Preliminary Results
Evolutec Group PLC
28 February 2006
For immediate release 28 February 2006
EVOLUTEC GROUP PLC
('Evolutec' or 'Company')
PRELIMINARY RESULTS FOR THE YEAR ENDED
31 DECEMBER 2005
Evolutec Group plc (AIM: EVC), the biopharmaceutical company developing novel
products for the treatment of allergic, inflammatory and autoimmune diseases, is
pleased to announce its preliminary results for the year ended 31 December 2005.
Highlights
• Delivered a positive Phase IIa clinical result in allergic rhinitis (hay
fever) with lead development candidate rEV131, showing efficacy (p<0.05) and
rapid onset of action
• Delivered positive preclinical results with rEV576 bringing diversity to
the Company's pipeline
• Partner Merial delivered positive anti-tick result with Evolutec's vaccine
technology in cattle
• Raised a total of £20 million in two placings, strengthening the balance
sheet and allowing investment in the pipeline
• Net cash of £17.6 million at 31 December 2005 (2004: £3.9 million)
• Funding in place to deliver three Phase II results in hay fever,
post-cataract surgery and dry eye in the current year
Mark Carnegie Brown, Evolutec's Chief Executive Officer, commented: '2005 was a
year of substantial scientific, clinical and commercial progress at Evolutec. We
are now positioned to deliver three Phase II results in 2006, which promises to
be an exciting year for the Company.'
A briefing for analysts will be held at 10.30am today (28 February 2006) at the
offices of Buchanan Communications, 45 Moorfields, London EC2Y 9AE.
The briefing will also be webcast live. To connect to the webcast, please go to
the Company's website: http://www.evolutec.co.uk approximately 10 minutes (10:
20am) before the start of the briefing. The webcast will also be available for
replay shortly after the presentation.
For further information:
Evolutec 0118 922 4480
Mark Carnegie Brown, Chief Executive Officer
Nicholas Badman, Chief Financial Officer
www.evolutec.co.uk
Bridgewell Securities Limited 020 7003 3000
Shaun Dobson/Xavier de Mol
Buchanan Communications 020 7466 5000
Mark Court/Tim Anderson/Mary-Jane Johnson
Notes for Editors
About Evolutec
Evolutec is a biopharmaceutical company developing drugs for allergy,
inflammation and autoimmune disease.
Evolutec's lead drug candidate, rEV131 has efficacy in both acute and chronic
respiratory indications including allergic rhinitis (hay fever) and asthma. In
2005, Evolutec announced a positive result for rEV131 in a 112 patient Phase IIa
proof of concept study in allergic rhinitis. rEV131 met the primary efficacy
endpoint (p < 0.05). In addition, rEV131 showed efficacy against mucus and
congestion, the most difficult to treat symptoms of rhinitis as well as a rapid
onset of action.
Evolutec intends to carry out additional proof of concept Phase II trials with
rEV131 in post-cataract surgery and dry eye. Positive preclinical data has also
been generated in asthma. rEV131 is a histamine binding protein and is
understood to be the only product currently in clinical trials that impacts the
recently discovered H4 receptor, a receptor implicated in many forms of
inflammatory disease.
The Company has a further two molecules in preclinical development. rEV576, a
complement inhibitor that was effective in preclinical models of myasthenia
gravis and acute myocardial infarction, and rEV598, which is being evaluated in
carcinoid syndrome and CINV (chemotherapy-induced nausea and vomiting). Evolutec
is working with Merial to develop anti-tick and anti-tick borne disease
vaccines.
Evolutec, which is based in Reading, UK, was founded in 1998 to exploit research
carried out by the Natural Environment Research Council. Evolutec's drugs were
first isolated from the saliva of ticks but are now manufactured by bacterial
fermentation procedures. The tick remains undetected by its hosts, including
humans, by injecting an array of molecules into the skin that suppresses normal
defence mechanisms. These stealth molecules have evolved over millions of years
to enable the tick to take a blood meal from its host. Evolutec employs the
tick's evolutionary stealth technology to offer the potential of treating human
diseases.
