Interim Results

RNS Number : 8754B
Tissue Regenix Group PLC
12 October 2015
 



Tissue Regenix Group plc

("Tissue Regenix" or "the Group")

 

Unaudited Interim Results for the six months ended 31 July 2015

 

YORK, 12th October 2015 - Tissue Regenix Group (AIM:TRX) "Tissue Regenix" or "The Group", the regenerative medical devices company, today announces its unaudited interim results for the six months ended 31 July 2015.

 

Operational Highlights

 

During the period, the Group has achieved the following important milestones:

 

·      Wound Care

Continued commercial success of DermaPure® within the USA after the approval of a 'Q' code for Medicare and Medicaid reimbursement in January 2015

With a growing distributor network, DermaPure® is now available under Medicare in 31 states, reaching c.65% of the 37 million Medicare beneficiaries

Two stocking distributor agreements signed in H1 2015, worth a minimum of $0.8m in the coming year

Established US direct salesforce working alongside growing distributor network

 

·      Orthopaedics

First patients enrolled into the EU OrthoPure™ XM Meniscus trial, with first analysis of results expected in H1 2016

Recruitment for the OrthoPure™ XT ACL trial due to start towards the end of 2015

On track for expected release of the OrthoPure™ Human Meniscus (HM) and Human Tendon (HT) products within the USA towards the end of H2 2016

 

·      Operations

Successful move to the new EU manufacturing site in Swillington, Leeds

Expansion of the corporate offices in both the UK and USA

 

·      Cardiac 

Commercial deployment in EU close to realisation

Encouraging results returned from our Aortic and Pulmonary 10 year follow up study, including data from 258 patients

 

 

 

Financial Highlights

 

·      As expected, increased operating loss of £4.1m (H1 2014: £3.8m) as the Group continues to invest in infrastructure and  new product development

·      Cash balances strengthened to £24.9m (H1 2014 £14.6m) after equity fundraising of £19m (net of expenses) in February 2015

 

 

Antony Odell, CEO of Tissue Regenix Group plc commented: "Tissue Regenix has made significant commercial progress throughout the last six months, achieving corporate milestones either ahead of, or on target. The successful implementation of our hybrid commercialisation strategy throughout the USA has meant that we are exceeding our expectations for the roll out of DermaPure®; and the ongoing clinical trial for the dCELL® meniscus product within the EU will allow us to gain a CE mark and expand our portfolio of products throughout 2016.

 

We continue to look at ways in which we can expand the application of our patented dCELL® technology and are committed to reinvestment into product research, development and design, whilst the move of our key EU operations to the new manufacturing site at Swillington shows our confidence in the further commercial success of the Group and its products. 

 

With the important investments that we have made in establishing our new manufacturing facilities and corporate offices, Tissue Regenix now has the infrastructure and capacity to capitalise on the exciting commercial opportunities ahead."

 

 

 

 

 

A capital markets update presentation for analysts and investors will be held today, Monday 12th October, between 10am and 1pm at the London Stock Exchange, Paternoster Square, EC4M 7LS.  The presentation will contain no new material information. If you would like to attend, please contact Tulchan Communications on tissueregenix@tulchangroup.com

 

 

For further information, please contact:

 

Tissue Regenix Group plc:                                                                  +44 (0) 19 04 567 609

Caitlin Pearson

 

Jefferies International Ltd.                                                                +44 (0) 20 7029 8000

Simon Hardy

Harry Nicholas

 

Tulchan Communications                                                                 +44 (0) 20 7353 4200

James Macey White

Victoria Huxster

Matt Low

                                                               

               

 

About Tissue Regenix

Tissue Regenix is a leading medical devices company in the field of regenerative medicine. The company's patented decellularisation ('dCELL®') technology removes DNA and other cellular material from animal and human tissue leaving an acellular tissue scaffold which is not rejected by the patient's body which can then be used to repair diseased or worn out body parts. The potential applications of this process are diverse and address many critical clinical needs such as vascular disease, heart valve replacement and knee repair.

 

Tissue Regenix was formed in 2006 when it was spun-out from the University of Leeds. The company commercialises academic research conducted by our partners around the World.

