Final Results

Ardana PLC 29 June 2005 Ardana: Preliminary Announcement for the year ended 31 March 2005 Ardana plc (LSE: ARA) today announces its Preliminary Results for the year ended 31 March 2005. Ardana is an emerging pharmaceutical company focused on the discovery, development and marketing of innovative products to improve human reproductive health, and to address areas of considerable unmet need in this $23.8 billion market. Ardana's listing on the Official List of the London Stock Exchange on 9 March 2005 comprised a total of 16,400,000 shares at 128 pence per share, corresponding to gross proceeds for the Company of £21 million (£18.5 million net of expenses). Highlights Financial - Successful listing on the Official List of the London Stock Exchange in March 2005, raising £18.5 million (net of expenses) - Series B £9 million fund raising completed May 2004 - Loss before tax for the year ended 31 March 2005 of £8.4 million (2004: £15.2 million) - Cash and liquid resources at 31 March 2005 of £29.2 million (2004: £11.2 million) Product - Invicorp(TM) licensed-in for Europe (June 2004) - Striant(TM) SR launched in the UK (June 2004) - European mutual recognition process for Striant(TM) SR completed (October 2004) Pipeline - Positive results in Phase II trial of Teverelix in Prostate cancer (SC) (February 2005) Corporate - MRC collaboration agreement extended to July 2008 (December 2004) - Mr Simon Best appointed Chairman (April 2004) - Dr Maureen Lindsay appointed Chief Executive Officer (April 2004) - Mr Graham Lee appointed Chief Financial Officer (May 2004) - Dr John Brown appointed as Non Executive Director (May 2004) Post Balance Sheet events - Positive results in Phase I trial of Oral Growth Hormone Secretagogue (April 2005) - Positive results in Phase II trial of Teverelix in Prostate Cancer (IM) (May 2005) - Positive results in Phase II trial of Teverelix in BPH (May 2005) - Agreement with Cytochemia AG, German marketing partner for Striant(TM) SR (June 2005) - Ms Carol Ferguson appointed as Non Executive Director (June 2005) Dr Maureen Lindsay, CEO, commented '2004 has been a milestone year for Ardana in terms of making significant progress towards our objective of building a successful pharmaceutical business in the field of reproductive health. Our UK sales and marketing team is in place and our first product, Striant(TM) SR has been launched. A second product, Invicorp(TM), is undergoing European Mutual Recognition to enable marketing to commence, and our development programmes are all progressing well. We are confident that we will be able to build on this successful beginning as a public company and continue to deliver good news on a number of fronts during the coming year.' Enquiries For more information contact: Maureen Lindsay + 44 (0) 131 226 8550 Ardana Julia Phillips/Davina Langdale +44 (0)20 7831 3113 Financial Dynamics (corporate and financial media relations): Nicki Brimicombe + 44 (0)1883 732353 NB Public Relations (trade and technical media relations): Notes for Editors Ardana plc is an emerging pharmaceutical company focused on the development and marketing of innovative products to improve human reproductive health, a $23.8 billion market*. Ardana's strategy is to manage risk by maintaining a broad and balanced product pipeline through its network of leading research institutions and through the acquisition of products and intellectual property rights. The Company's four lead products reflect this strategy: Striant(TM) SR, a testosterone replacement therapy that has already been by launched by Ardana through its own specialist sales force in the UK as a treatment for men with primary or secondary hypogonadism; Teverelix LA, in development for three initial indications (prostate cancer, benign prostatic hyperplasia (BPH) and endometriosis); Testo Bi-gel, a dermal testosterone delivery system to treat male hypogonadism, which will shortly enter Phase II trials; and Invicorp, a combination drug treatment for male erectile dysfunction, for which the Company has marketing and manufacturing rights in Europe. In addition, Ardana has a strong portfolio of follow-on products in development. Prior to flotation, Ardana raised in excess of £43 million in four funding rounds from investors including DVC Deutsche Venture Capital, Albany Venture Managers Limited and 3i Bioscience Investment Trust, Merlin Biosciences Limited, MVM Limited (MVM), Techno Venture Management (TVM), ABN-AMRO Participates, 3i Group plc, ISIS Equity Partners plc, Scottish Widows Investment Partnership Ltd, Saffron Hill Ventures, Mitsubishi Corporation and Green Highlander, LLC. For further information please see www.ardana.co.uk *Source: IMS Retail Drug Monitor