Safe Harbour statement: this news release may contain forward-looking
statements that reflect the current expectations of the Company regarding future
events. Forward-looking statements involve risks and uncertainties. Actual
events could differ materially from those projected herein and depend on a
number of factors including the success of the Company's research strategies,
the applicability of the discoveries made therein, the successful and timely
completion of clinical studies, the uncertainties related to the regulatory
process, the successful integration of completed mergers and acquisitions and
achievement of expected synergies from such transactions, and the ability of the
Company to identify and consummate suitable strategic and business combination
transactions.
CHAIRMAN'S REVIEW
The past financial year has been an important one in the development of Evolutec
as the company moves towards its objective of becoming a diversified
biopharmaceutical company capable of the discovery, development and
commercialisation of important therapeutic products. Evolutec made progress an
all fronts as it obtained positive clinical results with its lead product
candidate, rEV131, positive trial results in cattle with its lead vaccine
candidate in collaboration with Merial and exciting preclinical results with
rEV576 in a myasthenia gravis model.
The Company is in a position to make significant progress in the coming year.
Evolutec now has the funds to conduct at least three definitive Phase II
clinical studies on rEV131 during 2006 in a range of respiratory and ophthalmic
indications. Furthermore it can also conduct the work to bring additional
molecules into clinical development. This is due to the strong support that we
received from our investors during two placings that took place in 2005.
Evolutec has recruited a team of experienced individuals to carry out our plans.
The team brings to Evolutec a broad range of expertise in the key areas of
discovery, drug development and business development. This is coupled with an
experienced executive team to provide the leadership skills that Evolutec
requires. The Company has also built up very good relations with a range of
contract organisations both in the US and Europe to use in sub-contracting the
development work. I would like to thank all the individuals both within Evolutec
and our supplier companies who have worked on our projects for their dedicated
efforts in the past year.
In addition to the progress in products and people, Evolutec continues to evolve
rapidly into a significant biotechnology company. The Company has moved its
location to a business park in Reading which we believe is an attractive
location to grow and commercialise our business. The Company has made
significant strides in complying with the regulatory requirements placed on the
Company both as a consequence of its public listing on the AIM Market as well as
those imposed by international regulatory agencies in the drug development
process. Our objective is to meet the highest regulatory standards wherever
possible. In particular, we will be looking to strengthen the Board by the
appointment of an additional Non-Executive Director in the coming year.
Looking forward we expect the Company to deliver significant value to its
shareholders. In addition to the scientific and clinical progress we will be
looking to establish commercial relations with partners in both the
biotechnology and pharmaceutical sectors.
Chief Executive's review of operations
2005 was an important year for Evolutec with the generation of impressive
clinical data in our lead rEV131 indication, encouraging results in the animal
vaccine trials and promising data from the rEV576 preclinical programme. The
company continued to focus investment on rEV131 but began investment in rEV576
to diversify its product development pipeline.
MAIN ACHIEVEMENTS
• Impressive clinical data in a Phase IIa rhinitis trial with rEV131
- Primary endpoint delivered with statistical significance (p<0.05)
- Rapid onset of action
- Good safety
- Dose selection
• Good progress with the cGMP manufacture of rEV131
• Demonstration of a desirable rEV131 metabolic profile
• rEV576 showed promising preclinical results in an acute auto-immune
model and an acute myocardial infarction model
• Significant reduction in tick infestation levels in Merial vaccine
trial
• Recruitment of key personnel in Development, Research and Business
Development
• Relocation to Reading
• £20 million raised before expenses through the placing of 13.4 million
ordinary shares
rEV131 DEVELOPMENT
The most significant event in 2005 for Evolutec's technology has been the
generation of impressive clinical results with rEV131 in seasonal allergic
rhinitis (hay fever). The company delivered all of the following objectives in
completing a 112 patient Phase IIa study:
1. Proof of concept in the lead clinical indication
2. The selection of the optimum dose for further clinical studies
3. The demonstration of safety via the nasal route of administration
The trial met its primary endpoint, a statistically significant difference (p<
0.05) in the mean sum of symptom scores at 15 minutes post allergen challenge
versus placebo. rEV131 showed a dose dependent drug effect enabling selection of
the optimum dose for further work.
