TIDMNPH
RNS Number : 9559O
Neuropharm Group PLC
17 March 2009
?
+------------------------------------------+------------------------------------+
| For immediate release | 17 March 2009 |
+------------------------------------------+------------------------------------+
Neuropharm Group Plc
("Neuropharm" or "the Company")
Half-year results for the six months ended 31 December 2008
Neuropharm Group plc (AIM: NPH), a specialty pharmaceutical company focused on
developmental disorders, is pleased to announce its half-year results for the
six months ended 31 December 2008.
Key points in the year to date
* Detailed review of the NPL-2008 programme underway after headline Phase III
SOFIA study results announced on 18 February 2009
* Formulation development, scale up work and demonstration of bio-equivalence with
NPL-2008 was completed in H2 2008
* Positive results from Phase IIa study of NPL-2009 in Fragile X Syndrome with
publication in a peer-reviewed journal
* Positive results from Phase IIa study of NPL-2005 in Fragile X Syndrome
* Patent filing in connection with NPL-2003 in Obsessive Compulsive Disorder
* Cash, cash equivalents and money market investments of GBP10.2 million at 31
December 2008 (30 June 2008: GBP12.7 million) For further information please contact:
+-----------------------------------------------+---------------------------------+
| Neuropharm | + 44 (0) 1372 371 171 |
+-----------------------------------------------+---------------------------------+
| Robert Mansfield, Chief Executive Officer | |
| Graham Yeatman, Chief Financial Officer | |
+-----------------------------------------------+---------------------------------+
| | |
+-----------------------------------------------+---------------------------------+
| Piper Jaffray Ltd. | + 44 (0) 20 3142 8700 |
+-----------------------------------------------+---------------------------------+
| Neil Mackison, Rupert Winckler | |
+-----------------------------------------------+---------------------------------+
| | |
+-----------------------------------------------+---------------------------------+
| Buchanan Communications | + 44 (0) 20 7466 5000 |
+-----------------------------------------------+---------------------------------+
| Mark Court, Mary-Jane Johnson, Catherine | |
| Breen | |
+-----------------------------------------------+---------------------------------+
Notes to Editors:
About Neuropharm
Neuropharm is a speciality pharmaceutical company focused on improving patient
lives by delivering medicines for high unmet needs in the treatment and
management of neurodevelopmental disorders. Please visit www.neuropharm.co.uk
for further information.
JOINT STATEMENT FROM THE CHAIRMAN AND CHIEF EXECUTIVE OFFICER
The six months ended 31 December 2008 saw a period of intense activity during
which we focused on the completion of the Phase III SOFIA study of NPL-2008 in
Autistic Disorder and on planning the next steps for our programmes in Fragile X
Syndrome and Paediatric Obsessive Compulsive Disorder.
On 18 February 2009 we announced that the SOFIA study had not met its primary
endpoint of providing a statistically significant reduction in repetitive
behaviours in patients with Autistic Disorder, but confirmed the compound's
safety profile. The results showed that repetitive behaviours were reduced in
both the NPL-2008 and placebo treatment groups. Further analysis and review of
the data from the primary endpoint and the secondary endpoints of the trial are
underway. It is expected that this analysis will provide the key information to
inform our future decisions on NPL-2008. It is our intention to update
shareholders on our strategy for NPL-2008 following completion of this analysis.
Since flotation on AIM in March 2007, when we raised GBP18.2 million (net), we
have exercised careful cost control. As noted in our 2008 Annual Report, our
virtual model enables us to have a low fixed cost base and keep variable costs
tightly controlled, with decisions regarding investment in our programmes and
development of our US organization dependent on regular review by the Board. We
have ensured that the costs of our US organization, and pre-launch marketing of
NPL-2008, were kept to a minimum pending the SOFIA result. As a result, at 31
December 2008 we had cash of GBP10.2 million. Following the results of the
SOFIA study, we have implemented a cost reduction programme to preserve cash
pending decisions on future strategy.
NPL-2008: Autistic Disorder
Autistic Disorder is a debilitating and highly underserved condition for which
treatment using fluoxetine has been documented by medical researchers and
prescribed in everyday clinical practice. Fluoxetine is the generic name for
the Selective Serotonin Reuptake Inhibitor (SSRI) Prozac(TM), a treatment that
has been widely used for the treatment of depression in children, adolescents
and adults, and which was first launched in the US in 1986 by Eli Lilly and Co.
Fluoxetine is the only compound in its class to be approved for the treatment of
depression and obsessive compulsive disorder in the US and Europe. NPL-2008 is
bio-equivalent to Prozac(TM). In 1996, Professor Eric Hollander at Mount Sinai
School of Medicine in New York was granted an IND (Investigational New Drug) to
investigate the use of fluoxetine in the treatment of autism. Between 1998 and
2005, Professor Hollander conducted a Phase II and a Phase III trial, funded by
FDA's Office of Orphan Product Development, which highlighted the potential of
the drug in treating Autistic Disorder in children, adolescents and adults, and
FDA granted the drug Orphan Drug Designation in the US in 1999. Following a
period of collaboration, in December 2006 Neuropharm purchased from Mount Sinai
School of Medicine the rights to the clinical data, Orphan Drug Designation and
IND relating to the use of fluoxetine in the treatment of autism.
NPL-2008 is our novel, low-dose form of fluoxetine, which has been specially
designed for the treatment of paediatric patients and of Autistic Disorder in
both children and adults. It uses the rapid-melt Zydis drug delivery
technology and is taste-masked to encourage compliance by children with Autistic
Disorder. Neuropharm has developed three low-dose strengths of NPL-2008 -
2mg, 9mg and 18mg - which can be used in combination to create a wide range of
doses to allow precise titration to identify the individualised dose required by
each patient. In September 2008 the Company announced the commencement of a
Rolling NDA submission to FDA for regulatory marketing approval. Neuropharm, in
conjunction with its partner Catalent, completed formulation development work,
scale up and demonstrated bio-equivalence of NPL-2008 on schedule in the second
half of 2008. Completion of Chemistry, Manufacturing and Control data allowed
the initiation of a Rolling NDA with FDA in September of 2008.