October 2004: key drug purchases in the 12 months to October 2004 for the Genito-Urinary and Hormone classes Statements contained within this press release may contain forward-looking comments which involve risks and uncertainties that may cause actual results to vary from those contained in the forward-looking statements. In some cases, you can identify such forward-looking statements by terminology such as 'may', ' will', 'could', 'forecasts', 'expects', 'plans', 'anticipates', 'believes', ' estimates', 'predicts', 'potential', or 'continue'. Predictions and forward-looking references in this press release are subject to the satisfactory progress of research which is, by nature, unpredictable. Forward projections reflect management's best estimates based on information available at the time of issue. CHAIRMAN'S STATEMENT Ardana's development has been rapid since its inception in 2000. We have now raised over £60 million in a series of fund raisings and have entered an exciting new phase as a publicly-listed Company. Since its inception Ardana has focused on the key therapy areas of reproductive health, specifically encompassing reproductive endocrinology, urology, sexual dysfunction, gynaecology and obstetrics. Ardana's success to date has been achieved by maintaining this strategic focus, developing a cost effective operating model and ensuring that it delivers on its promises. This financial year proved to be another busy year in the building and development of the Company and the business. The Chief Executive's Statement details the development of the business achievements in the year, of which the following have been key: 1. Launch of Striant(TM) SR 2. In-license of Invicorp(TM) 3. Acquisition of Bi-Gel technology patents 4. Clinical development of Teverelix LA The Group's strategy includes continued investment in its research capabilities and I am pleased to say that we concluded a new three year agreement with the UK Medical Research Council (MRC) in December 2004 which gives Ardana exclusive rights to commercialise selected research areas in the MRC Human Reproductive Sciences Unit (HRSU) in Edinburgh, Scotland. This contract is a refinement of the five-year agreement that Ardana secured on its inception in 2000. The partnership will also afford the HRSU additional funding for selected projects and help it to meet the objective of translating basic research on human reproduction into tangible health benefits. The HRSU, which employs over 100 staff, is recognised by the World Health Organisation as one of the leading academic centres of excellence in reproductive biology in the world and it has been at the forefront of this area of research for the last 30 years. The HRSU has already contributed a series of exciting and innovative early stage projects to the Ardana pipeline, the most advanced of which is a novel prostate cancer therapy which has promise but is still in pre-clinical evaluation. This deal ensures that we will continue to benefit from the HRSU's unique expertise in those areas of strategic importance to Ardana. The Board continues to evolve with the Company. I would like to thank David Brister and Hubert Birner, our outgoing Non-Executive Directors, for the support, advice and encouragement they have given the Company over the last few years. We are now in the process of increasing the number of Non-Executive Directors and I am pleased to welcome Carol Ferguson to the Board. Following our successful listing in March 2005 Ardana has entered an exciting new phase. I believe we are well positioned to meet the challenges that face us. The Board of Directors and I look forward to delivering our key strategic aims and generating value for our shareholders. CHIEF EXECUTIVE'S STATEMENT Since Ardana's foundation in 2000, we have pursued a four-part strategy to create value within the business by: • Maintaining a broad and balanced portfolio to manage risk, focusing on the therapeutic area of human reproductive health; • Actively pursuing an in-licensing and acquisition programme for products and technologies to maintain a robust pipeline, including near-term commercial products and potential high value development candidates; • Retaining value within the Ardana Group by building a sales and marketing capability in leading European markets, through both our own infrastructure and partnerships; and • Maintaining a lean organisation by selective outsourcing in order to achieve flexibility. During the last year we have successfully achieved our goals towards the delivery of this strategy. Our clinical trials have progressed well for all our compounds in development. In June we acquired a license to market Invicorp(TM) in Europe and acquired the EU