There were no significant adverse events during the clinical trial and rEV131
was both comfortable and well-tolerated. These results highlight the potential
of rEV131 in the $6 billion allergic rhinitis market. The next step is to
conduct a multi-dose Phase IIb study to further define the time of onset of
action and the duration of effect which will guide commercial positioning and a
partnering deal for rEV131.
The rhinitis trial was undertaken at two centres in San Antonio, Texas, under
the direction of Dr Paul Ratner, one of the leading experts in the respiratory
field, and was conducted in accordance with the FDA's Guidance for Industry
recommendations. The trial comprised four cohorts of 20 patients (16 active, 4
placebo), with the active patients on ascending single doses of rEV131, followed
by a fifth cohort of 32 patients (16 active, 16 placebo) at the optimum dose. An
antigen challenge of ragweed pollen extract was administered 30 minutes after
nasal dosing.
In addition to meeting the primary efficacy and safety objectives, the results
showed that rEV131 has an onset of action of 45 minutes or less - quicker than
steroid nasal sprays which have an onset of action of approximately 8 hours or
longer. It is highly unlikely that a steroid would have given a positive result
in a single dose trial of this nature because patients require several doses
before symptom relief is noted. Onset of action is one of the key features for a
therapy in this market since this converts directly to patient benefit. The data
suggests a commercial advantage of rEV131 over the nasal steroids which dominate
the market. The main effects of rEV131 were against congestion and mucus
production, symptoms that patients find the most troublesome and which are not
well addressed by oral anti-histamines. The rapid onset of action and efficacy
against congestion and mucus underpin potential commercial advantages of rEV131
and make this an exciting result. Outline results have been accepted for
presentation at the American Academy of Asthma Allergy and Immunology meeting in
Miami Beach 3rd - 6th March 2006.
A Clinical Review Panel was organised to discuss the rEV131 results with several
leading experts in this clinical field. Attendees included Dr. Paul Ratner,
President Sylvana Research Associates San Antonio Texas, Dr. Eli Meltzer,
Clinical Professor of Pediatrics, University of California, San Diego, and
Estelle Simons, Professor, Department of Pediatrics and Child Health and
Department of Immunology, University of Manitoba. The group were impressed by
the positive results and recommended a development strategy that would, if
successful, lead to the approval of the product for clinical use in the USA.
They also recommended initiating clinical studies in asthma.
Initial results from metabolism studies of rEV131 indicate that it has a half
life of approximately 8 hours. This fits well with a once or twice a day drug.
Furthermore the drug is well distributed, without crossing the blood brain
barrier and clears the body relatively quickly without showing signs of tissue
accumulation. This is a desirable metabolic profile for a therapeutic drug.
In terms of drug substance manufacture, Cambrex successfully completed a large
scale engineering run in 2005 and has completed the first manufacturing run of
cGMP material. Limited drug substance availability has impacted the preparation
of the formulated drug product for clinical studies and the nature of studies we
have been able to undertake. The availability of cGMP material now means that
drug substance can be taken off the critical path. All future clinical work will
be undertaken using cGMP material.
Long term safety programmes have been started with rEV131 eye drop and nasal
spray product. Appropriate preservatives have been identified for formulation
development and the antimicrobial and biological activity of these is under
assessment.
As a result, the start of clinical evaluation of rEV131 in the ophthalmic
indications was delayed. The clinical plans for the post cataract and dry eye
trials are well developed and a positive pre-IND meeting was held with the FDA.
The intended IND submissions will be made as soon as possible in 2006 to deliver
results in the second half of the year.
In 2005 the generation of impressive clinical data, a positive metabolic profile
and the production of cGMP material have taken rEV131 closer to becoming a human
therapeutic drug product.