 

In November 2012 Tissue Regenix Group plc set up a subsidiary company in the United States - 'Tissue Regenix Wound Care Inc.', as part of its commercialisation strategy for its dCELL® technology platform.

 

 

 

 

 

 

 

 

 

Chairman's Statement

 

Overview

The six months since our last statement have continued to see exciting developments for the Tissue Regenix group, as we consolidate our early commercial success with DermaPure®, while simultaneously maintaining and expanding our research base, and actively seeking new clinical and commercial outlets for our products.

 

Crucial to this has been the positive feedback of DermaPure® in the US, and its now widespread approval by Federal agencies, having capitalised on gaining the 'Q' code for Medicare reimbursement for outpatients which has been in place since January 1st 2015.

 

In addition to this, progress has been made in research and clinical activities. The coming year will bring us closer to commercialising our orthopaedic business firstly in the EU, with the meniscus trial underway and the tendon trial expected to start in H2, whilst we also continue to achieve encouraging clinical results for our cardiac project in Brazil.

 

Woundcare

DermaPure® continued to gain momentum within the US during the first half of 2015. Having gained the 'Q' code for Medicare and Medicaid reimbursement in January 2015 for use in outpatient settings, DermaPure® has now been passed in 9 of the 11 regional Medicare Administrative Contractor jurisdictions, meaning that by the end of July 2015 DermaPure® was available in 31 States covering approximately 65% of all Medicare beneficiaries. 

 

The marketing and sales strategy has developed to mirror these advances and we have successfully implemented and utilised our hybrid sales strategy. Deploying a sales force faster than initially anticipated, with a further 3 direct sales representatives employed within the last 6 months,  we also continue to grow a network of stocking distributors with two agreements signed in H1 2015 worth a minimum of $0.8m in the coming year, highlighting the success of the DermaPure® launch.

 

We continue to look for opportunities for product extensions of DermaPure® that we can commercially exploit and expect to have a number of these in place over the coming year. 

 

Orthopaedics

The OrthoPure™ XM trial began on schedule in April and we are now starting to receive positive results from the first patients in the trial. We anticipate a comprehensive analysis of results early next year and remain on track to complete this trial and receive our CE mark during 2016, as planned.

 

Recruitment for the OrthoPure™ XT trial is due to start in the latter part of 2015 and we expect initial results within the first half of 2016.  We also expect that we will be able to launch the human tissue orthopaedic products within the US towards the end of 2016.

 

Operations

The move to our new manufacturing site at Swillington was completed on time in April.  Now with the capability to manufacture our porcine products in-house, the testing has proceeded to plan as we await CE approval to begin production of the Meniscus and ACL products from here.   

 

Financial Review

Revenue for the half-year was £0.3m (H1 2014: nil) following the successful launch of DermaPure® in the US.  Revenue growth continues to accelerate as we deploy more direct sales representatives and expand our distributor network.

 

As previously indicated the Group expects costs to increase as it continues to invest in infrastructure and new product development.  The increased operating loss over the half-year of £4.1m (H1 2014: £3.8m) is a reflection of this and is in line with our expectations.

 

Cash balances strengthened to £24.9m (H1 2014: £14.6m) as a result of a cash injection of £19m (net of expenses) via a share placing which completed in February 2015.  The Group remains debt free.

 

Outlook 

The continued commercial success of DermaPure® and the positive start to the orthopaedic meniscus trial reflect an exciting time for Tissue Regenix. As we continue our strategic move to address the unmet clinical need in sports medicine (with over 1.5million people suffering meniscal injuries in the USA and EU alone, per year) we are increasingly confident that we can position ourselves amongst the global leaders in this field.  With ongoing projects to develop and exploit our patented dCELL® technology platform in order to address different clinical needs, we continue to ensure future potential growth by maintaining a strong R&D base.

 

As a Group we are progressing in line with our expectations and look forward with confidence as we continue to build a developmental and commercial platform based around our patented dCELL® technology, with a portfolio of products addressing a range of therapeutic applications, that will allow Tissue Regenix to establish a stronghold in the regenerative medical market.

