TIDMNIM
RNS Number : 5174S
Norwood Immunology Ld
20 May 2009
FOR IMMEDIATE RELEASE 20 MAY 2009
NORWOOD IMMUNOLOGY LIMITED
INTERIM CONSOLIDATED RESULTS FOR THE HALF YEAR
TO 31 DECEMBER 2008
Norwood Immunology Limited ('Norwood Immunology' or 'the Group') (AIM:NIM), the
Group with technologies in the fields of the rejuvenation of the immune system,
the development of virosomal vaccines and stem cell therapies, today announces
its interim consolidated results for the half year ended 31 December 2008.
BUSINESS HIGHLIGHTS AND CHAIRMAN'S REVIEW
Funding
For some time, your Board has recognised the importance of securing appropriate
finance for the requirements of the Group and has been exploring all options
with advisers.
The Board took the view in early 2008 that the slow development and early stage
of the Group's projects would make raising finance through traditional capital
market routes very difficult. Accordingly, the Board concluded that it should
actively explore the divestment of assets to raise capital. In this latter
regard, during the half year ended 31 December 2008, the Board announced that it
had commenced discussions regarding the sale of Bestewil, the parent company of
the virosomal vaccine development business. The completion of the sale of the
Virosome vaccine business to Mymetics Corporation was announced on 17 April 2009
and a special dividend of 1p per Ordinary. Share, funded from the initial sale
proceeds, was paid to shareholders on 8 May 2009.
Whilst completed after the current period end, the sale of the Virosome project,
provides the Group with the necessary capital to ensure it can, for the
foreseeable future, continue to trade on a 'going concern' basis.
Virosome Biologicals
The Virosome vaccine business developed well during the six months to 31
December 2008, in particular with ongoing work being conducted relating to the
exclusive evaluation agreement with MedImmune LLC for our in-house developed
vaccine candidate for Respiratory Syncytial Virus.
The Board believes that this progress, together with the Virosome pipeline and
IP portfolio, were important in achieving the ultimate sale of the business.
The sale of the Virosome vaccine business was based on non-contingent
consideration of EUR5million in cash together with a EUR2.5million interest bearing
convertible loan note. In addition, further consideration may be receivable by
way of milestones and royalties depending upon the achievements of the business
sold.
Although the sale of the Virosome vaccine business occurred after
the 31st December 2008, the sale gave rise to a reassessment of the impairment
provision made in the year ended 30 June 2008 against the in-process R&D
associated with this business. Accordingly, a reversal of A$13.3m previously
provided has been made in these interim consolidated results.
Immune System Rejuvenation
The Company has had disappointing news with regard to both the progress of
recruitment for the US based clinical trials, as well as the results from
interim data.
The Group's Phase II US clinical trial in cancer patients undergoing autologous
(self-derived) BMT in the USA, to determine whether there is enhanced immune
recovery as a result of using Norwood Immunology's technology, continued to
experience slower than expected recruitment rates. The Group attempted to enrol
additional US trial centres, however despite these efforts, and those of the
Principal Investigator, issues related to both the complexity and duration of
the protocol, frustrated these initiatives. As a result, it was decided, in
April 2009, to halt this trial. Results from the patients completing the
protocol will be evaluated to determine whether any useful data regarding the
therapy can be determined.
The Company has also been conducting a Phase II US clinical trial looking at the
GnRH analogue Lupron Depot , being administered as an adjunctive immunology
therapy in relation to an experimental melanoma vaccine. This trial has been
conducted in collaboration with The University of Texas MD Anderson Cancer
Center, of Houston. Interim data has been analysed from the first 50 patients
enrolled in the study. The interim analysis of results has not shown a
statistically significant vaccine response or improvement in efficacy, and it is
not expected that the trial will be progressed further.
The Board have determined that in view of the above, and the resultant
uncertainties in regard to the commercial opportunities, that the Company should
not commit to spend any further sums on this project.
Stem Cell Initiative
The Group has been pursuing an examination of the commercial potential for stem
cell-based initiatives. In the course of the last 12 months, the Group has been
investigating the commercial opportunities in regard to the potential provision
of stem cell therapies in the veterinary setting. The focus of attention on the
veterinary market has been driven by the commercial opportunities, intellectual
property considerations, and the relatively lower regulatory barriers.
The Group commenced an involvement in trial therapeutic treatments of canines in
late 2008. The trials are ongoing. The Company is continuing to monitor the
progress of animals treated, but initial results have been encouraging. The
Company is currently completing an evaluation of the initial trial results, the
resultant commercial opportunities and certain intellectual property
considerations. The Group has the opportunity to secure a stake in an Australian
based veterinary stem cell initiative. It is currently expected that the Group
will, in the near future, make a determination with respect to the commercial
opportunities and its ongoing involvement in veterinary stem cell treatments.