ANIMAL VACCINES
Merial, Evolutec's partner in the animal vaccine arena, completed the cattle
trials in Brazil and demonstrated a significant reduction in Boophilus tick
infestation in cattle with the vaccines. Further reagents have been provided by
Evolutec and Merial are evaluating the vaccines against tick-borne diseases.
This is an important piece of work for the two parties as it will determine the
prospects of the approach for the companion animal market. Evolutec is in
discussion with Merial on the terms of the option agreement.
rEV576 A NEW CLASS OF DRUG WITH POTENTIAL IN AUTOIMMUNE AND INFLAMMATORY
DISEASES
rEV576 has demonstrated promising activity in two different preclinical models.
This preclinical development candidate is a complement C5 inhibitor, a new class
of drug that targets the complement system. Over-activation of the complement
system is implicated in a range of acute and chronic inflammatory conditions
including acute cardiovascular conditions and chronic conditions like rheumatoid
arthritis and myasthenia gravis. In an acute preclinical model of myasthenia
gravis, a single injection of rEV576 completely prevented the onset of symptoms.
This result is superior to that published for another complement inhibitor
currently in Phase II clinical trials. The results of this study were reported
in September at the International Complement Meeting in Heidelberg. Myasthenia
gravis is a chronic condition which results in progressive debilitating muscle
fatigue, respiratory failure and paralysis. There are 32,000 cases of the
disease in the US and 70,000 -100,000 cases worldwide. It is anticipated that
this indication would qualify for orphan drug status and the associated
marketing and development benefits. Evolutec has submitted an application to the
FDA for orphan drug status.
In addition, results were obtained in a preclinical model of acute myocardial
infarction (AMI) where rEV576 significantly (p<0.05) reduced damaged heart
tissue (>25%), even at low doses. In AMI the heart muscle is damaged following
coronary thrombosis and the objective of therapy is to reduce this damage. The
approved thrombolytic drugs re-establish blood flow following heart attack but
do not address damage to the heart tissue. There are approximately one million
cases of acute myocardial infarction per annum in the USA making this a
substantial market opportunity with unmet need. rEV576 has a circulating
half-life that makes it particularly suitable for acute conditions. There is
considerable scientific interest in this molecule and we aim to utilize this in
the planning of further preclinical work. The AMI result emphasizes the
potential for rEV576 in acute cardiovascular indications such as acute
myocardial infarction, stroke and cardiopulmonary bypass.
On the basis of the rEV576 results Evolutec has commenced work on process
development associated with the manufacture of this molecule. It is our
intention to appoint a contract manufacturer to produce cGMP material enabling
progress to the clinic on the successful completion of the pre-clinical
programme.
rEV598 - POTENTIAL IN CHEMOTHERAPY INDUCED NAUSEA AND VOMITING
rEV598 binds serotonin and histamine and is targeted at the chemotherapy induced
nausea and vomiting (CINV) market. In vitro work has previously demonstrated the
potential for additive effects with the commercial standard Lanreotide. The CINV
market is valued at $1.8 billion and unmet need exists because the existing
therapies only partially relieve chronic sickness following chemotherapy. This
is because several receptors and messenger molecules are involved in driving the
symptoms associated with CINV. rEV598, because it targets serotonin and
histamine, the two messenger molecules involved in CINV, has the potential to
meet this unmet need. Towards the end of 2005 work was initiated to produce
material for these studies in 2006 and plans made to undertake a preclinical
study in emesis.
Evolutec now has two preclinical candidates in different therapeutic areas where
there is substantial unmet medical need.
PATENTS
The intellectual assets of your company were strengthened in 2005. The over
arching vaso-active amine binding protein patent was granted in Europe and
China. The screening method patent was granted in Europe and use patents were
granted for rhinitis (Australasia) and conjunctivitis (Australasia and New
Zealand).