patent for BiGel. We set up the UK sales team and launched our first product Striant(TM) SR in June. On the research side, in December we agreed an extension to the collaboration deal with the MRC for another three years, our work with the University of Montreal progresses well and we have initiated support for the University of Manchester. On the financial front we completed our last private funding round in May 2004 which we followed up with the successful launch onto the London Stock Exchange's main market in March 2005. Our achievements and financing have allowed us to expand our management team. In addition to setting up the sales team we have filled other key positions within the organisation in support of our clinical development, manufacturing and marketing activities. Ardana's strategy is to manage risk by continuing to maintain a broad and balanced pipeline of products and product candidates through relationships with leading research institutions and the acquisition of products and intellectual property rights. We have already established a targeted sales force in the UK and it is our intention to establish a specialist sales and marketing infrastructure in the five largest European markets to support the future launch of additional products, as and when commercially appropriate. It is intended that this infrastructure will be in place to support the launch of Teverelix LA in Europe. We believe that having our own sales and marketing capability will allow us to keep more value in the Company for the benefit of our shareholders. In the interim, commercialisation will be by a combination of our own sales teams and strategic partnerships. Currently, Ardana's key customers are endocrinologists and urologists and, as the portfolio expands, the customer profile will include other reproductive health specialists such as obstetricians and gynaecologists. These groups of clinicians are a small, well circumscribed group, easily addressed by a small team of sales representatives. Ardana's portfolio of products continue to progress well at each stage of their development. Striant(TM) SR An effective, unique and innovative controlled-release buccal tablet containing 30 mg of testosterone indicated for testosterone replacement therapy in men with hypogonadism, the most common hormone deficiency in men. The Striant(TM) SR tablet is applied to the gum above the front incisor tooth, providing a novel method of delivery compared with existing testosterone replacement products. In April 2004, marketing authorisation was granted for this product in the UK, where Ardana commenced commercial sales in June 2004. Striant(TM) SR has received a positive opinion under the Mutual Recognition Procedure in several other European countries. Ardana intends to roll-out the sale and distribution of Striant(TM) SR across European-licensed territories on a country-by-country basis through local partners, starting with Germany in 2005. Ardana announced in June 2005 the appointment of Cytochemia AG to market and distribute Striant(TM) SR in Germany under licence. Teverelix LA A long-acting formulation of a GnRH antagonist that binds with a receptor in the pituitary gland, to provide dose-dependent control of the release of sex hormones such as testosterone in men and oestrogen in women. GnRH is considered to be the master switch by which the body controls the production of sex hormones. The benefit of Teverelix LA is that its mode of action means that it can be used both as an ''on/off'' and ''dimmer'' switch for hormone release. This is important in those diseases where the progression of the disease relies on a supply of the sex hormones. Thus for the malignant diseases Teverelix LA can switch off and stop the production of either testosterone or oestrogen and for the benign diseases it can reduce (or 'dim') the levels of the sex hormones in a dose dependent manner thus alleviating the effects of the disease without causing the side-effects of castration. Ardana is developing Teverelix LA initially to treat three major indications: • prostate cancer • benign prostatic hyperplasia (BPH) • endometriosis. In trials conducted to date, Teverelix LA has shown to be well tolerated and demonstrates a dose-dependent reduction of testosterone in men and oestradiol in women. Teverelix LA - Prostate Cancer In February and May 2005 we announced successful results from two Phase II studies of Teverelix LA in patients with advanced prostate cancer. The progression of prostate cancer is driven by male sex hormones (androgens) such as testosterone. It is widely accepted that reducing levels of these hormones in advanced disease can help slow the growth of the cancer and prolong survival. The production