Strategic Review
Following the sale of Virosome Biologicals, together with the disappointing
progress from the US clinical trials, the Board is critically appraising the
strategic direction of the Group. This exercise is being conducted in
consultation with advisers and major shareholders.
As previously announced, and after having taken appropriate advice on the merits
of the various alternatives, the Board is planning to shortly send to
shareholders its recommendations and proposals regarding the future direction of
the Group. These recommendations may include a recommendation that NIM should
seek a delisting from AIM. In addition, it is possible, subject to a review of
the alternatives, that the Board might make a proposal to repurchase some of the
Company's shares. Such proposals would require prior shareholder approval at an
EGM.
Financial Highlights
The consolidated profit after tax for the 6 months ended 31 December 2008 was
A$12,852,003 (2007: loss A$1,802,973), or approximately GBP6.15 million. This is
after making a reversal of an impairment provision to the carrying value of
intangible assets of A$13,266,500. It is encouraging to note that, before the
effect of the impairment provision release, the consolidated loss after tax of
the Group for the period was limited to A$414,497 (approximately GBP200,000).
Cash on hand at 31 December 2008 was A$1,247,926 (2007: A$3, 213,403),
approximately GBP0.6 million.
Basic profit per share was A$0.0563 (2007: loss per share A$ 0.1168),
approximately GBP0.027 (2007: loss - GBP0.051).
Summary and Outlook
Following the sale of the Virosome Biologicals business, and particularly given
the disappointing progress and trial results on the immunology programme, the
Board believes that the future strategic direction of the Group needs to be
carefully re-assessed. This is particularly the case given the Board's recent
decision to suspend any further expenditure commitments on the Immune System
Rejuvenation project. The Board is consulting with advisers and key
shareholders concerning the appropriate future direction of the Group. Whilst
this exercise is being undertaken, the Group continues to focus on cost control
and minimising cash burn. As stated above, however, a decision to rapidly
return a significant proportion of the net proceeds of the Bestewil disposal by
way of a special dividend (of A$4.77 million in aggregate) has already been
taken.
Given that the payment of a significant part of the consideration for the sale
of Virosome Biologicals is via a three year convertible note - together with
possible future milestone payments - it is important that the Company makes sure
that it remains in a sound financial position. While the sale of the Virosome
Biologicals business occurred after the end of the current reporting period, the
cash raised from the sale has provided the Group with the necessary capital to
ensure its ability to continue as going concern for the foreseeable future.
The commercial opportunity in connection with stem cell therapies in the
veterinary area shows considerable promise, and the Group will further evaluate
and assess this opportunity over the remainder of this financial year. During
the course of the above review, the Board has determined that expenditure in
this area will be both tightly controlled and modest.
Peter Hansen
Chairman
19 May 2009
For further information contact:
Richard Williams, Chief Executive Officer, Norwood Immunology Limited
www.norwoodimmunology.com
+44 (0)7860 295153
Capel Irwin, KBC Peel Hunt Ltd
+44 (0) 207 418 8900
For further information contact:
Richard Williams, Chief Executive Officer, Norwood Immunology Limited
www.norwoodimmunology.com
+44 (0)7860 295153
Capel Irwin, KBC Peel Hunt Ltd
David Anderson, KBC Peel Hunt Ltd
+44 (0) 207 418 8900
+--------------------------------------+--+------+-------------+--------------+-----+---------+---+
| Consolidated Income Statement |
+---------------------------------------------------------------------------------------------+
| | | |
+-----------------------------------------+------+--------------------------------------------+
| | |Note | Unaudited | Unaudited | Audited |
| | | |6 months to | 6 months to | 12 |
| | | |31 December | 31 December | months |
| | | | 2008 | 2007 | to |
| | | | A$ | A$ | 30 June |
| | | | | | 2008 |
| | | | | | A$ |
+--------------------------------------+--+------+-------------+--------------+---------------+
| Revenue from ordinary activities | | | 786,486 | 121,771 | 259,985 |
+--------------------------------------+--+------+-------------+--------------------+-------------+
| Other income | | | 25,675 | 98,047 | 287,433 |
+--------------------------------------+--+------+-------------+--------------------+-------------+
| Depreciation and amortization | | | (30,331) | (30,085) | (58,277) |
| expense | | | | | |
+--------------------------------------+--+------+-------------+--------------------+-------------+
| Employee benefits expense | | | (656,193) | (770,670) | (1,628,496) |
+--------------------------------------+--+------+-------------+--------------------+-------------+
