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8 September 2009

Reliance GeneMedix plc

Results for the 12 month period ended 31 March 2009

Reliance GeneMedix plc ('Reliance GeneMedix' or the 'Company'), the AIM listed biopharmaceutical company, which is part of the Reliance Life Sciences Group ('Reliance Life Sciences' or 'RLS'), announces its results for the year ended 31 March 2009.

Highlights

• Good progress in the clinical development of Epostim in the EU

• Supply of Epostim to RLS for the Indian market

• Streamlining of manufacturing operations at Tullamore

• Joint development of second biosimilar, G-CSF, with RLS

Vinay Ranade, Chief Executive Officer of Reliance GeneMedix plc, commented

'The lead development programme of Reliance GeneMedix for the EU market has progressed well during the year and the Company is well positioned to initiate its second product development programme (G-CSF) for the EU market with support from Reliance Life Sciences.'

ENQUIRIES:

Reliance GeneMedix plc	Tel: +353 57 932 3572
Vinay Ranade, Chief Executive Officer
Deloitte Corporate Finance	Tel: 020 7936 3000
Jonathan Hinton, John Ball
Lothbury Financial Limited	Tel: 020 7011 9411
Michael Padley

  

Chief Executive Officer's statement

Background

Reliance GeneMedix is a globally focused biopharmaceutical company, specialising in the development and manufacture of high quality, cost effective treatments for some of the world's most serious diseases. The Company is working towards the development, production and marketing of a portfolio of biosimilar recombinant therapeutic proteins for global markets.

Business overview

I am pleased to present the results for the past financial year, during which the Company has achieved significant progress on its development programme for its lead product, Erythropoietin (EPO). The Company continues its efforts of completing the clinical development and obtaining approval for EPO in the EU. The Company has obtained marketing approval for EPO in India. During the past financial year, the Company produced a high quality EPO product at its facility in Tullamore, Ireland and also supplied EPO to Reliance Life Sciences for the Indian market. During the year, the Company has also made progress in its second product development programme for Granulocyte Colony Stimulating Factor (G-CSF).

In this period of changed macro-economic environment, the Company has proactively implemented various cost saving projects to conserve cash as well as enhance competitiveness in the long run. EPO is being marketed by Reliance Life Sciences under the brand name Relipoietin and has been received well by Indian customers. The Company has also collaborated with Reliance Life Sciences to work on a strategy for launching EPO in other markets. It is the view of the Directors that the Company has and will continue to benefit from its close collaboration with Reliance Life Sciences.

In view of the ongoing focus on the clinical development programme and planned activity at the manufacturing site, the Company implemented a restructuring exercise after the year end. This has helped the Company align its human resources to the planned projects and manufacturing activities and has resulted in significant cost reduction, the benefits of which are expected to be seen in the current financial year. 

Financial review

Operating losses of €4.014 million for the financial year are in line with budget and reflect planned expenditure. The Company continues to exercise a strict control on costs in order to help conserve cash.

The Company has capitalised development expenditure of €5.409 million (2008: €2.809 million) incurred on the EPO development programme. Current assets and current liabilities are in line with the level of operations of the Company.

The expenditure during the year was financed through additional investment by Reliance Life Sciences. Reliance Life Sciences has committed to invest a further £13.20 million and it is envisaged that this investment would be sufficient to finance the Company's current programmes.

Board changes

A notable change in the board has been the appointment of Mr. Dileep Choksi, as a Non-Executive Director and chairman of the audit committee. This was necessitated due to the unfortunate death of Mr. R. S. Lodha. Mr. Dileep Choksi is a finance expert with 35 years of experience and the Company expects to utilise Mr. Choksi's advice in its strategy to achieve commercial efficacy. 

Mr. Gerhard Klement resigned from the board during the year. The Company expresses its gratitude for his contribution and wishes him well for the future.

Employee commitment

Finally, I would like to thank the dedicated staff of the Company for their continued hard work. Their contribution has helped the Company make significant progress in all its programmes. We look forward to their ongoing commitment for meeting the challenges that lie ahead. The Board is committed to implement programmes for training and rewarding employees to motivate them to excel.

Corporate governance

The Board has established an Audit Committee, Remuneration Committee and Nominations Committee with formally delegated duties and responsibilities. 