of testosterone can be reduced either surgically, with the removal of the testicles, or through medicines that affect production of testosterone. These studies confirmed that Teverelix LA can attain and maintain suppression of testosterone to castration levels in patients with advanced prostate cancer, is generally well tolerated and was also shown to rapidly reduce and normalise PSA (Prostate Specific Antigen) levels, a biological marker that is elevated in most patients with prostate cancer. These studies give Ardana further insight into how Teverelix LA should be used to achieve the optimal clinical effect in the treatment of prostate cancer, which is widely acknowledged to be a multi-billion dollar market. We believe that this compound has considerable potential in the treatment of the disease, and will now enter a longer term Phase II clinical trial with a potential product launch by the end of 2009. Teverelix LA - Benign Prostatic Hyperplasia (BPH) In May 2005 we announced successful results from a Phase II study of Teverelix LA in patients with Benign Prostatic Hyperplasia (BPH). Teverelix LA demonstrated statistically significant symptomatic improvements, increasing over the time of the study. In addition, statistically significant improvements were seen in maximum urine flow rates, prostate size and patient's quality of life. BPH is a common benign disease occurring in men over the age of 50, and increases in prevalence with age. BPH is characterised by an enlargement of the prostate gland, which results in urinary flow problems such as hesitancy, weak or interrupted stream, urgency and more frequent urination, especially at night. The growth of prostatic tissue is driven by male sex hormones (known as androgens), primarily testosterone and its more potent metabolite dihydrotestosterone (DHT). Reducing levels of these hormones can reduce the size and growth of the prostate. In previous clinical studies, Teverelix LA has been shown to decrease testosterone and subsequently DHT in a dose-dependent manner. Therefore, Teverelix LA can reduce testosterone levels to the low end of the normal range, avoiding a chemical castration and its related symptoms. We are very encouraged by this study which provides proof of concept of Teverelix LA as a potential treatment for BPH. This trial demonstrated that Teverelix LA was well tolerated, without any signs of allergic reactions, and caused a rapid and prolonged improvement of the symptoms of BPH. These findings suggest that Teverelix LA, administered by subcutaneous injection two to three times per year, could be used not only for the improvement of BPH symptoms but also to delay the progression of BPH. We believe that this compound has considerable potential in the treatment of BPH which currently has a substantial pharmaceutical market worth €3.9 billion per annum. A second and longer term Phase II clinical trial for BPH is expected to commence in H2 2005. Teverelix LA - Endometriosis Endometriosis is a hormone responsive condition arising in women in which the tissue lining the uterus (the endometrium) is deposited outside the uterus. This can potentially develop into cysts, which are usually benign but can cause pain and is associated with heavy menstruation and infertility. Reducing levels of female sex hormones (ie oestrogen) can cause endometrial growths to shrink. Our first Phase I trial completed this year showed that Teverelix LA can decrease oestrogen in a dose-dependent manner. The first Phase II trial to demonstrate clinical proof-of-concept in patients is expected to commence in H1 2006. Testo Bi-gel Testo Bi-gel is a trans-dermal testosterone delivery system being developed for the treatment of male hypogonadism. Testo Bi-gel is formulated as a cream consisting of both oil-based and water-based gel substances together with the active ingredient, testosterone. We believe this product offers important advantages over existing gel-based testosterone products and that clinical proof of concept has been established through a successful feasibility study completed this year. Although used to treat the same condition, we believe Testo Bi-gel addresses a different market segment than Striant(TM) SR as it offers a dermal rather than oral application. Phase II clinical trials of Testo Bi-gel are expected to commence during H2 2005. Invicorp(TM) We acquired Invicorp(TM) in June 2004 from Senetek plc for the European market. It is an injectable treatment for erectile dysfunction. Marketing authorisation for Invicorp(TM) has been granted in Denmark and we intend to initiate European mutual recognition proceedings in 2005. Oral GHS We have been conducting early stage clinical development on an oral