| Finance costs | | | (15,866) | (25,758) | (55,569) |
+--------------------------------------+--+------+-------------+--------------------+-------------+
| Insurance | | | (51,084) | (54,708) | (106,801) |
+--------------------------------------+--+------+-------------+--------------------+-------------+
| Investor relations | | | (14,066) | (72,816) | (139,074) |
+--------------------------------------+--+------+-------------+--------------------+-------------+
| Legal costs | | | (140,376) | (3,172) | (47,483) |
+--------------------------------------+--+------+-------------+--------------------+-------------+
| Net foreign exchange (loss)/gain | | | 463,685 | 8,064 | (101,179) |
+--------------------------------------+--+------+-------------+--------------------+-------------+
| Professional and consulting fees | | | (319,949) | (270,454) | (573,941) |
+--------------------------------------+--+------+-------------+--------------------+-------------+
| Patent costs | | | (104,525) | (138,628) | (309,482) |
+--------------------------------------+--+------+-------------+--------------------+-------------+
| Travel expenses | | | (50,135) | (113,275) | (202,127) |
+--------------------------------------+--+------+-------------+--------------------+-------------+
| Research and development costs | | | (160,749) | (417,656) | (753,144) |
| immediately expensed (net of grant) | | | | | |
+--------------------------------------+--+------+-------------+--------------------+-------------+
| Impairment of non-current assets | | | | | 24,880,532 |
| | | | | | |
| | | | 13,266,500 | (24,880,533) | |
+--------------------------------------+--+------+-------------+--------------------+-------------+
| Other expenses from ordinary | | | | | (179,604) |
| activities | | | | | |
| | | | (147,069) | (122,540) | |
+--------------------------------------+--+------+-------------+--------------------+-------------+
| Loss before income tax expense | | | | | (28,488,291) |
| | | | | | |
| | | | 12,852,003 | (26,672,413 | |
+--------------------------------------+--+------+-------------+--------------+---------------+
| Income tax expense | | | | | - |
| | | | | | |
| | | | - | - | |
+--------------------------------------+--+------+-------------+--------------+---------------+
| Profit (Loss) for the period | | | | | (28,488,291) |
| attributable to members of the Group | | | 12,852,003 | (26,672,413) | |
+--------------------------------------+--+------+-------------+--------------+---------------+
| | | | | | |
+--------------------------------------+--+------+-------------+--------------+---------------+
| Profit (Loss) per share | | | | | |
+--------------------------------------+--+------+-------------+--------------+---------------+
| Basic | | 3 | 0.0563 | (0.1168) | (0.125) |
+--------------------------------------+--+------+-------------+--------------+---------------+
| | | |
+--------------------------------------+--+------+
| Diluted | | 3 | 0.05755 | (0.1168) | (0.125) |
| | | | | | |
+--------------------------------------+--+------+-------------+--------------+-----+---------+---+
All activities derive from continuing operations.
There are no recognised gains and losses for the current financial period and
preceding financial year other than as stated in the consolidated income
statement.
+--------------------------------+--+------+------+------------+----+---------+----+---------+----+
| Consolidated Balance Sheet |
| |
+-------------------------------------------------------------------------------------------------+
| | | | | | |
+--------------------------------+--+------+------+-----------------+-----------------------------+
| | | |Note | Unaudited | Unaudited | Audited |
| | | | | as at | | as at |
| | | | | 31 December | as at | 30 June |
| | | | | 2008 | 31 | 2008 |
| | | | | A$ | December | A$ |
| | | | | | 2007 | |
| | | | | | A$ | |
+--------------------------------+--+------+------+-----------------+--------------+--------------+
| Current assets | | | | | | |
+--------------------------------+--+------+------+-----------------+--------------+--------------+
| Cash and cash equivalents | | | | 1,247,926 | 3,213,403 | 1,243,759 |
+--------------------------------+--+------+------+-----------------+--------------+--------------+
| Trade and other receivables | | | | 287,608 | 101,433 | 414,255 |
+--------------------------------+--+------+------+-----------------+--------------+--------------+
| Prepayments | | | | 48,012 | 99,434 | 99,079 |
+--------------------------------+--+------+------+-----------------+--------------+--------------+
| Total current assets | | | | | | 1,757,093 |
| | | | | | | |
| | | | | 1,583,546 | 3,414,280 | |
+--------------------------------+--+------+------+-----------------+--------------+--------------+
| | | | | | | |
+--------------------------------+--+------+------+-----------------+--------------+--------------+
| Non-current assets | | | | | | |
+--------------------------------+--+------+------+-----------------+--------------+--------------+