Following its IPO on AIM in 2007, Neuropharm started recruitment for the
SOFIA study. The SOFIA study was carried out in association with Autism Speaks'
Autism Clinical Trials Network and involved 19 specialist sites across the US
and was the largest study ever conducted in individuals with Autistic Disorder.
A total of 158 patients, aged between 5 and 17, were enrolled into the SOFIA
study in which patients received either NPL-2008 or placebo during a 14 week
treatment period. The study was modelled on, and intended to expand upon, a
previous positive study conducted at Mount Sinai School of Medicine in New York.
The primary endpoint of both of these studies was the reduction in the
Children's Yale-Brown Obsessive Compulsive Scale - Modified for Pervasive
Developmental Disorders (CYBOCS-PDD) measure of repetitive behaviours as
analysed at the end of treatment. The use of this scale as the primary outcome
measure was agreed upon with FDA during FDA's Special Protocol Assessment of
SOFIA.
On 18 February 2009 we announced that the SOFIA study had not met its primary
endpoint of a statistical reduction in repetitive behaviours and that compared
with the previously successful trial the results were both unexpected and
disappointing. NPL-2008 was generally well tolerated by patients in the SOFIA
study and no serious adverse events were reported. The effect of
NPL-2008 treatment in the SOFIA study in February 2009 was in line with results
seen after fluoxetine treatment in the previous study in children and
adolescents conducted at Mount Sinai School of Medicine in New York. However,
in the SOFIA study the placebo effect was markedly higher than in the Mount
Sinai study and, accordingly, no statistically significant difference was
observed on the primary endpoint between the active and placebo treatment
groups. Potential explanations of this difference in placebo effect are being
researched and may relate to variation in trial design between the studies.
Meanwhile, the results of the SOFIA trial are being written up and the follow on
study known as EMMA is currently being wound down at the sites in the US. The
review of the data is ongoing and we are consulting with experts in the field,
regulatory advisers and other interested parties to determine what the future
strategy for this programme should be.
NPL-2005 & NPL-2009: Fragile X Syndrome
We reported significant progress during the period in our two programmes in
Fragile X Syndrome, a condition caused by a mutation in the X chromosome that
affects approximately 1 in every 3,800 male children and approximately 1 in
every 8,000 female children. The FMR1 gene on the affected part of the
chromosome shuts down and is unable to produce a protein needed by the brain for
normal brain functioning. The condition, thought to be the most common cause of
inherited intellectual disability, is the focus of considerable interest from
medical, scientific and patient communities because the genetics and proteomics
of the condition are fully understood, suggesting that successful treatment
should be achievable.
Neuropharm has Orphan Drug Designation from FDA's Office of Orphan Product
Development for its two potentially complementary programmes in Fragile X,
NPL-2005 and NPL-2009. At the National Fragile X Foundation's 11th
International Fragile X Conference in St Louis, Missouri, in July 2008, positive
results were presented from Phase IIa studies of both compounds.
The clinical investigators in the study of NPL-2005, which is based on the
existing anti-convulsant compound valproate, concluded that the compound could
be effective in the treatment of Attention Deficit Hyperactivity Disorder (ADHD)
(behavioural) like symptoms in young males with Fragile X Syndrome.
The positive results from the Phase IIa study of NPL-2009, which is based on the
existing mGluR5 antagonist fenobam, were also presented at the St Louis
conference and later published in the peer-reviewed Journal of Medical Genetics
at the beginning of 2009. The results are believed to mark the first time that
the effects of a potential targeted treatment have been observed in patients
with Fragile X Syndrome. The data obtained from this study suggested that
NPL-2009 was well tolerated after an initial dose and that a positive effect was
seen on a surrogate assessment of brain function.
We have initiated work to identify an appropriate formulation of NPL-2009 for
use in further clinical studies. We have also initiated a business development
strategy for seeking a co-development partner with a novel proprietary
formulation of NPL-2005 relevant to the Fragile X Syndrome population.
NPL-2003: Paediatric Obsessive Compulsive Disorder
In August 2007 Neuropharm began an initial open-label Phase II clinical
evaluation of NPL-2003, an existing marketed product that the Company believes
could be of benefit to patients with Obsessive Compulsive Disorder (OCD). The
evaluation is being carried out at two university hospitals in the US. We have
filed a patent application in connection with NPL-2003 and the data is currently
being submitted for publication. We anticipate updating shareholders on the
clinical studies and future development of the product in H2 2009.
Paediatric patients with OCD display two principal features: repeated
(obsessional) thoughts of a severely anxious nature and, in an attempt to
reverse the obsessional anxieties, repeated ineffectual (compulsive) behaviour
or thoughts, such as repeated hand-washing. Depression, social phobia and
substance abuse rates are higher in these patients than in the general
population.
Outlook
Our corporate strategy has been to build a profitable business by focusing on
the development of products targeting neurodevelopmental disorders for which few
or no existing approved treatments exist, and which represent niche markets with
defined patient populations. At the time of the IPO in March 2007, the Company
articulated to shareholders its strategy of completing clinical development of
NPL-2008 and the associated regulatory submissions, including conducting
pharmaceutical development, bioequivalence studies and a key opinion leader
study in centres of excellence. The Company has met these key objectives on
NPL-2008 within the original timeframe. The detailed analysis and review of the
NPL-2008 programme is already underway and will provide the information required
to determine the future strategic alternatives for this programme and for the
Company. Following third party interest, one option of significant potential
interest is to partner with a much larger pharmaceutical company to bring
funding into the Company to finance the next stages of development.