 

 

John Samuel

Chairman

12 October 2015

 

 

 

 

 

 

  

 

 

CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (UNAUDITED)

FOR THE SIX MONTHS TO 31 JULY 2015

 

 


 

 

Notes

6 months to

31 July 2015

£'000

6 months to

31 July 2014

£'000

12 months to

31 Jan 2015

£'000

Revenue


252

8

100

Administrative expenses


(4,385)

(3,835)

(8,469)

Operating loss


(4,133)

(3,827)

(8,369)

Finance income


116

97

168

Loss before tax


(4,017)

(3,730)

(8,201)

Taxation

3

335

300

620

Loss after tax attributable to equity holders of the parent


 

(3,682)

 

(3,430)

 

(7,581)






Other Comprehensive Income:





Foreign currency translation differences - foreign operations


 

4

 

-

 

(4)

TOTAL COMPREHENSIVE EXPENSE FOR THE YEAR


(3,678)

(3,430)

(7,585)






Loss per share





Basic and diluted on loss from continuing operations

 

4

 

(0.50)p

 

(0.54)p

 

(1.19)p

 

The loss for the period arises from the Group's continuing operations.

 

 

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (UNAUDITED)

FOR THE SIX MONTHS TO 31 JULY 2015

 

 

 

 

 

 

 

Share

Capital

£'000

 

 

Share

Premium

£'000

 

 

Merger

Reserve

£'000

 

Reverse

Acquisition

Reserve

£'000

 

Reserve for own shares

£'000

Share

Based

Payment

Reserve

£'000

 

Retained earnings deficit

£'000

 

 

Total

Equity

£'000

At 31 Jan 2014

3,267

31,971

10,884

(7,148)

(831)

630

(19,795)

18,978

Loss and total comprehensive expense for the period

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(3,430)

 

 

 

(3,430)

Exercise of share options

 

4

 

1

 

-

 

-

 

-

 

-

 

-

 

5

Share based payment

 

-

 

-

 

-

 

-

 

-

 

90

 

-

 

90

At 31 July 2014

3,271

31,972

10,884

(7,148)

(831)

720

(23,225)

15,643

Loss for the period

 

-

 

-

 

-

 

-

 

-

 

-

 

(4,151)

 

(4,151)

Other comprehensive income

 

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

 

(4)

 

 

(4)

Loss and total comprehensive expense for the period

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(4,155)

 

 

 

(4,155)

Exercise of share options

 

-

 

-

 

-

 

-

 

-

 

-

 

-

 

-

Share based payment

 

-

 

-

 

-

 

-

 

-

 

90

 

-

 

90

At 31 Jan 2015

3,271

31,972

10,884

(7,148)

(831)

810

(27,380)

11,578

Loss and total comprehensive expense for the period

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(3,682)

 

 

 

(3,682)

Other comprehensive income

 

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

 

4

 

 

4

Exercise of share options

 

1

 

23

 

-

 

-

 

-

 

-

 

-

 

24

Issue of shares

526

18,422

-

-

-

-

-

18,948

Share based payment

 

-

 

-

 

-

 

-

 

-

 

90

 

-

 

90

At 31 July 2015

3,798

50,417

10,884

(7,148)

(831)

900

(31,058)

26,962

 

 

 

 

 



 

CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION (UNAUDITED)

AS AT 31 JULY 2015

 

 


 

Notes

31 July 2015

£'000

31 July 2014

£'000

31 Jan 2015

£'000

Non-current assets





Property, plant and equipment


878

440

435

Total non-current assets


878

440

435

Current assets





Inventory


17

9

34

Trade and other receivables


1,801

1,318

1,947

Cash and cash equivalent


24,887

14,578

10,257

Total current assets


26,705

15,905

12,238

Total assets


27,583

16,345

12,673

Current liabilities





Trade and other payables


(621)

(702)

(1,095)

Total liabilities


(621)

(702)

(1,095)

Net assets


26,962

15,643

11,578

Equity





Share capital

5

3,798

3,271

3,271

Share premium

5

50,417

31,972

31,972

Merger Reserve

5

10,884

10,884

10,884

Reverse acquisition reserve

5

(7,148)

(7,148)

(7,148)