PERSONNEL
Successful recruitment enabled the company to establish a strong middle
management structure within the business. Wynne Weston-Davies and John Hamer
were joined by Ian Evans and Paul Whyte, directors of Research and Business
Development respectively. Ian is a molecular biologist with protein expertise
who worked previously for Zeneca and Celltech. He will lead collaborative
research programmes. Paul Whyte has a strong track record in business
development and previously worked for Avidex and Cancer Research UK. Paul will
lead our partnering activities. In addition, new support staff in the finance
and development areas joined the business and we now have 11 full time employees
in Reading.
LOOKING FORWARD
Evolutec remains committed to an outsourced business model and tightly managed
cost base. In 2006 projected expenditure will approximately double with three
Phase II trials, enhanced investment in the preclinical product development
candidates and a modest investment in collaborative research. The bulk of our
investment will continue to be around rEV131 where in addition to the previously
disclosed clinical studies we also intend to undertake a Phase I asthma study.
These activities are intended to diversify and develop the pipeline creating a
range of commercial opportunities for Evolutec. The preclinical work in 2006
will drive the selection of appropriate clinical indications and strategies for
rEV576 and rEV598.
Partnering is key to the development of Evolutec and its technology. The recent
positive nature of the licensing market and the generation of good clinical data
has increased interest from prospective partners in rEV131. It is intended that
an appropriate partner will be selected to accelerate and diversify the
development of rEV131 and access the primary care markets for the company.
Equally important is that deal making retains Evolutec's involvement in the
development process, builds on our core competencies and above all represents
strong share holder value for this first-in-class molecule. It is intended that
the rhinitis Phase IIb study aids the commercial positioning of rEV131, enhances
the value of the asset and drives a partnering deal over the next 12 to 18
months. The Company intends to retain marketing rights in specialist markets and
establish its own top line revenue in addition to partnering revenues in the
primary care markets.
I intend Evolutec to become an international biopharmaceutical business which
commercialises superior products to deliver unmet patient need. To develop the
business the Company intends to recruit staff in the USA and build upon its
existing business model. The results and momentum generated in 2005 provide
effective endorsement of Evolutec's approach and its technology. They emphasize
the potential of molecules sourced from the saliva of ticks and the opportunity
to build on the current pipeline of molecules in different therapeutic areas. In
2006 we aim to build on the positive results of 2005 and deliver further value
driving clinical results.
FINANCIAL REVIEW
Evolutec reported an operating loss for 2005 of £6.6 million, in line with
market expectations, and a net loss of £5.6 million. Evolutec had a net cash and
short-term investments of £17.6 million as at 31 December 2005. These numbers
reflect interest received of £0.4 million, a £0.4 million foreign exchange gain
on the Group's US dollar denominated deposits, and a £0.5 million research and
development tax credit.
CAPITAL STRUCTURE
Share capital
The Company issued a total of 13.4 million shares in two separate placings in
2005 bringing the number of 10p ordinary shares in issue at the year end up to
23.6 million. The deferred shares, which arose on a share consolidation during
the preparation for the Company's AIM listing in 2004, were cancelled in May
2005.
Liquidity
The Group had net cash and short-term investments of £17.6 million as at 31
December 2005 compared with £3.9 million as at 31 December 2004. The increase in
cash and cash equivalents reflects a £9.5 million placing (net) in April 2005
and a £9.2 million placing (net) in November 2005. The net cash outflow before
the management of liquid resources and financing of £5.3 million (18 month
period to 31 December 2004: £2.1 million) reflects the Group's increased
expenditure on research and development for the year.
The Group had no borrowings during the year (18 month period to 31 December
2004: £nil).
Treasury
As at 31 December 2005 the Group had £17.2 million on treasury deposit. The
Group's policy is to split its deposits between at least two banks each with a
minimum credit rating of F1/A. The objective is to derive the maximum interest
consistent with flexibility to undertake ongoing activity and safeguarding the
asset.
A material portion of Evolutec's expenditure is US Dollar denominated and a
smaller portion is Euro denominated. This means that Evolutec is exposed to
exchange rate movements in these currencies. The Group's policy is not to engage
in speculative transactions or derivatives trading. The objective is to monitor
closely the movement in these exchange rates and to buy foreign currencies as
and when appropriate.