During the half year we have made significant progress with our other programmes
and over the next few months we will assess the opportunities for maximising
these other opportunities within the portfolio.
The Company has continued to manage its cash resources and spending in line with
the Board's expectations. Spending has been managed tightly and at 31 December
2008 the Company had cash of GBP10.2 million. The Company has acted promptly to
reduce significantly the burn rate ahead of updating shareholders on our
decisions on future strategy.
The Directors have felt it appropriate to impair in full the value of the
intangible asset and the tooling equipment in relation to NPL-2008, since until
the analysis of future strategy is complete there remains uncertainty (see notes
6 and 7).In recognition of the Company's cash of GBP10.2 million, and the early
stage of review of the Company's future corporate strategy, the Directors have
determined that it is appropriate to prepare the condensed consolidated
financial statements for the six months ended 31 December 2008 on a going
concern basis (see note 1).
Dr Graeme M Hart Robert G Mansfield
ChairmanChief Executive Officer
16 March 2009
Neuropharm Group plc
Consolidated Income Statement
Six months ended 31 December 2008
+--------------------------------------------+------+-+----------+----------+----------+
| |Note | | Six | Six | Year |
| | | | months | months | ended 30 |
| | | | ended 31 | ended 31 | June |
| | | | Dec 2008 | Dec 2007 | 2008 |
| | | | GBP'000 | GBP'000 | GBP'000 |
+--------------------------------------------+------+-+----------+----------+----------+
| | | | | | |
+--------------------------------------------+------+-+----------+----------+----------+
| | | | | | |
+--------------------------------------------+------+-+----------+----------+----------+
| | | | | | |
+--------------------------------------------+------+-+----------+----------+----------+
| Research and development expenses | | | (2,262) | (1,315) | (3,000) |
+--------------------------------------------+------+-+----------+----------+----------+
| | | | | | |
+--------------------------------------------+------+-+----------+----------+----------+
| | | | | | |
+--------------------------------------------+------+-+----------+----------+----------+
| Selling, marketing and distribution | | | (246) | - | (132) |
| costs | | | | | |
+--------------------------------------------+------+-+----------+----------+----------+
| | | | | | |
+--------------------------------------------+------+-+----------+----------+----------+
| | | | | | |
+--------------------------------------------+------+-+----------+----------+----------+
| Other management and administration | | | (1,553) | (961) | (2,605) |
| expenses | | | | | |
+--------------------------------------------+------+-+----------+----------+----------+
| Movement on provision for National | | | 45 | (2) | 4 |
| Insurance on share options | | | | | |
+--------------------------------------------+------+-+----------+----------+----------+
| Share option expense | | | (308) | (74) | (147) |
+--------------------------------------------+------+-+----------+----------+----------+
| Impairment charge | 6,7 | | (189) | - | - |
+--------------------------------------------+------+-+----------+----------+----------+
| | | | | | |
+--------------------------------------------+------+-+----------+----------+----------+
| Total management and administration | | | (2,005) | (1,037) | (2,748) |
| expenses | | | | | |
+--------------------------------------------+------+-+----------+----------+----------+
| | | | | | |
+--------------------------------------------+------+-+----------+----------+----------+
| Operating loss | | | (4,513) | (2,352) | (5,880) |
+--------------------------------------------+------+-+----------+----------+----------+
| | | | | | |
+--------------------------------------------+------+-+----------+----------+----------+
| Investment income | | | 305 | 482 | 881 |
+--------------------------------------------+------+-+----------+----------+----------+
| Other gains and losses | 4 | | 719 | 42 | 54 |
+--------------------------------------------+------+-+----------+----------+----------+
| | | | | | |
+--------------------------------------------+------+-+----------+----------+----------+
| Loss on ordinary activities before | | | (3,489) | (1,828) | (4,945) |
| tax | | | | | |
+--------------------------------------------+------+-+----------+----------+----------+
| | | | | | |
+--------------------------------------------+------+-+----------+----------+----------+
| Taxation | | | 31 | 175 | 754 |
+--------------------------------------------+------+-+----------+----------+----------+
| | | | | | |
+--------------------------------------------+------+-+----------+----------+----------+
| Loss for the period | | | (3,458) | (1,653) | (4,191) |
+--------------------------------------------+------+-+----------+----------+----------+
| | | | | | |
+--------------------------------------------+------+-+----------+----------+----------+
| | | | | | |
+--------------------------------------------+------+-+----------+----------+----------+
| | | | | | |
+--------------------------------------------+------+-+----------+----------+----------+
| Loss per share | | | | | |
+--------------------------------------------+------+-+----------+----------+----------+
| Basic and diluted | 5 | | (11.0)p | (5.2)p | (13.3)p |
+--------------------------------------------+------+-+----------+----------+----------+
| | | | | | |
+--------------------------------------------+------+-+----------+----------+----------+
All results derive from continuing operations.