Reserve for own shares


(831)

(831)

(831)

Share based payment reserve


900

720

810

Retained earnings deficit

6

(31,058)

(23,225)

(27,380)

Total equity


26,962

15,643

11,578

 

Approved by the Board and authorised for issue on 12 October 2015

 

John Samuel (Chairman)                    Ian Jefferson (Chief Financial Officer)

 



 

CONDENSED CONSOLIDATED CASH FLOW STATEMENT (UNAUDITED)

FOR THE SIX MONTHS ENDED 31 JULY 2015

 

 


 

 

Notes

6 months to

31 July 2015

£'000

6 months to

31 July 2014

£'000

12 months to

31 Jan 2015

£'000

Operating Activities

Operating loss


 

(4,133)

 

(3,827)

 

(8,369)

Adjustment for non-cash items:





Depreciation of property, plant & equipment


118

76

151

Share based payment


90

90

180

Tax refunded


745

-

-

Operating cash outflow


(3,180)

(3,661)

(8,038)

Decrease/(increase) in inventory


17

(9)

(34)

(Decrease)/increase in trade & other receivables


(264)

109

(200)

Decrease in trade & other payables


(470)

(402)

(13)

Net cash outflow from operations


(3,897)

(3,963)

(8,285)

Investing activities





Interest received


116

97

168

Purchase of property, plant & equipment


(561)

(44)

(114)

Net cash outflow from investing activities


(445)

53

54

Financing activities





Proceeds from issue of share capital


18,972

5

5

Net cash inflow from financing activities


18,972

5

5

Increase/(decrease) in cash and cash equivalents


14,630

(3,905)

(8,226)

Cash and cash equivalents at start of period


10,257

18,483

18,483

Cash and cash equivalents at end of period


24,887

14,578

10,257

 

 



 

NOTES TO THE CONDENSED FINANCIAL STATEMENTS (UNAUDITED)

FOR THE SIX MONTHS ENDED 31 JULY 2015

 

 

1.     Basis of preparation

 

The interim financial information set out in this statement for the six months ended 31 July 2015 and the comparative figures for the six months ended 31 July 2014 are unaudited.  This information does not constitute statutory accounts as defined in Section 435 of the Companies Act 2006.

 

The comparative figures for the financial year ended 31 January 2015 are not the Company's statutory accounts for that financial year.  Those accounts have been reported on by the Company's auditors and delivered to the Registrar of Companies.  The report of the auditor was (i) unqualified, (ii) did not include a reference to any matters to which the auditor drew attention by way of emphasis without qualifying their report, and (iii) did not contain a statement under section 498 (2) or (3) of the Companies Act 2006.

 

This interim statement, which is neither audited nor reviewed, has been prepared in accordance with the measurement and recognition criteria of EU adopted IFRSs.  It does not include all the information required for the full annual financial statements, and should be read in conjunction with the financial statements of the Group as at and for the year ended 31 January 2015.  It does not comply with IAS 34 "Interim Financial Reporting" as is permissible under the rules of the AIM Market ("AIM").

 

The financial information has been prepared on a going concern basis and is presented in Sterling to the nearest £'000.

 

The preparation of financial information in conformity with IFRS requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Although these estimates are based on management's best knowledge of the amount, event or actions, actual events ultimately may differ from those estimates.

 

The interim financial information does not include all financial risk management information and disclosures required in annual financial statements. There have been no significant changes in any risk or risk management policies since 31 January 2015. The principal risks and uncertainties are largely unchanged and are as disclosed in the Annual Report for the year ended 31 January 2015.

 

 

The accounting policies applied in preparing these interim financial statements are the same as those applied in the preparation of the annual financial statements for the year ended 31 January 2015, as described in those financial statements other than standards, amendments and interpretations which became effective after 1 February 2015 and were adopted by the Group.  These have had no significant impact on the Group's result for the period or equity.  The Board approved these interim financial statements on 24 September 2015.

 

 

2.     Significant accounting policies

 

The condensed consolidated financial statements have been prepared under the historical cost convention in accordance with International Financial Reporting Standards as adopted by the European Union.