| Other financial assets | | | | 14,361 | 11,836 | 11,553 |
+--------------------------------+--+------+------+-----------------+--------------+--------------+
| Plant and equipment | | | | 216,382 | 237,584 | 202,782 |
+--------------------------------+--+------+------+-----------------+--------------+--------------+
| | | | 4 | - | - | - |
| Goodwill | | | | | | |
+--------------------------------+--+------+------+-----------------+--------------+--------------+
| | | | 5 | | | - |
| Intangible assets | | | | | | |
| | | | | 13,266,500 | - | |
+--------------------------------+--+------+------+-----------------+--------------+--------------+
| Total non-current assets | | | | | | 214,335 |
| | | | | 13,497,243 | 249,420 | |
+--------------------------------+--+------+------+-----------------+--------------+--------------+
| | | | | | | |
+--------------------------------+--+------+------+-----------------+--------------+--------------+
| Total assets | | | | | | 1,971,428 |
| | | | | | | |
| | | | | 15,080,789 | 3,663,700 | |
+--------------------------------+--+------+------+-----------------+--------------+--------------+
| | | | | | | |
+--------------------------------+--+------+------+-----------------+--------------+--------------+
| Current liabilities | | | | | | |
+--------------------------------+--+------+------+-----------------+--------------+--------------+
| Trade and other payables | | | | 1,277,410 | 482,421 | 1,062,220 |
+--------------------------------+--+------+------+-----------------+--------------+--------------+
| Other financial liabilities | | | 6 | 545,366 | 890,801 | 449,425 |
+--------------------------------+--+------+------+-----------------+--------------+--------------+
| Provisions | | | | 27,610 | 46,123 | 23,926 |
+--------------------------------+--+------+------+-----------------+--------------+--------------+
| Total current liabilities | | | | | | |
| | | | | | | |
| | | | | 1,850,386 | 1,419,345 | 1,535,571 |
+--------------------------------+--+------+------+-----------------+--------------+--------------+
| | | | | | | |
+--------------------------------+--+------+------+-----------------+--------------+--------------+
| Non-current liabilities | | | | | | |
+--------------------------------+--+------+------+-----------------+--------------+--------------+
| Provisions | | | | | | |
| | | | | | | 42,479 |
| | | | | 53,906 | 22,242 | |
+--------------------------------+--+------+------+-----------------+--------------+--------------+
| Total non-current liabilities | | | | | | 42,479 |
| | | | | | | |
| | | | | 53,906 | 22,242 | |
+--------------------------------+--+------+------+-----------------+--------------+--------------+
| | | | | | | |
+--------------------------------+--+------+------+-----------------+--------------+--------------+
| Total liabilities | | | | | | 42,479 |
| | | | | | | |
| | | | | 1,904,292 | 1,441,587 | |
+--------------------------------+--+------+------+-----------------+--------------+--------------+
| | | | | | | 1,578,050 |
+--------------------------------+--+------+------+-----------------+--------------+--------------+
| Net assets | | | | | | 393,379 |
| | | | | | | |
| | | | | 13,176,496 | 2,222,113 | |
+--------------------------------+--+------+------+-----------------+--------------+--------------+
| | | | | | | |
+--------------------------------+--+------+------+-----------------+--------------+--------------+
| Equity | | | | | | |
+--------------------------------+--+------+------+-----------------+--------------+--------------+
| Issued capital | | | 7 | | | |
| | | | | | | |
| | | | | 57,842,753 | 57,842,753 | 57,842,753 |
+--------------------------------+--+------+------+-----------------+--------------+--------------+
| Foreign currency translation | | | | | | |
| reserve | | | | | | |
| | | | | (81,742) | - | (12,857) |
+--------------------------------+--+------+------+-----------------+--------------+--------------+
| Accumulated losses | | | 7 | | | |
| | | | | | | |
| | | | | (44,584,515) | (55,620,640) | (57,436,518) |
+--------------------------------+--+------+------+-----------------+--------------+--------------+
| Total equity | | | | | | 393,378 |
| | | | | | | |
| | | | | 13,176,496 | 2,222,113 | |
+--------------------------------+--+------+------+------------+----+---------+----+---------+----+
+--------------------------------+---+--+--+--+------+-------------+--------------+-------------+
| Consolidated Cash flow Statement |
| |
+-----------------------------------------------------------------------------------------------+
| | | | | | |
+--------------------------------+------+--+---------+-------------+----------------------------+
| | | | |Note | Unaudited | Unaudited | Audited |
| | | | | |6 months to | 6 months to | 12 months |
| | | | | |31 December | 31 December | to |
| | | | | | 2008 | 2007 | 30 June |
| | | | | | A$ | A$ | 2008 |
| | | | | | | | A$ |
+--------------------------------+------+--+--+------+-------------+--------------+-------------+