Neuropharm Group plc
Consolidated Statement of Changes in Equity
Six months ended 31 December 2008
+-------------------+----------+----------+----------+--------------+----------+----------+
| | Called | Share | Other | Share-based | Retained | Total |
| | up share | premium | reserve | compensation | loss | GBP'000 |
| | capital | account | GBP'000 | GBP'000 | GBP'000 | |
| | GBP'000 | GBP'000 | | | | |
+-------------------+----------+----------+----------+--------------+----------+----------+
| | | | | | | |
+-------------------+----------+----------+----------+--------------+----------+----------+
| At 30 June | 3,154 | 17,313 | (651) | 485 | (3,599) | 16,702 |
| 2007 | | | | | | |
+-------------------+----------+----------+----------+--------------+----------+----------+
| | | | | | | |
+-------------------+----------+----------+----------+--------------+----------+----------+
| Share option | - | - | - | 74 | - | 74 |
| expense | | | | | | |
+-------------------+----------+----------+----------+--------------+----------+----------+
| Reserve | - | (44) | 44 | - | - | - |
| transfer | | | | | | |
+-------------------+----------+----------+----------+--------------+----------+----------+
| Loss for | - | - | - | - | (1,653) | (1,653) |
| the period | | | | | | |
+-------------------+----------+----------+----------+--------------+----------+----------+
| | | | | | | |
+-------------------+----------+----------+----------+--------------+----------+----------+
| At 31 | 3,154 | 17,269 | (607) | 559 | (5,252) | 15,123 |
| December | | | | | | |
| 2007 | | | | | | |
+-------------------+----------+----------+----------+--------------+----------+----------+
| | | | | | | |
+-------------------+----------+----------+----------+--------------+----------+----------+
| Share | - | - | - | 73 | - | 73 |
| option | | | | | | |
| expense | | | | | | |
+-------------------+----------+----------+----------+--------------+----------+----------+
| Loss for | - | - | - | - | (2,538) | (2,538) |
| the period | | | | | | |
+-------------------+----------+----------+----------+--------------+----------+----------+
| | | | | | | |
+-------------------+----------+----------+----------+--------------+----------+----------+
| At 30 June | 3,154 | 17,269 | (607) | 632 | (7,790) | 12,658 |
| 2008 | | | | | | |
+-------------------+----------+----------+----------+--------------+----------+----------+
| | | | | | | |
+-------------------+----------+----------+----------+--------------+----------+----------+
| Share | - | - | - | 308 | - | 308 |
| option | | | | | | |
| expense | | | | | | |
+-------------------+----------+----------+----------+--------------+----------+----------+
| Loss for | - | - | - | - | (3,458) | (3,458) |
| the period | | | | | | |
+-------------------+----------+----------+----------+--------------+----------+----------+
| | | | | | | |
+-------------------+----------+----------+----------+--------------+----------+----------+
| At 31 | 3,154 | 17,269 | (607) | 940 | (11,248) | 9,508 |
| December | | | | | | |
| 2008 | | | | | | |
+-------------------+----------+----------+----------+--------------+----------+----------+
| | | | | | | |
+-------------------+----------+----------+----------+--------------+----------+----------+
Neuropharm Group plc
Consolidated Balance Sheet
31 December 2008
+------------------------------------------+------+---+----------+----------+----------+
| |Note | | 31 Dec | 31 Dec | 30 June |
| | | | 2008 | 2007 | 2008 |
| | | | GBP'000 | GBP'000 | GBP'000 |
+------------------------------------------+------+---+----------+----------+----------+
| | | | | | |
+------------------------------------------+------+---+----------+----------+----------+
| Non-current assets | | | | | |
+------------------------------------------+------+---+----------+----------+----------+
| Intangible assets | 6 | | - | 45 | 42 |
+------------------------------------------+------+---+----------+----------+----------+
| Property, plant and equipment | 7 | | 16 | 15 | 181 |
+------------------------------------------+------+---+----------+----------+----------+
| | | | | | |
+------------------------------------------+------+---+----------+----------+----------+
| | | | 16 | 60 | 223 |
+------------------------------------------+------+---+----------+----------+----------+
| | | | | | |
+------------------------------------------+------+---+----------+----------+----------+
| Current assets | | | | | |
+------------------------------------------+------+---+----------+----------+----------+
| Accrued income and margin | | | 180 | 754 | 472 |
| deposits | | | | | |
+------------------------------------------+------+---+----------+----------+----------+
| Trade and other receivables | | | 182 | 133 | 232 |
+------------------------------------------+------+---+----------+----------+----------+
| Derivative financial instruments | | | 150 | 49 | 2 |
+------------------------------------------+------+---+----------+----------+----------+
| Research and development tax credits receivable | | - | 175 | 500 |
+-------------------------------------------------+---+----------+----------+----------+
| Money market investments | | | 6,500 | 12,000 | 9,510 |
+------------------------------------------+------+---+----------+----------+----------+
| Cash and cash equivalents | | | 3,676 | 2,671 | 3,148 |
+------------------------------------------+------+---+----------+----------+----------+
| | | | | | |
+------------------------------------------+------+---+----------+----------+----------+
| | | | 10,688 | 15,782 | 13,864 |
+------------------------------------------+------+---+----------+----------+----------+
| | | | | | |
+------------------------------------------+------+---+----------+----------+----------+
| Current liabilities | | | | | |
+------------------------------------------+------+---+----------+----------+----------+
| Trade and other payables | | | (1,144) | (616) | (1,332) |
+------------------------------------------+------+---+----------+----------+----------+
| | | | | | |
+------------------------------------------+------+---+----------+----------+----------+
| Net current assets | | | 9,544 | 15,166 | 12,532 |
+------------------------------------------+------+---+----------+----------+----------+
| | | | | | |
+------------------------------------------+------+---+----------+----------+----------+
| Total assets less current | | | 9,560 | 15,226 | 12,755 |
| liabilities | | | | | |
+------------------------------------------+------+---+----------+----------+----------+
| | | | | | |
+------------------------------------------+------+---+----------+----------+----------+
| Non-current liabilities | | | | | |
+------------------------------------------+------+---+----------+----------+----------+
| Long-term provisions | | | (52) | (103) | (97) |
+------------------------------------------+------+---+----------+----------+----------+
| | | | | | |
+------------------------------------------+------+---+----------+----------+----------+
| Net assets | | | 9,508 | 15,123 | 12,658 |