A significant portion of the proceeds raised in April were converted into US
Dollars at an average rate of $1.91 to cover the cost of budgeted expenditure in
US Dollars. The favourable US Dollar exchange rate movement led to a foreign
exchange gain of £0.4 million for 2005, of which £0.1 million was realised.
CASH FLOW
The higher net cash outflow from operating activities for 2005 of £5.8 million
(18 month period to 31 December 2004: £2.3 million) reflects the increased level
of development expenditure on rEV131.
The principal cash inflow items were net interest receipts of £0.4 million,
receipt of the research and development tax credit for the 18 month period to 31
December 2004 of £0.2 million, and the realised portion of the foreign exchange
gain of £0.1 million.
The principal cash outflows were the expenses relating to the two share issues
totalling £1.2 million and capital expenditure of £0.2 million. The capital
expenditure was mainly in relation to the purchase of equipment for the cGMP
manufacture of rEV131 being undertaken by Cambrex Inc ('Cambrex'), Evolutec's
relocation from Oxford to Reading, and additional information technology
equipment.
PROFIT AND LOSS
Revenue
Evolutec is a clinical stage biopharmaceutical company and as such has no source
of direct revenue. The revenue for the period of £14,000 (18 month period to 31
December 2004: £28,000) relates to payments for materials supplied to Merial in
connection with its work in relation to animal vaccines.
Research and development
Higher research and development expenditure of £5.3 million (18 month period to
31 December 2004: £1.0 million) reflects increased development activity with the
lead product candidate rEV131. In particular, it includes the cost of the 112
patient Phase IIa allergic rhinitis clinical trial and the development of a cGMP
manufacturing process for rEV131 carried out by Cambrex.
Administrative expenses
Administrative expenses of £1.2 million (18 month period to 31 December 2004:
£1.5 million) includes the foreign exchange gain of £0.4 million. Before the
foreign exchange gain administrative expenses were £1.7 million. On a
like-for-like basis, the increase over the prior period primarily reflects the
recruitment of additional staff. At the end of 2005, Evolutec had 11 full-time
employees compared to six employees at the beginning of the year.
Taxation
The Group's research and development tax credit of £0.5 million (18 month period
to 31 December 2004: £0.2 million) is higher due to the increased level of
qualifying research and development expenditure.
INTERNATIONAL FINANCIAL REPORTING STANDARDS ('IFRS')
IFRS are mandatory for all fully listed companies within the European Union for
years commencing on or after 1 January 2005. As an AIM listed company, this
requirement does not apply to Evolutec until the financial year 2007. However,
Evolutec has decided to adopt IFRS for its financial year 2006.
The first financial information to be reported by the Group in accordance with
IFRS will be for the six months ending 30 June 2006. However, the requirement to
present comparative information means that a balance sheet as at 30 June 2005
and primary statements for the six months to 30 June 2005 and 31 December 2005,
prepared in accordance with IFRS, will also be required.
The Group has undertaken a review of the impact of IFRS on its accounting
policies and financial statements, summarised below. Furthermore, the Group has
already adopted FRS 20 (IFRS 2), Share-Based Payments. The summary is not
intended to be a complete list of areas. Further differences may arise as a
result of the Group's continued detailed assessment and interpretations of IFRS
and any pronouncements issued by the International Accounting Standards Board ('
IASB').
Deferred tax - Under IAS 12 Income Taxes, certain temporary timing differences,
for example in relation to fixed assets, that previously were not recognised
under UK GAAP, will be recognised.
Definition of cash and cash equivalents - The definition of cash and cash
equivalents under UK GAAP has been expanded by IFRS to include short-term
deposits of several months duration. This adjustment will have no impact
overall. The effect of this adjustment will be to re-categorise certain amounts
shown as short-term deposits and investments under UK GAAP as cash and cash
equivalents.
The overall impact of the adoption of IFRS on Evolutec's financial statements
will be limited.