| Cash flows from operating | | | | | | | |
| activities | | | | | | | |
+--------------------------------+------+--+--+------+-------------+--------------+-------------+
| Receipts from customers | | | | | 570.647 | 121,771 | 199,287 |
+--------------------------------+------+--+--+------+-------------+--------------+-------------+
| Payments to suppliers and | | | | | (592,155) | (2,663,472) | (4,328,407) |
| employees | | | | | | | |
+--------------------------------+------+--+--+------+-------------+--------------+-------------+
| Interest and other costs of | | | | | - | - | (55,569) |
| finance paid | | | | | | | |
+--------------------------------+------+--+--+------+-------------+--------------+-------------+
| Net cash used in operating activities | | | 8 | (21,508) | (2,541,701) | (4,184,689) |
+---------------------------------------+--+--+------+-------------+--------------+-------------+
| | | | | | | | |
+------------------------------------+--+--+--+------+-------------+--------------+-------------+
| Cash flows from investing | | | | | | | |
| activities | | | | | | | |
+------------------------------------+--+--+--+------+-------------+--------------+-------------+
| Interest received | | | | | 25,675 | 95,057 | 143,337 |
+------------------------------------+--+--+--+------+-------------+--------------+-------------+
| Payment for plant and equipment | | | | | (-) | (12,467) | (10,458) |
+------------------------------------+--+--+--+------+-------------+--------------+-------------+
| Payment for intangible assets | | | | | - | (47,924) | (47,923) |
+------------------------------------+--+--+--+------+-------------+--------------+-------------+
| Payment for businesses | | | | - | - | - |
+---------------------------------------+--+--+------+-------------+--------------+-------------+
| Purchase of other financial assets | | | | - | - | (377) |
+---------------------------------------+--+--+------+-------------+--------------+-------------+
| Proceeds from sale of plant & | | | | - | - | 318 |
| equipment | | | | | | |
+---------------------------------------+--+--+------+-------------+--------------+-------------+
| Net cash used in investing activities | | | | 25,675 | 34,666 | 84,897 |
+---------------------------------------+--+--+------+-------------+--------------+-------------+
| | | | | | | | |
+--------------------------------+------+--+--+------+-------------+--------------+-------------+
| Cash flows from financing | | | | | | | |
| activities | | | | | | | |
+--------------------------------+------+--+--+------+-------------+--------------+-------------+
| Repayment of borrowings | | | | | - | - | (351,159) |
+--------------------------------+------+--+--+------+-------------+--------------+-------------+
| Net cash provided by/(used in) | | | | - | - | (351,119) |
| financing activities | | | | | | |
+---------------------------------------+--+--+------+-------------+--------------+-------------+
| | | | | | | | |
+--------------------------------+------+--+--+------+-------------+--------------+-------------+
| Net increase/(decrease) in | | | | | 4,167 | (2,507,035) | (4,450,911) |
| cash and cash equivalents | | | | | | | |
+--------------------------------+------+--+--+------+-------------+--------------+-------------+
| Cash and cash equivalents at the beginning | | 1,243,759 | 5,720,438 | 5,720,483 |
| of the period | | | | |
+---------------------------------------------+------+-------------+--------------+-------------+
| Effects of exchange rate changes on the | | - | - | (25,768) |
| balance of cash held in foreign currencies | | | | |
+---------------------------------------------+------+-------------+--------------+-------------+
| Cash and cash equivalents at the end of the | | 1,247,926 | 3,213,403 | 1,243,759 |
| period | | | | |
+---------------------------------------------+------+-------------+--------------+-------------+
| |
+--------------------------------+---+--+--+--+------+-------------+--------------+-------------+
NOTES TO THE FINANCIAL INFORMATION
1 Basis of preparation
The results for the half-year are unaudited. The financial information in this
interim statement does not constitute the statutory financial statements within
the meaning of section 240 of the Companies Act 1985.
The financial information in this announcement has been prepared on the basis of
Australian IFRS and the accounting policies as set out in the most recently
published set of annual financial statements. The interim results and prior year
comparative results have been prepared using accounting policies consistent with
those adopted in the audited financial statements for the year to 30 June 2008.
This includes prior year comparatives for the 6 months to 31 December 2007.
The financial information for the year ended 30 June 2008, has been extracted
from the audited financial statements for the year ended 30 June 2008. The
auditor's report on those accounts was unqualified.
This interim statement was approved by the Board of Norwood Immunology Limited
on 19 May 2008.