+------------------------------------------+------+---+----------+----------+----------+
| | | | | | |
+------------------------------------------+------+---+----------+----------+----------+
| | | | | | |
+------------------------------------------+------+---+----------+----------+----------+
| Equity | | | | | |
+------------------------------------------+------+---+----------+----------+----------+
| Share capital | | | 3,154 | 3,154 | 3,154 |
+------------------------------------------+------+---+----------+----------+----------+
| Share premium account | | | 17,269 | 17,269 | 17,269 |
+------------------------------------------+------+---+----------+----------+----------+
| Other reserve | | | (607) | (607) | (607) |
+------------------------------------------+------+---+----------+----------+----------+
| Retained loss | | | (11,248) | (5,252) | (7,790) |
+------------------------------------------+------+---+----------+----------+----------+
| Share-based compensation | | | 940 | 559 | 632 |
+------------------------------------------+------+---+----------+----------+----------+
| | | | | | |
+------------------------------------------+------+---+----------+----------+----------+
| Total equity | | | 9,508 | 15,123 | 12,658 |
+------------------------------------------+------+---+----------+----------+----------+
| | | | | | |
+------------------------------------------+------+---+----------+----------+----------+
The financial statements were approved by the board of directors and authorised
for issue on 16 March 2009. They were signed on its behalf by:
Graham E Yeatman
Chief Financial Officer
16 March 2009
Neuropharm Group plc
Consolidated Cash Flow Statement
Six months ended 31 December 2008
+------------------------------------------+--------+----------+----------+----------+
| | Note | Six | Six | Year |
| | | months | months | ended 30 |
| | | ended 31 | ended 31 | June |
| | | Dec 2008 | Dec 2007 | 2008 |
| | | GBP'000 | GBP'000 | GBP'000 |
+------------------------------------------+--------+----------+----------+----------+
| | | | | |
+------------------------------------------+--------+----------+----------+----------+
| Net cash used in operations | 8 | (4,032) | (3,498) | (6,003) |
+------------------------------------------+--------+----------+----------+----------+
| | | | | |
+------------------------------------------+--------+----------+----------+----------+
| Research and development tax | | 531 | - | 260 |
| credit received | | | | |
+------------------------------------------+--------+----------+----------+----------+
| | | | | |
+------------------------------------------+--------+----------+----------+----------+
| Net cash used in operating | | (3,501) | (3,498) | (5,743) |
| activities | | | | |
+------------------------------------------+--------+----------+----------+----------+
| | | | | |
+------------------------------------------+--------+----------+----------+----------+
| Investing activities | | | | |
+------------------------------------------+--------+----------+----------+----------+
| Interest received | | 305 | 482 | 881 |
+------------------------------------------+--------+----------+----------+----------+
| Proceeds from money market | | 3,010 | 5 | 2,495 |
| investments | | | | |
+------------------------------------------+--------+----------+----------+----------+
| Purchases of property, plant and | | (5) | (6) | (185) |
| equipment | | | | |
+------------------------------------------+--------+----------+----------+----------+
| | | | | |
+------------------------------------------+--------+----------+----------+----------+
| Net cash from investing | | 3,310 | 481 | 3,191 |
| activities | | | | |
+------------------------------------------+--------+----------+----------+----------+
| | | | | |
+------------------------------------------+--------+----------+----------+----------+
| Net decrease in cash and cash | | (191) | (3,017) | (2,552) |
| equivalents | | | | |
+------------------------------------------+--------+----------+----------+----------+
| | | | | |
+------------------------------------------+--------+----------+----------+----------+
| Cash and cash equivalents at | | 3,148 | 5,646 | 5,646 |
| beginning of period | | | | |
+------------------------------------------+--------+----------+----------+----------+
| Effect of foreign exchange rate | 4 | 719 | 42 | 54 |
| changes | | | | |
+------------------------------------------+--------+----------+----------+----------+
| | | | | |
+------------------------------------------+--------+----------+----------+----------+
| Cash and cash equivalents at end | | 3,676 | 2,671 | 3,148 |
| of period | | | | |
+------------------------------------------+--------+----------+----------+----------+
| | | | | |
+------------------------------------------+--------+----------+----------+----------+
Neuropharm Group plc
Notes to the condensed consolidated financial statements
Six months ended 31 December 2008
1. BASIS OF PREPARATION
This condensed half-year financial information was approved by the Board on 16
March 2009 and does not constitute statutory financial information within the
meaning of Section 240 of the Companies Act 1985. A copy of the statutory
accounts for the year ended 30 June 2008 has been delivered to the Registrar of
Companies. The auditors' report on those accounts was not qualified and did not
contain statements under Section 237(2) or (3) of the Companies Act 1985.
Results for the six month periods ended 31 December 2007 and 31 December 2008
have not been audited.
The half-year results for the six months ended 30 June 2008 can be found on the
Company's website at www.neuropharm.co.uk. The half-year results are not being
sent to shareholders.
As at 31 December 2008 the Company and Group had cash, cash equivalents and
money market investments of approximately GBP10.2 million (30 June 2008: GBP12.7
million).
As described in the Joint Statement from the Chairman and Chief Executive
Officer, on 18 February 2009 the Company announced that the SOFIA study had not
met its primary endpoint. Further analysis and review of the data is underway
which will inform the Directors' decisions on the future strategic alternatives
for NPL-2008 and for the Company. Until such analysis is complete, there remains
uncertainty.
In recognition of the Company's cash of GBP10.2 million at 31 December 2008, and
the early stage of review of the Company's future corporate strategy, the
Directors have a reasonable expectation that the Company and Group will have
adequate cash resources to continue to meet the requirements of the business for
at least the next 12 months. The Directors have, therefore, adopted the going
concern basis in preparing the financial statements.
2. SIGNIFICANT ACCOUNTING POLICIES
The significant accounting policies adopted in the preparation of the condensed
financial statements and methods of computation are consistent with those
intended to be used in the preparation of the Group's financial statements for
the year ended 30 June 2009 which will be are prepared in accordance with IFRS
as adopted by the European Union.