The Audit Committee consists of all the independent Non-Executive Directors and is chaired by Mr. Dileep Choksi. The Audit Committee normally meets twice a year and has responsibility for, among other things, planning and reviewing the annual report and accounts and interim statements and involving, where appropriate, the auditors. The Committee also approves auditors' fees, reviews auditor independence and focuses on compliance with legal requirements and accounting standards. It is also responsible for ensuring that an effective system of internal controls is maintained. The ultimate responsibility for reviewing and approving the annual accounts and interim statement remains with the Board.

The Remuneration Committee is made up of all the independent Non-Executive Directors and is chaired by Dr R. A. Mashelkar. The Remuneration Committee, which meets as required, but at least once a year, has responsibility for making recommendations to the Board on the compensation of senior executives and determining, within agreed terms of reference, the specific remuneration packages for each of the Executive Directors.

The Nominations Committee comprises the Chairman and all of the independent Non-Executive Directors and is chaired by Dr R. A. Mashelkar. The Nominations Committee has responsibility for reviewing the size and composition of the Board and the appointment of replacement and or additional directors and making appropriate recommendations to the Board.

Vinay Ranade

Chief Executive Officer

  Consolidated Income Statement

For the year ended 31 March 2009

	Year  ended 31 Mar 2009	Year  ended 31 Mar 2008
	€'000	€'000
		Restated
Continuing operations
Revenue	608	-
Cost of sales	(608)	-
Gross profit	-	-
Research and development costs	(423)	(3,298)
Administrative expenses	(3,591)	(4,222)
Operating loss	(4,014)	(7,520)
Finance income	34	477
Finance costs	(85)	(142)
Other income	-	59
Loss before taxation	(4,065)	(7,126)
Taxation	1,297	433
Loss for the year	(2,768)	(6,693)
Loss per ordinary share
Basic	(1.8c)	(4.3c)
Diluted	(1.8c)	(4.3c)

  Consolidated Balance Sheet

As at 31 March 2009

	31 Mar 2009	31 Mar 2008
	€'000	€'000
		Restated
ASSETS
Non-current assets
Intangible fixed assets	8,246	2,840
Property, plant and equipment	3,521	4,201
Investment at cost	10	10
Deferred tax assets	1,730	433
	13,507	7,484
Current assets
Inventories	647	520
Trade and other receivables	768	1,269
Restricted cash	176	203
Cash and cash equivalents	169	3,309
	1,760	5,301
LIABILITIES
Current liabilities
Trade and other payables	(2,327)	(2,100)
Borrowings	(1,217)	(1,329)
	(3,544)	(3,429)
Net current (liabilities)/assets	(1,784)	1,872
Total assets less current liabilities/net assets	11,723	9,356
Shareholders' equity
Share capital	22,305	22,305
Share premium	39,538	39,538
Shares to be issued	5,134	-
Other reserves	3,977	3,977
Retained losses	(59,231)	(56,464)
Total shareholders' equity	11,723	9,356

  

Company Balance Sheet

As at 31 March 2009

	31 Mar 2009	31 Mar 2008
	€'000	€'000
		Restated
ASSETS
Non-current assets
Intangible fixed assets	8,246	2,840
Property, plant and equipment	3,521	4,201
Investment at cost	10	10
Deferred tax assets	1,730	433
	13,507	7,484
Current assets
Inventories	647	520
Trade and other receivables	768	1,269
Restricted cash	176	203
Cash and cash equivalents	169	3,309
	1,760	5,301
LIABILITIES
Current liabilities
Trade and other payables	(2,327)	(2,100)
Borrowings	(1,217)	(1,329)
	(3,544)	(3,429)
Net current (liabilities)/assets	(1,784)	1,872
Total assets less current liabilities/net assets	11,723	9,356
Shareholders' equity
Share capital	22,305	22,305
Share premium	39,538	39,538
Shares to be issued	5,134	-
Other reserves	3,977	3,977
Retained losses	(59,231)	(56,464)
Total shareholders' equity	11,723	9,356

There are no trading entities consolidated and hence there is no difference between consolidated and company accounts.