CONSOLIDATED PROFIT AND LOSS ACCOUNT
For the year ended 31 December 2005
Year ended 18 month period
31 December ended 31 December
2005 2004
Note £000 £000
Turnover 14 28
Cost of sales (6) -
Gross profit 8 28
Research and development expenditure (5,346) (993)
Administrative expenses (1,224) (1,543)
Total administrative expenses (6,570) (2,536)
Operating loss on ordinary activities before interest (6,562) (2,508)
and taxation
Interest receivable and similar income 429 94
Loss on ordinary activities before taxation (6,133) (2,414)
Tax credit on loss on ordinary activities 528 177
Loss for the year (5,605) (2,237)
Basic and diluted loss per share - pence 2 (34.8) (33.6)
Continuing operations
All the activities of the Group are classed as continuing operations.
Statement of recognised gains and losses
There are no recognised gains and losses other than the losses above, and
therefore no separate statement of total recognised gains and losses has been
presented.
BALANCE SHEETS
As at 31 December 2005
Group Group Company Company
31 December 31 December 31 December 31 December
2005 2004 2005 2004
Note £000 £000 £000 £000
Fixed assets
Tangible assets 161 11 - -
Investments - - 29,186 10,446
161 11 29,186 10,446
Current assets
Debtors 1,321 255 - -
Short-term deposits and investments 17,013 3,761 - -
Cash 603 113 - -
18,937 4,129 - -
Current liabilities
Creditors: amounts falling due
within one year (1,915) (367) - -
Net current assets 17,022 3,762 - -
Net assets 17,183 3,773 29,186 10,446
Capital and reserves
Share capital 3 2,359 5,824 2,359 5,824
Share premium account 3 22,043 4,622 22,043 4,622
Capital redemption reserve 3 4,804 - 4,804 -
Other reserves 4 3,989 3,734 (20) -
Profit and loss account 3 (16,012) (10,407) - -
Total shareholders' funds 3 17,183 3,773 29,186 10,446
CONSOLIDATED CASHFLOW STATEMENT
For the year ended 31 December 2005
Year ended 18 months
31 December ended 31
December
2005 2004
Note £000 £000
Reconciliation of operating loss to operating cash flows (6,562) (2,508)
Operating loss
Depreciation 29 16
Increase in debtors (741) (69)
Increase in creditors 1,548 261
Unrealised foreign exchange (gain)/loss (311) 4
Share-based payment charge 275 -
Net cash outflow from operating activities (5,762) (2,296)
Cash flow statement (5,762) (2,296)
Net cash outflow from operating activities
Returns on investments and servicing of finance 429 94
Interest received
Net cash inflow from investments and servicing of finance 429 94
Taxation 203 86
Research and development tax credit received
Net cash inflow from taxation 203 86
Capital expenditure (179) (13)
Purchase of tangible fixed assets
Net cash outflow from capital expenditure (179) (13)
Net cash outflow before management of liquid resources and financing (5,309) (2,129)
Management of liquid resources (12,941) (3,590)
Increase in short-term deposits with bank
5
Net cash outflow from management of liquid resources (12,941) (3,590)
Financing 20,000 6,067
Issue of shares
Conversion of warrants - 300
Purchase of own shares (20) -
Costs of share issue (1,240) (587)
Net cash inflow from financing 18,740 5,780
Increase in cash in the period 5 490 61
Reconciliation of net cash flow to movement in net cash / (debt) 490 61
Increase in cash in the period
Movement in net funds in the period 490 61
Net funds at start of the period 113 52
Net funds at end of the period 603 113
1 Financial Information
The financial information set out in the preliminary statement does not comprise
the Company's statutory accounts within the meaning of section 240(5) of the
Companies Act 1985.
The preliminary statement is prepared on the basis of the accounting policies as
stated in the financial statements for the year ended 31 December 2005.