3. BUSINESS AND GEOGRAPHICAL SEGMENTS
The Directors consider there to be one business segment for reporting purposes
as the Group conducts one business activity and operates primarily from the
United Kingdom, where the majority of net assets are located. The loss on
ordinary activities before taxation derives from the Group's principal activity
in the United Kingdom, being the discovery, development and commercialisation of
medicines for the treatment and management of neurodevelopmental disorders.
4. OTHER GAINS AND LOSSES
+---------------------------------------------------+----------+----------+----------+
| | Six | Six | Year |
| | months | months | ended 30 |
| | ended 31 | ended 31 | June |
| | Dec 2008 | Dec 2007 | 2008 |
| | GBP'000 | GBP'000 | GBP'000 |
+---------------------------------------------------+----------+----------+----------+
| | | | |
+---------------------------------------------------+----------+----------+----------+
| Gain / (loss) | 530 | (7) | 1 |
| on foreign | | | |
| exchange | | | |
| transactions | | | |
| and balances | | | |
+---------------------------------------------------+----------+----------+----------+
| Gain on | 189 | 49 | 53 |
| forward | | | |
| foreign | | | |
| currency | | | |
| contracts | | | |
+---------------------------------------------------+----------+----------+----------+
| | | | |
+---------------------------------------------------+----------+----------+----------+
| | 719 | 42 | 54 |
+---------------------------------------------------+----------+----------+----------+
| | | | |
+---------------------------------------------------+----------+----------+----------+
5. LOSS PER SHARE
Basic loss per share is calculated by dividing the earnings attributable to
ordinary shareholders by the weighted average number of ordinary shares
outstanding during the half-year.
As at the period end there were outstanding options over 4,831,485 ordinary
shares (six months ended 31 December 2007: 5,037,011 ordinary shares; year ended
30 June 2008: 5,432,011 ordinary shares) in the Company.
IAS 33 "Earnings per Share" requires presentation of diluted earnings per share
when a company could be called upon to issue shares that would decrease net
profit or increase net loss per share. Only options that are 'in the money' are
treated as dilutive and net loss per share would not be increased by the
exercise of these options. Therefore no adjustment has been made to dilute loss
per share for any outstanding share options.
The calculation of the basic and diluted loss per share is based on the
following data:
+---------------------------------------------------+------------+------------+------------+
| | Six | Six | Year |
| | months | months | ended 30 |
| | ended 31 | ended 31 | June |
| | Dec 2008 | Dec 2007 | 2008 |
| | GBP'000 | GBP'000 | GBP'000 |
+---------------------------------------------------+------------+------------+------------+
| Loss | | | |
+---------------------------------------------------+------------+------------+------------+
| Loss for the | 3,458 | 1,653 | 4,191 |
| purposes of | | | |
| basic and | | | |
| diluted loss | | | |
| per share | | | |
| being net loss | | | |
| attributable | | | |
| to equity | | | |
| holders of the | | | |
| parent | | | |
+---------------------------------------------------+------------+------------+------------+
| | | | |
+---------------------------------------------------+------------+------------+------------+
| | Number | Number | Number |
+---------------------------------------------------+------------+------------+------------+
| Number of | | | |
| shares | | | |
+---------------------------------------------------+------------+------------+------------+
| Weighted | 31,536,697 | 31,536,697 | 31,536,697 |
| average number | | | |
| of ordinary | | | |
| shares for the | | | |
| purposes of | | | |
| the basic and | | | |
| diluted loss | | | |
| per share | | | |
+---------------------------------------------------+------------+------------+------------+
| | | | |
+---------------------------------------------------+------------+------------+------------+
6. INTANGIBLE ASSETS
+----------------------------------------------------------------------+--------------+
| | Acquired |
| | intellectual |
| | property |
| | rights |
| | GBP'000 |
+----------------------------------------------------------------------+--------------+
| Cost or valuation | |
+----------------------------------------------------------------------+--------------+
| Balance as at 1 July 2007 | 50 |
+----------------------------------------------------------------------+--------------+
| Additions | - |
+----------------------------------------------------------------------+--------------+
| | |
+----------------------------------------------------------------------+--------------+
| Balance as at 31 December 2007 | 50 |
+----------------------------------------------------------------------+--------------+
| Additions | - |
+----------------------------------------------------------------------+--------------+
| | |
+----------------------------------------------------------------------+--------------+
| Balance as at 30 June 2008 | 50 |
+----------------------------------------------------------------------+--------------+
| Additions | - |
+----------------------------------------------------------------------+--------------+
| | |
+----------------------------------------------------------------------+--------------+
| Balance as at 31 December 2008 | 50 |
+----------------------------------------------------------------------+--------------+
| | |
+----------------------------------------------------------------------+--------------+
+----------------------------------------------------------------------+----------+
| Accumulated amortisation and | |
| impairment | |
+----------------------------------------------------------------------+----------+
| Balance as at 1 July 2007 | 3 |
+----------------------------------------------------------------------+----------+
| Amortisation expense for the | 2 |
| period | |
+----------------------------------------------------------------------+----------+
| | |
+----------------------------------------------------------------------+----------+
| Balance as at 31 December 2007 | 5 |
+----------------------------------------------------------------------+----------+
| Amortisation expense for the | 3 |
| period | |
+----------------------------------------------------------------------+----------+
| | |
+----------------------------------------------------------------------+----------+
| Balance as at 30 June 2008 | 8 |
+----------------------------------------------------------------------+----------+
| Amortisation expense for the | 2 |
| period | |
+----------------------------------------------------------------------+----------+
| Impairment loss charged to income | 40 |
| statement | |
+----------------------------------------------------------------------+----------+
| | |
+----------------------------------------------------------------------+----------+
| Balance as at 31 December 2008 | 50 |
+----------------------------------------------------------------------+----------+
| | |
+----------------------------------------------------------------------+----------+
+----------------------------------------------------------------------+----------+
| Carrying amount | |
+----------------------------------------------------------------------+----------+
| | |
+----------------------------------------------------------------------+----------+
| 31 December 2007 | 45 |
+----------------------------------------------------------------------+----------+
| | |
+----------------------------------------------------------------------+----------+
| 30 June 2008 | 42 |
+----------------------------------------------------------------------+----------+
| | |
+----------------------------------------------------------------------+----------+
| 31 December 2008 | - |
+----------------------------------------------------------------------+----------+
| | |
+----------------------------------------------------------------------+----------+
As discussed in the Joint Statement from the Chairman and Chief Executive
Officer, the Company is undertaking a detailed analysis and review of the future
strategic alternatives for NPL-2008 and for the Company. The Company has felt it
appropriate to impair in full the value of the intangible asset, since until the
analysis is complete there remains uncertainty.