 

The accounting policies adopted are consistent with those followed in the preparation of the audited financial statements of Tissue Regenix Group Plc for the year ended 31 January 2015 and are disclosed in those statements.

 

 

 

 

NOTES TO THE CONDENSED FINANCIAL STATEMENTS (UNAUDITED) continued

FOR THE SIX MONTHS ENDED 31 JULY 2015

 

 

3.     Taxation

 


 

 

 

6 months to

31 July 2015

£'000

6 months to

31 July 2014

£'000

12 months to

31 Jan 2015

£'000

Current Tax:





Tax credit on research and development costs in the period


 

335

 

300

 

620



335

300

620

Deferred tax:





Origination and reversal of temporary timing differences


 

-

 

-

 

-

Tax credit on loss on ordinary activities


335

300

620






The Group has accumulated losses available to carry forward against future trading profits.  No deferred tax asset has been recognised in respect of tax losses.

 

 

4.     Loss per share (basic and diluted)

 

Basic loss per share is calculated by dividing the loss attributable to equity holders of the parent by the weighted average number of ordinary shares in issue during the period excluding own shares held jointly by the Tissue Regenix Employee Share Trust and certain employees.  Diluted loss per share is calculated by adjusting the weighted average number of ordinary shares in issue during the period to assume conversion of all dilutive potential ordinary shares.

 


 

 

 

6 months to

31 July 2015

£'000

6 months to

31 July 2014

£'000

12 months to

31 Jan 2015

£'000

Total loss attributable to the equity holders of the parent


 

(3,682)

 

(3,430)

 

(7,581)













No.

No.

No.

Weighted average number of ordinary shares in issue during the period


 

737,434,237

 

636,592,627

 

636,890,061

Loss per share





Basic and diluted on loss for the period


(0.50)p

(0.54)p

(1.19)p

 

The Company has issued employees options over 23,786,780 ordinary shares and there are 16,940,386 jointly owned shares which are potentially dilutive.  There is, however, no dilutive effect of these issued options as there is a loss for each of the periods concerned.

 

 

 

 

 

 

 

 

 

 

NOTES TO THE CONDENSED FINANCIAL STATEMENTS (UNAUDITED) continued

FOR THE SIX MONTHS ENDED 31 JULY 2015

 

 

5.     Share capital

 


 

 

 

Number

 

Share

Capital

£'000

 

Share

Premium

£'000

 

Merger Reserve £'000

Reverse acquisition reserve £'000

 

 

Total

£'000

Total Ordinary shares of 0.5p each as at 31 January 2014

 

653,487,357

 

3,267

 

31,971

 

10,884

 

(7,148)

 

38,974

Issued on exercise of share options

 

635,674

 

4

 

1

 

-

 

-

 

5

Total Ordinary shares of 0.5p each as at 31 July 2014

 

654,123,031

 

3,271

 

31,972

 

10,884

 

(7,148)

 

38,979

Issued on exercise of share options

 

-

 

-

 

-

 

-

 

-

 

-

Total Ordinary shares of 0.5p each as at 31 January 2015

654,123,031

3,271

31,972

10,884

(7,148)

38,979

Issued for cash

105,263,158

526

18,422

-

-

18,948

Issued on exercise of share options

 

266,904

 

1

 

23

 

-

 

-

 

24

Total Ordinary shares of 0.5p each as at 31 July 2015

 

759,653,093

 

3,798

 

50,417

 

10,884

 

(7,148)

 

57,951

 

 

6.     Movement in retained earnings and reserve for own shares

 


 

 

 


Retained

Earnings

Deficit

£'000

Reserve For Own

Shares

£'000

At 31 January 2014



(19,795)

(831)

Loss for the period



(3,430)

-

At 31 July 2014



(23,225)

(831)

Loss for the period



(4,151)

-

Exchange movement



(4)

-

At 31 January 2015



(27,380)

(831)

Loss for the period



(3,682)

-

Exchange movement



4

-

At 31 July 2015



(31,058)

(831)

 

 

7.     Interim financial report

 

A copy of this interim report will be distributed to shareholders and is also available on the Company's website at www.tissueregenix.com

 

 

 


This information is provided by RNS
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