The financial information for 2005 has been extracted from the statutory
accounts of the Company for the year ended 31 December 2005 which have been
audited by the Company's auditors Grant Thornton UK LLP and whose report thereon
is unqualified and did not contain any statement under section 237(2) or (3) of
the Companies Act 1985. The Company's statutory accounts will be delivered to
the Registrar of Companies for England and Wales in due course and will also be
sent to shareholders.
The financial information for the eighteen month period ended 31 December 2004
has been extracted from the statutory accounts for the year ended 31 December
2004, which have been delivered to the Registrar of Companies. The auditors'
report on those accounts was unqualified and did not contain any statement under
section 237(2) or (3) of the Companies Act 1985.
The preliminary statement was approved by the Board on 27 February 2006.
2 Loss per ordinary share
Year ended 18 months ended
31 December 31 December
2005 2004
Attributable loss (£000) (5,605) (2,237)
Weighted average number of shares in issue (000) 16,096 6,660
Loss per share (basic and diluted) pence (34.8) (33.6)
The calculation of loss per share is based on the weighted average number of
ordinary shares in issue during the period. The calculation of the weighted
average number of shares for the 18 month period ended 31 December 2004 has been
adjusted to take account of the one for ten share consolidation which took place
on 17 June 2004 as part of the preparation for the Company's admission to AIM.
3 Reconciliation of movements in shareholders' funds
Called-up Share Capital Profit
share premium redemption Other & loss
capital account reserve reserves account Total
£000 £000 £000 £000 £000 £000
Group 5,824 4,622 - 3,734 (10,407) 3,773
Balance at 1 January 2005
Issue of ordinary shares 1,339 18,661 - - - 20,000
Expenses of issues of - (1,240) - - - (1,240)
ordinary shares
Cancellation of deferred (4,804) - 4,804 - - -
shares
Purchase of own shares - - - (20) - (20)
Loss for the period - - - - (5,605) (5,605)
Fair-value of share-based - '- - 275 - 275
payments
Balance at 31 December 2,359 22,043 4,804 3,989 (16,012) 17,183
2005
Company 5,824 4,622 - - - 10,446
Balance at 1 January 2005
Issues of ordinary shares 1,339 18,661 - - - 20,000
Expenses of issues of - (1,240) - - - (1,240)
ordinary shares
Cancellation of deferred (4,804) - 4,804 - - -
shares
Purchase of own shares - - - (20) - (20)
Loss for the period - - - - - -
Balance at 31 December 2,359 22,043 4,804 (20) - 29,186
2005
The expenses of issues of ordinary shares are shown net of VAT recovered on
previous share issues of £82,000.
4. Other reserves
Own shares held
Share-based Merger by Employee
payments reserve Benefit Trust Total
£000 £000 £000 £000
Group
Balance at 1 January 2005 - 3,734 - 3,734
Fair value of share-based payments 275 - - 275
Purchase of own shares - - (20) (20)
Balance at 31 December 2005 275 3,734 (20) 3,989
Company
Balance at 1 January 2005 - - - -
Purchase of own shares - - (20) (20)
Balance at 31 December 2005 - - (20) (20)
Purchase of own shares
On 20 October 2005, Bailhache Labesse Trustees Limited, the Trustees of the
Evolutec Group plc Employee Benefit Trust, purchased 12,222 ordinary shares in
Evolutec Group plc.
5. Analysis of movement in net funds
At 31
December Other non- At 31 December
2004 Cash flows cash flows 2005
£000 £000 £000 £000
Analysis of net funds
Cash 113 490 - 603
Liquid resources 3,761 12,941 311 17,013
Net funds 3,874 13,431 311 17,616
Liquid resources comprised short-term deposits with banks which mature within 12
months of the date of inception.
Other non-cash flows represents the unrealised foreign exchange gain on the
Group's US Dollar denominated treasury deposits.
6. Notice of Annual General Meeting
The Company's 2006 Annual General Meeting of shareholders will take place on 26
April 2006 at 10.30 a.m. at 100 Longwater Avenue, Green Park, Reading RG2 6GP.
This information is provided by RNS
The company news service from the London Stock Exchange
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