7. PROPERTY, PLANT AND EQUIPMENT
+----------------------------------------------+----------+-----------+-----------+----------+
| | Tooling | Office | Furniture | Total |
| | GBP'000 | equipment | and | GBP'000 |
| | | GBP'000 | fixtures | |
| | | | GBP'000 | |
+----------------------------------------------+----------+-----------+-----------+----------+
| Cost | | | | |
+----------------------------------------------+----------+-----------+-----------+----------+
| Balance | - | 11 | 4 | 15 |
| as at 1 | | | | |
| July | | | | |
| 2007 | | | | |
+----------------------------------------------+----------+-----------+-----------+----------+
| Additions | - | 6 | - | 6 |
+----------------------------------------------+----------+-----------+-----------+----------+
| | | | | |
+----------------------------------------------+----------+-----------+-----------+----------+
| Balance | - | 17 | 4 | 21 |
| as at | | | | |
| 31 | | | | |
| December | | | | |
| 2007 | | | | |
+----------------------------------------------+----------+-----------+-----------+----------+
| Additions | 175 | 2 | 2 | 179 |
+----------------------------------------------+----------+-----------+-----------+----------+
| | | | | |
+----------------------------------------------+----------+-----------+-----------+----------+
| Balance | 175 | 19 | 6 | 200 |
| as at | | | | |
| 30 June | | | | |
| 2008 | | | | |
+----------------------------------------------+----------+-----------+-----------+----------+
| Additions | - | 5 | - | 5 |
+----------------------------------------------+----------+-----------+-----------+----------+
| | | | | |
+----------------------------------------------+----------+-----------+-----------+----------+
| Balance | 175 | 24 | 6 | 205 |
| as at | | | | |
| 31 | | | | |
| December | | | | |
| 2008 | | | | |
+----------------------------------------------+----------+-----------+-----------+----------+
| | | | | |
+----------------------------------------------+----------+-----------+-----------+----------+
+-------------------------------------------------+----------+----------+----------+----------+
| Accumulated | | | | |
| depreciation | | | | |
| and | | | | |
| impairment | | | | |
+-------------------------------------------------+----------+----------+----------+----------+
| Balance | - | 3 | - | 3 |
| as at 1 | | | | |
| July | | | | |
| 2007 | | | | |
+-------------------------------------------------+----------+----------+----------+----------+
| Depreciation | - | 2 | 1 | 3 |
| expense for | | | | |
| the period | | | | |
+-------------------------------------------------+----------+----------+----------+----------+
| | | | | |
+-------------------------------------------------+----------+----------+----------+----------+
| Balance | - | 5 | 1 | 6 |
| as at | | | | |
| 31 | | | | |
| December | | | | |
| 2007 | | | | |
+-------------------------------------------------+----------+----------+----------+----------+
| Depreciation | 9 | 3 | 1 | 13 |
| expense for | | | | |
| the period | | | | |
+-------------------------------------------------+----------+----------+----------+----------+
| | | | | |
+-------------------------------------------------+----------+----------+----------+----------+
| Balance | 9 | 8 | 2 | 19 |
| as at | | | | |
| 30 June | | | | |
| 2008 | | | | |
+-------------------------------------------------+----------+----------+----------+----------+
| Depreciation | 17 | 3 | 1 | 21 |
| expense for | | | | |
| the period | | | | |
+-------------------------------------------------+----------+----------+----------+----------+
| Impairment | 149 | - | - | 149 |
| loss | | | | |
| charged to | | | | |
| income | | | | |
| statement | | | | |
+-------------------------------------------------+----------+----------+----------+----------+
| | | | | |
+-------------------------------------------------+----------+----------+----------+----------+
| Balance | 175 | 11 | 3 | 189 |
| as at | | | | |
| 31 | | | | |
| December | | | | |
| 2008 | | | | |
+-------------------------------------------------+----------+----------+----------+----------+
| | | | | |
+-------------------------------------------------+----------+----------+----------+----------+
+---------------------------------------------+----------+----------+----------+----------+
| Carrying | | | | |
| amount | | | | |
+---------------------------------------------+----------+----------+----------+----------+
| | | | | |
+---------------------------------------------+----------+----------+----------+----------+
| 31 | - | 12 | 3 | 15 |
| December | | | | |
| 2007 | | | | |
+---------------------------------------------+----------+----------+----------+----------+
| | | | | |
+---------------------------------------------+----------+----------+----------+----------+
| 30 | 166 | 11 | 4 | 181 |
| June | | | | |
| 2008 | | | | |
+---------------------------------------------+----------+----------+----------+----------+
| | | | | |
+---------------------------------------------+----------+----------+----------+----------+
| 31 | - | 13 | 3 | 16 |
| December | | | | |
| 2008 | | | | |
+---------------------------------------------+----------+----------+----------+----------+
| | | | | |
+---------------------------------------------+----------+----------+----------+----------+
As discussed in the Joint Statement from the Chairman and Chief Executive
Officer, the Company is undertaking a detailed analysis and review of the future
strategic alternatives for NPL-2008 and for the Company. The Company has felt it
appropriate to impair in full the value of the tooling, since until the analysis
is complete there remains uncertainty.