formulation of a Growth Hormone Secretagogue, EP01572, which is potentially useful as a treatment for growth hormone deficiency disorders and metabolic complications associated with critical illness. The results of the Phase I trial announced in April 2005 showed that EP01572 stimulates growth hormone release in a selective manner and was well tolerated. We shall now be progressing the compound into Phase II clinical trials. The growth hormone market is worth about €2 billion per annum worldwide and as the majority of products are injectables we believe that EP01572 will offer an attractive alternative for patients. Terbutaline Vaginal Gel We are currently conducting Phase II trials on a form of Terbutaline formulated as a bio-adhesive vaginal gel for use as treatment for infertility linked to endometriosis. We expect the results from this trial to be available during H1 2006. Other products Our business development team, alongside expanding our portfolio in the field of reproductive medicine, continues to look to create value by out-licensing other compounds that we own which are not core to our strategy. Operationally we continue to maximise value and manage risk in the business through our flexible and low cost business model. We are strategically building our sales and marketing capability across Europe with our lead commercial product Striant(TM) SR, to be followed by Invicorp(TM) and Testo BiGel, so that we can build a solid relationship with our customers, understand the market and demonstrate Ardana's commitment to the area in advance of the launch of Teverelix in the larger indications. We are rapidly expanding our partnerships in research, regulatory and manufacturing, all of whom are directed by our in house team of experienced managers. Our intention is to ensure that Teverelix, Testo BiGel and GHS are optimally developed and marketed worldwide. To this end we are looking for partners to commercialise the products outside Europe and it is our intention to have a collaboration deal for Teverelix LA in the first half of 2006. We are very pleased to have successfully completed our launch onto the London Stock Exchange and by the response we have received from investors and potential investors to the Ardana story. With £18.5 million raised in the IPO, we are in excellent shape to continue our investment in progressing our product development programmes, as well as commercialising our first products as they come to market in key European territories. We have achieved a great deal in the relatively short period of time since Ardana was founded in 2000, and we look forward to meeting the challenges that will face us as we further develop and expand the business. Anticipated news flow H2 2005 FDA meeting on Teverelix LA in prostate cancer and BPH. H2 2005 Results from Phase II trial of Testo BiGel H2 2005 Announcement of further European partners for Striant(TM) SR H1 2006 Results from Phase II trial of Terbutaline H1 2006 Teverelix LA collaboration Unaudited consolidated profit and loss account For the year ended 31 March 2005 Notes Unaudited Unaudited Year ended Year ended 31 March 2005 31 March 2004* £ £ TURNOVER 84,013 88,959 Cost of Sales (10,746) - ______ ______ GROSS PROFIT 73,267 88,959 Research and development costs (4,010,545) (12,439,031) Other operating costs (5,094,842) (3,272,594) ______ ______ Total operating costs (9,105,387) (15,711,625) Other operating income 78,560 - Exchange gain 5,348 132,080 ______ ______ Operating loss (8,948,212) (15,490,586) Net interest receivable 523,359 273,559 ______ ______ LOSS ON ORDINARY ACTIVITIES BEFORE TAXATION (8,424,853) (15,217,027) Tax on loss on ordinary activities 478,556 466,112 ______ ______ LOSS FOR THE YEAR (7,946,297) (14,750,915) ______ ______ Loss per share (basic and diluted) 5 (20.5p) (49.2p) * Refer to Basis of Preparation in Note 1. The results for the year shown above are derived entirely from continuing activities. Unaudited consolidated balance sheet As at 31 March 2005 Notes Unaudited Unaudited 31 March 2005 31 March 2004* £ £ FIXED ASSETS Tangible assets 32,394 34,149 ______ ______ CURRENT ASSETS Stocks 107,271 - Debtors 2 1,307,882 1,029,396 Cash at bank and in hand (including liquid 29,181,946 11,153,607 resources) ______ ______ 30,597,099 12,183,003 Creditors: Amounts falling due within one year 3 (3,840,737) (3,302,307) ______ ______ NET CURRENT ASSETS 26,756,362 8,880,696 ______ ______ TOTAL ASSETS LESS CURRENT LIABILITIES 26,788,756 8,914,845 Creditors: Amounts falling due after more than one 4 (1,373,249) (3,006,213) year ______ ______ NET ASSETS 25,415,507 5,908,632 ______ ______ CAPITAL & RESERVES Called-up share capital 555,628 155,543 Share Premium 26,948,599 - Merger reserve 