This interim statement of unaudited results for the 6 months ended 31 December
2008 is, from today 20 May 2008, available on the Company's website
www.norwoodimmunology.com.
2 Going concern
The Group is an emerging pharmaceutical business and as such expects to be cash
absorbing until its technologies are commercialised.
As a result of the completed disposal of the Virosome vaccine business after
period end, the Group now has sufficient cash resources to ensure that it can
continue as a going concern for the foreseeable future, whilst its strategic
direction is determined. Accordingly, these financial statements have been
prepared on a going concern basis which contemplates the continuity of normal
business activities and the realisation of assets and settlement of liabilities
in the ordinary course of business.
3 Basic and diluted loss per ordinary share
The calculations of earnings per share are based on the following profits
(losses) and numbers of shares.
+----------------------------------------------+----+-------------+--------------+--------------+
| | | Unaudited | Unaudited | Audited |
| | | 6 months | 6 months to | 12 months |
| | | to | 31 December | to |
| | | 31 | 2007 | 30 June |
| | | December | A$ | 2008 |
| | | 2008 | | A$ |
| | | A$ | | |
+----------------------------------------------+----+-------------+--------------+--------------+
| | | | | |
+----------------------------------------------+----+-------------+--------------+--------------+
| Profit | | 12,852,003 | (26,672,143) | (28,488,291) |
| (Loss) | | | | |
| for | | | | |
| the | | | | |
| financial | | | | |
| period | | | | |
+----------------------------------------------+----+-------------+--------------+--------------+
| | | | | |
+----------------------------------------------+----+-------------+--------------+--------------+
| Weighted | | No. | No. | No. |
| average | | | | |
| number | | | | |
| of | | | | |
| shares: | | | | |
+----------------------------------------------+----+-------------+--------------+--------------+
| | | | | |
+----------------------------------------------+----+-------------+--------------+--------------+
| For | | 228,251,378 | 228,241,387 | (28,488,291) |
| basic | | | | |
| earnings | | | | |
| per | | | | |
| share | | | | |
+----------------------------------------------+----+-------------+--------------+--------------+
| Exercise | | - | - | - |
| of share | | | | |
| options | | | | |
+----------------------------------------------+----+-------------+--------------+--------------+
| | |
+----------------------------------------------+----+
| For | | 228,251,378 | 228,241,387 | 228,241,387 |
| diluted | | | | |
| earnings | | | | |
| per | | | | |
| share | | | | |
+----------------------------------------------+----+-------------+--------------+--------------+
| | | | | |
+----------------------------------------------+----+-------------+--------------+--------------+
| | |
+----------------------------------------------+----+-------------+--------------+--------------+
EPS has been prepared using Australian IFRS results but consistent with UK GAAP
under FRS 14, presentation of diluted EPS is required when a company could be
called upon to issue shares that would decrease net profit or increase net loss
per share. The loss and weighted average number of ordinary shares for the
purpose of calculating the diluted earnings per ordinary share are identical to
those used for the basic earnings per ordinary share as, in the periods to 30
June 2008, the exercise of share options would have the effect of reducing the
loss per ordinary share (and is therefore not dilutive) and in the current
financial period, all options had already lapsed.
4 Goodwill
+--------------------------------------+--+-------------+-------------+------------+------------+
| | | Unaudited | Unaudited | Audited | |
| | | 6 months to | 6 months | 12 months | |
| | | 31 December | 31 December | to | |
| | | 2008 | 2007 | 30 June | |
| | | A$ | A$ | 2008 | |
| | | | | A$ | |
| | | | | | |
+--------------------------------------+--+-------------+-------------+------------+------------+
| Net book value: | | | | |
+--------------------------------------+--+-------------+-------------+------------+
| Balance at beginning of financial | | 2,100,000 | 2,100,000 | 2,100,000 |
| period | | | | |
+--------------------------------------+--+-------------+-------------+------------+
| Impairment | | (2,100,000) | (2,100,000) | - |
+--------------------------------------+--+-------------+-------------+------------+
| Balance at end of financial period | | - | - | 2,100,000 |
+--------------------------------------+--+-------------+-------------+------------+------------+
In the financial year ended 30 June 2008, the Directors re-assessed the carrying
values of the goodwill from the acquisition of Virosome Biologicals. The cash
position of the Group at the time created uncertainty as to whether there would
be adequate financial resources in the long term to complete the development of
the Virosome Biologicals technologies and to create future economic benefits.
Accordingly, the Directors therefore believed that a prudent application of
Australian IFRS led to an impairment to the carrying value goodwill.