8. NOTES TO THE CASH FLOW STATEMENT
+----------------------------------------------------------------+----------+----------+----------+
| | Six | Six | Year |
| | months | months | ended 30 |
| | ended 31 | ended 31 | June |
| | Dec 2008 | Dec 2007 | 2008 |
| | GBP'000 | GBP'000 | GBP'000 |
+----------------------------------------------------------------+----------+----------+----------+
| | | | |
+----------------------------------------------------------------+----------+----------+----------+
| Operating loss | (4,513) | (2,352) | (5,880) |
+----------------------------------------------------------------+----------+----------+----------+
| | | | |
+----------------------------------------------------------------+----------+----------+----------+
| Adjustments | | | |
| for: | | | |
+----------------------------------------------------------------+----------+----------+----------+
| Amortisation | 2 | 2 | 5 |
| of | | | |
| intangible | | | |
| assets | | | |
+----------------------------------------------------------------+----------+----------+----------+
| Impairment | 40 | - | - |
| of | | | |
| intangibles | | | |
| assets | | | |
+----------------------------------------------------------------+----------+----------+----------+
| Depreciation | 21 | 3 | 16 |
| of property, | | | |
| plant and | | | |
| equipment | | | |
+----------------------------------------------------------------+----------+----------+----------+
| Impairment | 149 | - | - |
| of | | | |
| property, | | | |
| plant and | | | |
| equipment | | | |
+----------------------------------------------------------------+----------+----------+----------+
| Share | 308 | 74 | 147 |
| option | | | |
| expense | | | |
+----------------------------------------------------------------+----------+----------+----------+
| | | | |
+----------------------------------------------------------------+----------+----------+----------+
| Operating cash | (3,993) | (2,273) | (5,712) |
| flows before | | | |
| movements in | | | |
| working | | | |
| capital | | | |
+----------------------------------------------------------------+----------+----------+----------+
| | | | |
+----------------------------------------------------------------+----------+----------+----------+
| Decrease | 342 | (429) | (246) |
| / | | | |
| (increase) | | | |
| in | | | |
| receivables | | | |
+----------------------------------------------------------------+----------+----------+----------+
| Decrease | (233) | (725) | (21) |
| in | | | |
| payables | | | |
+----------------------------------------------------------------+----------+----------+----------+
| Increase | (148) | (71) | (24) |
| in | | | |
| valuation | | | |
| of | | | |
| derivative | | | |
| financial | | | |
| investments | | | |
+----------------------------------------------------------------+----------+----------+----------+
| | | | |
+----------------------------------------------------------------+----------+----------+----------+
| | | | |
+----------------------------------------------------------------+----------+----------+----------+
| Net cash used | (4,032) | (3,498) | (6,003) |
| in operations | | | |
+----------------------------------------------------------------+----------+----------+----------+
| | | | |
+----------------------------------------------------------------+----------+----------+----------+
| | | | |
+----------------------------------------------------------------+----------+----------+----------+
Cash and cash equivalents (which are presented as a single class of assets on
the face of the balance sheet) comprise cash at bank and other short-term highly
liquid investments with a maturity of three months or less.
Independent review report to Neuropharm Group plc
We have been engaged by the company to review the condensed set of financial
statements in the half-yearly financial report for the six months ended 31
December 2008 which comprises the consolidated income statement, the
consolidated statement of changes in equity, the consolidated balance sheet, the
consolidated cash flow statement and related notes 1 to 8. We have read the
other information contained in the half-yearly financial report and considered
whether it contains any apparent misstatements or material inconsistencies with
the information in the condensed set of financial statements.
This report is made solely to the company in accordance with International
Standard on Review Engagements 2410 issued by the Auditing Practices Board. Our
work has been undertaken so that we might state to the company those matters we
are required to state to them in an independent review report and for no other
purpose. To the fullest extent permitted by law, we do not accept or assume
responsibility to anyone other than the company, for our review work, for this
report, or for the conclusions we have formed.
Directors' responsibilities
The half-yearly financial report is the responsibility of, and has been approved
by, the directors. The directors are responsible for preparing the half-yearly
financial report in accordance with the AIM Rules of the London Stock Exchange
As disclosed in note 2, the annual financial statements of the group are
prepared in accordance with IFRS as adopted by the European Union. The condensed
set of financial statements included in this half-yearly financial report have
been prepared in accordance with the accounting policies the group intends to
use in preparing its next annual financial statements.
Our responsibility
Our responsibility is to express to the Company a conclusion on the condensed
set of financial statements in the half-yearly financial report based on our
review.
Scope of Review
We conducted our review in accordance with International Standard on Review
Engagements (UK and Ireland) 2410, "Review of Interim Financial Information
Performed by the Independent Auditor of the Entity" issued by the Auditing
Practices Board for use in the United Kingdom. A review of interim financial
information consists of making inquiries, primarily of persons responsible for
financial and accounting matters, and applying analytical and other review
procedures. A review is substantially less in scope than an audit conducted in
accordance with International Standards on Auditing (UK and Ireland) and
consequently does not enable us to obtain assurance that we would become aware
of all significant matters that might be identified in an audit. Accordingly, we
do not express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that causes us to believe
that the condensed set of financial statements in the half-yearly financial
report for the six months ended 31 December 2008 is not prepared, in all
material respects, in accordance with the AIM Rules of the London Stock
Exchange.
Deloitte LLP
Chartered Accountants and Statutory Auditors
16 March 2009
Cambridge UK
This information is provided by RNS
The company news service from the London Stock Exchange
END
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