and their reports were:
(i) unqualified;
(ii) did not include a reference to any matters to which the
auditors drew attention by way of emphasis without qualifying their
report; and
(iii) did not contain a statement under section 498(2) or (3) of
the Companies Act 2006 in respect of the financial statements for
2014 or 2015.
2. Basis of preparation
The Group financial statements have been prepared and approved
by the Directors in accordance with International Financial
Reporting Standards as adopted by the European Union (IFRS).
The preparation of financial statements in conformity with IFRS
requires management to make judgments, estimates and assumptions
that affect the application of policies and reported amounts of
assets and liabilities, income and expenses. The estimates and
associated assumptions are based on historical experience and
various other factors that are believed to be reasonable under the
circumstances, the results of which form the basis of making the
judgments about carrying values of assets and liabilities that are
not readily apparent from other sources. Actual results may differ
from these estimates.
The estimates and underlying assumptions are reviewed on an
ongoing basis. Revisions to accounting estimates are recognised in
the period in which the estimate is revised if the revision affects
only that period or in the period of the revision and future
periods if the revision affects both current and future
periods.
The Group's activities, together with the factors likely to
affect its future development, performance and position are set out
in the Chairman's and Chief Executive Officer's Report. The
financial position of the Group, its financial performance and its
cash flows and liquidity position are described there also and
within the financial statements presented.
The financial statements have been prepared on a going concern
basis. The current economic conditions create uncertainty
particularly over the level of demand for the Group's products and
over the availability of finance which the Directors are mindful
of. In addition, the Group has incurred significant losses over the
last few years of which a substantial element is in cash.
The Financial Reporting Council issued "Going Concern and
Liquidity Risk: Guidance for Directors of UK Companies" in 2009,
and the Directors have considered this when preparing these
financial statements. These have been prepared on a going concern
basis, notwithstanding the loss for the period ended 31 July 2015.
The Directors have taken steps to ensure that they believe the
going concern basis of preparation remains appropriate, and that
the carrying value of intangibles remains supported by future cash
flows. The key conclusions are summarised below.
- The Group is at a critical point in its development as it
seeks to launch the Affimer suite of products and services. These
are expected to generate significant revenues for the Group over
the coming years, aiding both profitability and cash flows.
- The Group has, in the past, taken a significant amount of
annualised costs out of the business and will continue to take all
appropriate steps to manage its cost base in light of any
deviations from the forecast sales levels.
- The Group raised GBP21.0 million net through a placing of its
shares on 3 August 2015.
- The Directors have prepared sensitised cash flow forecasts
extending to the end of the financial year ended 31 July 2018.
These show that the Group has sufficient funds available to meet
its obligations as they fall due over that period.
- The Group's year to date financial performance is materially
in line with this budget cumulatively.
- The Directors are not aware of any evidence to suggest that
the budgeted improvement in the level of performance over the short
term future will not be realised although the Directors recognise
that it is possible that a worsening of performance could become
evident, at which point they would act accordingly to mitigate the
impact of such a worsening. The action may include cost reduction
strategies, curtailed capital expenditure programs or equity
issues.
- The Group does not have external borrowings or any covenants
based on financial performance.
- The Directors have considered the position of the individual
trading companies in the group to ensure that these companies are
also in a position to continue to meet their obligations as they
fall due.
- The markets in which the business operates are not considered
to be at significant risk due to the ongoing global economic
recession.
- There are not believed to be any contingent liabilities which
could result in a significant impact on the business if they were
to crystallise.
Following this assessment, the Directors have reasonable
expectation that the Group has adequate resources to continue for
the foreseeable future and that carrying values of intangible
assets are supported. Thus, they continue to adopt the going
concern basis of accounting in preparing these financial
statements.
3. Segmental reporting
Operating segment analysis 2015
Animal Life
Health Sciences Total
GBP000 GBP000 GBP000
Sale of goods 706 - 706
Provision of services 668 82 750
Licence related income - 357 357
------------- ------------- -------------
Revenue 1,374 439 1,813
Cost of goods sold (452) (74) (526)
------------- ------------- ------------
Gross profit 922 365 1,287
Depreciation (64) (363) (427)
Other operating expenses (1,019) (1,040) (2,059)
------------- ------------- ------------
Operating loss before impairment
charges, amortisation and share-based
payment charges (161) (1,038) (1,199)
Amortisation - (57) (57)
Share-based payment charges (41) (119) (160)
------------- ------------- ------------
Segment operating loss (202) (1,214) (1,416)
Corporate and other unallocated items ------------- ------------- (1,744)
Impairment and amortisation of development
costs (2,407)
------------
Operating loss (5,567)
Finance income 26
Finance expenses -
------------
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