5 Other intangible assets
+-------------------------------------+-------------+------------+-------------+
| Gross carrying value | In-process | Patents | Total |
| | R&D | A$ | A$ |
| | A$ | | |
+-------------------------------------+-------------+------------+-------------+
| | | | |
+-------------------------------------+-------------+------------+-------------+
| Balance at 1 July 2007 | 18,258,031 | 5,141,780 | 23,447,734 |
+-------------------------------------+-------------+------------+-------------+
| Additions from internal | - | 47,923 | 47,923 |
| developments | | | |
+-------------------------------------+-------------+------------+-------------+
| Balance at 30 June 2008 | 18,258,031 | 5,189,703 | 23,447,734 |
+-------------------------------------+-------------+------------+-------------+
| Additions from internal | - | - | - |
| developments | | | |
+-------------------------------------+-------------+------------+-------------+
| Balance at 31 December 2008 | 18,258,031 | 5,189,704 | 23,447,735 |
+-------------------------------------+-------------+------------+-------------+
+-------------------------------------+--+-------------+------------+-------------+
| Accumulated | | In-process | Patents | Total |
| amortisation/impairment | | R&D | A$ | A$ |
| | | A$ | | |
+-------------------------------------+--+-------------+------------+-------------+
| | | | | |
+-------------------------------------+--+-------------+------------+-------------+
| Balance at 1 July 2007 | | - | 667,202 | 667,202 |
+-------------------------------------+--+-------------+------------+-------------+
| Amortisation expense | | - | - | - |
+-------------------------------------+--+-------------+------------+-------------+
| Impairment losses charged to | | 18,258,031 | 4,522,502 | 22,780,533 |
| profit | | | | |
+-------------------------------------+--+-------------+------------+-------------+
| Balance at 30 June 2008 | | 18,258,031 | | |
+-------------------------------------+--+-------------+------------+-------------+
| Amortisation expense | | - | - | - |
+-------------------------------------+--+-------------+------------+-------------+
| Reversal of 2007/8 impairment | | 13,266,599 | - | - |
| provision | | | | |
+-------------------------------------+--+-------------+------------+-------------+
| Balance at 31 December 2008 | | 4,991,531 | - | - |
+-------------------------------------+--+-------------+------------+-------------+
+-------------------------------------+---+------------+------------+-------------+
| Net book value | | In-process | Patents | Total |
| | | R&D | A$ | A$ |
| | | A$ | | |
+-------------------------------------+---+------------+------------+-------------+
| | | | | |
+-------------------------------------+---+------------+------------+-------------+
| As at 30 June 2008 | | - | - | - |
+-------------------------------------+---+------------+------------+-------------+
| As at 31 December 2008 | | 13,266,500 | - | 13,266,500 |
+-------------------------------------+---+------------+------------+-------------+
During the year ended 30 June 2008, the Directors re-assessed the carrying
values of intangible assets comprising the Group's patents and in-process R&D.
Following completion of the sale of Virosome Biologicals to Mymetics Corporation
in April 2009, the directors have reversed an element of the impairment
provision then made and this is reflected in the increased valuation of
in-process R&D. The revision to the impairment provision reflects the
non-contingent consideration received on the sale of Virosome, net of costs.
However, as the Board are currently uncertain about whether the future strategy
of the Group will involve further development of the remaining IP portfolio, it
has been felt prudent to maintain a full provision against remaining patents and
non-Virosome related in-process R&D.
6 Current interest bearing liabilities
+-------------------------------------+----+-------------+-------------+------------+
| | |31 December |31 December | 30 June |
| | | 2008 | 2007 | 2008 |
| | | A$ | A$ | A$ |
+-------------------------------------+----+-------------+-------------+------------+
| Unsecured: | | | | |
+-------------------------------------+----+-------------+-------------+------------+
| Deferred consideration | | 545,366 | 890,801 | 449,425 |
+-------------------------------------+----+-------------+-------------+------------+
| | | 545,366 | 890,801 | 449,425 |
+-------------------------------------+----+-------------+-------------+------------+
On 27 November 2006 the Group completed the acquisition of all of the issued
shares of Bestewil. As part of the consideration for the acquisition a payment
of EUR0.5 million was deferred, and by agreement with the recipients was finally
paid in full in April 2009. The balance above includes accrued interest payable
on the deferred amount at 6% per annum.