  Consolidated Statement of Changes in Equity

For the year ended 31 March 2009

	Share capital	Share premium	Shares to be issued	Other reserves	Retained  losses	Total
	€'000	€'000	€'000	€'000	€'000	€'000
Balance at 1 Apr 2007	22,305	39,538	-	4,620	(49,778)	16,685
Loss for the year as originally stated	-	-	-	-	(7,126)	(7,126)
Correction of prior period error (see foot note)	-	-	-	-	433	433
Currency translation adjustment	-	-	-	(643)	-	(643)
Share-based payment	-	-	-	-	7	7
Balance at 31 Mar 2008 as restated	22,305	39,538	-	3,977	(56,464)	9,356
Loss for the year	-	-	-	-	(2,768)	(2,768)
Receipts for new shares to be issued	-	-	5,134	-	-	5,134
Share-based payment	-	-	-	-	1	1
Balance at 31 Mar 2009	22,305	39,538	5,134	3,977	(59,231)	11,723

Company Statement of Changes in Equity

For the year ended 31 March 2009

	Share capital	Share premium	Shares to be issued	Other reserves	Retained losses	Total
	€'000	€'000	€'000	€'000	€'000	€'000
Balance at 1 Apr 2007	22,305	39,538	-	4,620	(49,778)	16,685
Loss for the year as originally stated	-	-	-	-	(7,126)	(7,126)
Correction of prior period error  (see note 2.1)	-	-	-	-	433	433
Currency translation adjustment	-	-	-	(643)	-	(643)
Share-based payment	-	-	-	-	7	7
Balance at 31 Mar 2008 as restated	22,305	39,538	-	3,977	(56,464)	9,356
Loss for the year	-	-	-	-	(2,768)	(2,768)
Receipts for new shares  to be issued	-	-	5,134	-	-	5,134
Share-based payment	-	-	-	-	1	1
Balance at 31 Mar 2009	22,305	39,538	5,134	3,977	(59,231)	11,723

  Consolidated Cash Flow Statement

For the year ended 31 March 2009

	Year ended 31 Mar 2009	Year  ended  31 Mar 2008
	€'000	€'000
Cash flow from operating activities
Net Cash used in operating activities	(2,507)	(7,577)
Cash flows from investing activities:
Payments for plant and equipment	(319)	(451)
Payments for intangible assets	(5,409)	(2,809)
Interest received	70	493
Proceeds from disposal of subsidiary	-	1,114
Payments for investments	-	(10)
Decrease/(increase) in restricted cash	27	(24)
Net cash flows used in from investing activities	(5,631)	(1,687)
Cash flows from financing activities:
Proceeds from exercising share warrants  (shares to be issued)	5,134	-
Net decrease in cash and cash equivalents	(3,004)	(9,264)
Cash and cash equivalents at the beginning of year	3,309	13,116
Net currency translation effect	(136)	(543)
Cash and cash equivalents	169	3,309

  Company Cash Flow Statement

For the year ended 31 March 2009

	Year ended 31 Mar 2009	Year  ended  31 Mar 2008
	€'000	€'000
Cash flow from operating activities
Net Cash used in operating activities	(2,507)	(7,577)
Cash flows from investing activities:
Payments for plant and equipment	(319)	(451)
Payments for intangible assets	(5,409)	(2,809)
Interest received	70	493
Proceeds from disposal of subsidiary	-	1,114
Payments for investments	-	(10)
Decrease/(increase) in restricted cash	27	(24)
Net cash flows used in from investing activities	(5,631)	(1,687)
Cash flows from financing activities:
Proceeds from exercising share warrants (shares to be issued)	5,134	-
Net decrease in cash and cash equivalents	(3,004)	(9,264)
Cash and cash equivalents at the beginning of year	3,309	13,116
Net currency translation effect	(136)	(543)
Cash and cash equivalents	169	3,309

Prior period restatement

The Company had tax losses carried forward at both the current and preceding balance sheet dates. On the basis of detailed projections it is considered probable that sufficient taxable profits will be available to enable these losses to be utilised. A deferred tax asset to the extent that it is considered probable that the losses can be utilised, therefore exists at both balance sheet dates. This asset was incorrectly excluded from the financial statements for the year ended 31 March 2008. The financial statements for the year ended 31 March 2008 have been restated to correct this error. This has resulted in a decrease of €432,777 in the loss after tax for the year ended 31 March 2008.

The Company announces that it has posted to shareholders a letter informing them about the Annual General Meeting. The AGM Notice and the Form of Proxy are available on the Company's website at www.genemedix.com. In accordance with AIM Rule 26 the Annual Report and accounts are available on the Company's website at www.genemedix.com. The annual report will be posted to shareholders shortly.

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