34,451,498 34,451,498 Own shares (100,788) (135,276) Profit and loss account (36,439,430) (28,563,133) ______ ______ TOTAL EQUITY SHAREHOLDERS FUNDS 25,415,507 5,908,632 ______ ______ * Refer to Basis of Preparation in Note 1. Unaudited consolidated cash flow statement Year ended 31 March 2005 Unaudited Unaudited Year ended Year ended 31 March 31 March 2004* 2005 £ £ Net cash outflow from operating activities (10,304,601) (9,672,320) ______ ______ Returns on investments and servicing of finance Interest received 523,450 273,748 Interest paid (91) (189) ______ ______ Net cash inflow from returns on investments and 523,359 273,559 servicing of finance Net cash inflow from taxation 383,774 123,405 ______ ______ Capital expenditure Purchase of tangible fixed assets (35,824) (36,984) Sale of tangible assets 8,459 37,857 Net sale of investments 104,488 47,224 ______ ______ Net cash inflow from capital expenditure 77,123 48,097 ______ ______ Net cash inflow from management of liquid resources Increase on amounts placed on short term deposit (17,958,923) (6,733,517) Financing Ordinary share capital issued 27,348,684 15,999,995 ______ ______ Increase in cash in year 69,416 39,219 ______ ______ * Refer to Basis of Preparation in Note 1. Notes to the Financial Information 1. The financial information disclosed in the announcement does not constitute the Company's statutory accounts for the year ended 31 March 2005, which will be finalised on the basis of the financial information set out by the directors in this preliminary announcement and delivered to the Registrar of Companies after the Company's Annual General Meeting in September 2005. The financial information for the year ended 31 March 2004 is derived from the statutory accounts of Ardana Bioscience Limited for that year and which have been delivered to the Registrar of Companies. The auditors reported on the accounts of Ardana Bioscience Limited for the year ended 31 March 2004; their report was unqualified and did not contain a statement under S237(2) or (3) of Companies Act 1985. On 5 May 2004, Ardana Limited acquired the entire issued share capital of Ardana Bioscience Limited in exchange for the issue of shares to shareholders on a one-for-one basis. The restructuring represented a change in identity of this Company, being the holding company, rather than an acquisition of the business. The restructuring has been accounted for using merger accounting and so the financial information is presented as if the Company and its subsidiaries had always been part of the same group. The results and cash flows of the entities are combined from the beginning of the year in which the merger occurred and their assets and liabilities are combined at the amounts at which they were previously recorded. The comparatives are presented as if the companies in the Ardana plc Group had been owned and controlled by the Company throughout the year ended 31 March 2004. 2. Debtors 31 March 31 March 2005 2004 (unaudited) (unaudited) £ £ Trade debtors 33,619 19,039 Other debtors 140,113 82,350 Tax credit recoverable 944,668 849,886 Prepayments and accrued income 189,482 78,121 _____ _____ 1,307,882 1,029,396 _____ _____ 3. Creditors: Amounts falling due within one year 31 March 31 March 2005 2004 (unaudited) (unaudited) £ £ Trade creditors 1,089,046 866,696 Deferred consideration 1,716,561 1,670,118 Other taxes and social security 160,143 39,074 Other creditors and accruals 874,987 726,419 ______ ______ 3,840,737 3,302,307 ______ ______ 4. Creditors: Amounts falling due after more than one year 31 March 31 March 2005 2004 (unaudited) (unaudited) £ £ Deferred consideration 1,373,249 3,006,213 ______ ______ 5. Loss per share is based on the loss on ordinary activities after taxation as shown in the consolidated profit and loss account and on the weighted average number of ordinary shares in issue of 38,717,240 (2004: 29,998,974). The weighted average number of shares in issue in 2004 has been re-stated to take account of the rebasing in February 2005. 6. Reconciliation of movements in shareholders' funds 31 March 31 March 2005 2004 (unaudited) (unaudited) £ £ (Loss)/profit for the financial year (7,946,297) (14,750,915) New shares issued 27,348,684 19,999,995 Net movement in own shares 34,488 47,224 Gain on sale of EBT shares 70,000 - _____ _____ Net increase in shareholders' funds 19,506,875 5,296,304 Opening shareholders' funds 5,908,632 612,328 _____ _____ Closing shareholders' funds 25,415,507 5,908,632 _____ _____ 7. The directors do not propose a dividend for the period (2004: £Nil). This information is provided by RNS The company news service from the London Stock Exchange

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