7 Statement of Changes in Equity
+--------------------------+-------------+--------------+-------------+--------+--------+
| | For the 6 months to 31 December 2008 |
+--------------------------+---------------------------------------------------+
| | Issued | Accumulated | Foreign | Total |
| | Capital | losses | currency | A$ |
| | A$ | A$ |translation | |
| | | | reserve | |
| | | | A$ | |
+--------------------------+-------------+--------------+-------------+-----------------+
| | | | | |
+--------------------------+-------------+--------------+-------------+-----------------+
| Opening | 57,842,753 | (57,436,518) | (12,857) | 393,378 |
| balance | | | | |
+--------------------------+-------------+--------------+-------------+-----------------+
| | | | | |
+--------------------------+-------------+--------------+-------------+-----------------+
| Exchange differences | | | (68,885) | (68,885) |
| arising on translation | | | | |
| of foreign currency | | | | |
+--------------------------+-------------+--------------+-------------+-----------------+
| Total recognized | | 12,852,003 | (68,885) | (68,885) |
| directly in equity | | | | 12,852,003 |
| Profit for the period | | | | |
+--------------------------+-------------+--------------+-------------+-----------------+
| | | | | |
+--------------------------+-------------+--------------+-------------+-----------------+
| Closing | 57,842,753 | (44,584,515) | (81,742) | 13,176,496 |
| balance | | | | |
+--------------------------+-------------+--------------+-------------+--------+--------+
+-----------------------------------+----+-----+----+---------------+--------------------+
| Issued capital | | | | No. |
+-----------------------------------+----+-----+----+---------------+
| | | | | |
+-----------------------------------+----+-----+----+---------------+
| Number at 1 July 2008 | | | | 228,241,387 |
+-----------------------------------+----+-----+----+---------------+
| Shares issued during period | | | | - |
+-----------------------------------+----+-----+----+---------------+
| Number at 31 December 2008 | | | | 228,241,387 |
+-----------------------------------+----+-----+----+---------------+
| | | | | |
+-----------------------------------+----+-----+----+---------------+
| Fully paid ordinary shares carry one vote per share and carry the right to |
| dividends. |
+-----------------------------------+----+-----+----+---------------+--------------------+
8 Reconciliation of loss from ordinary activities after related income tax to
net cash flows from operating
activities
+---------------------------------------+--+--------------+--------------+--------------+
| | | Unaudited | Unaudited | Audited |
| | | 31 December | 31 | 30 June |
| | | 2008 | December | 2008 |
| | | A$ | 2007 | A$ |
| | | | A$ | |
+---------------------------------------+--+--------------+--------------+--------------+
| Profit(Loss) from ordinary activities | | 12,852,003 | (26,672,413) | (28,488,291) |
| after related income tax | | | | |
+---------------------------------------+--+--------------+--------------+--------------+
| Depreciation | | 30,331 | 30,085 | 58,277 |
+---------------------------------------+--+--------------+--------------+--------------+
| Net unrealised foreign exchange | | (34,496) | (8,064) | 101,179 |
| loss/(gain) | | | | |
+---------------------------------------+--+--------------+--------------+--------------+
| Interest received | | (25,675) | (95,057) | (143,337) |
+---------------------------------------+--+--------------+--------------+--------------+
| Non-cash interest | | 14,813- | 23,891 | - |
+---------------------------------------+--+--------------+--------------+--------------+
| Loss on disposal | | - | - | 3,854 |
+---------------------------------------+--+--------------+--------------+--------------+
| Impairment of non-current asset | | (13,266,500) | 24,880,553 | 24,880,532 |
+---------------------------------------+--+--------------+--------------+--------------+
| Decrease/(increase) in current | | 126,647 | (18,955) | (331,767) |
| receivables | | | | |
+---------------------------------------+--+--------------+--------------+--------------+
| Decrease/(increase) in current | | 51,067 | 56,925 | 57,280 |
| prepayments | | | | |
+---------------------------------------+--+--------------+--------------+--------------+
| Increase/(decrease) in current | | 215,190 | (720,420) | (302,232) |
| payables | | | | |
+---------------------------------------+--+--------------+--------------+--------------+
| (Decrease)/increase in provisions | | 15,111 | (18,226) | (20,185) |
+---------------------------------------+--+--------------+--------------+--------------+
| Net cash used in operating activities | | (21,509) | (2,541,701) | (4,184,689) |
+---------------------------------------+--+--------------+--------------+--------------+
9 Events after the balance sheet date
There has not been any other matter or circumstance, other than that referred to
in the financial statements or notes thereto (in particular, Note 5 relating to
the impact of the sale of Virosome after the balance sheet date and the special
interim dividend of 1p per Ordinary Share paid on 8 May 2009) that has arisen
since the end of the financial period, that has significantly affected, or may
significantly affect, the operation of the Group, the results of those
operations, or the state of affairs of the Group in the future financial
periods.
END
This information is provided by RNS
The company news service from the London Stock Exchange
END
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