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VASTox plc (SUMM)

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Wednesday 12 October, 2005

VASTox plc

Interim Results

VASTox plc
12 October 2005


For immediate release              12 October 2005


                                   VASTox plc

                                Interim Results


Oxford, UK: 12 October 2005 - VASTox plc (AIM: VOX), the drug discovery and
services business specialising in chemical genomics, today announces its interim
results for the six months ended 31 July 2005.



Highlights



  • Turnover increased to £201,000 (H1 2005: £42,000)
  • Progress in the Duchenne Muscular Dystrophy and Tuberculosis programmes
  • Initiation of a third proprietary programme in Spinal Muscular Atrophy
  • Loss after tax £122,000 (H1 2005: loss of £44,000)
  • Relocation of all staff into a state-of-the-art 15,000 square foot
    facility in Milton Park, Oxfordshire

Commenting on the Group's interim results, Steven Lee, Chief Executive Officer
of VASTox plc, said:



'VASTox became a public company in October 2004 to accelerate both our chemical
genomics services business and our proprietary drug discovery programmes.  With
sales up nearly five-fold, and compounds in our lead DMD programme entering
efficacy studies, we have delivered a step-change in operations.  All this was
achieved whilst maintaining good financial discipline and consolidating all of
the company in one excellent facility.  We have now built a base from which our
shareholders will see continued business successes and accelerated value growth.
'





For more information please contact:


VASTox plc (www.vastox.com)
Dr Steven Lee, Chief Executive Officer                 On the day: 07766 913 898
                                                       Afterwards: 01235 443 901
                                               
Buchanan Communications                                            020 7466 5000
Tim Anderson, Mark Court, Mary-Jane Johnson


Chairman and Chief Executive's statement


Introduction

During the past six months we have made significant advances in all areas of the
business.  With a strong sales pipeline, progress on in-house proprietary
programmes and a new dedicated £3m chemical genomics facility, the company is
entering its next stage of development and value growth.



Services

Sales for the half year have increased to £201,000 compared with £42,000 for the
period to 31 July 2004 (£113,000 for the year to 31 January 2005).  The increase
in sales reflects the pharmaceutical and agrochemical industries beginning to
value our genomics platform for both gene target identification and predictive
toxicity testing of potential drugs.



Since January we have signed six deals with five new customers for chemical
genomics and chemistry services.  These deals range from fee-for-service to a
full R&D collaboration with a top-tier agrochemical company where VASTox retains
all rights to intellectual property generated relating to drug discovery.



Product development

We have responded to the challenges facing the pharmaceutical industry by
leveraging our expertise in compound screening and high-throughput in-vivo
toxicology to produce a comprehensive range of value-added services.  We now
offer services in:



  • Cardiotoxicity
  • Acute toxicity
  • Hepatotoxicity
  • Genotoxicity
  • Carbohydrate synthesis
  • Medicinal chemistry



These offerings have created real industry excitement.  Cardiotoxicity for
example causes one in three drug candidates to fail; an effect that is often not
seen until the late stages of clinical trials or even when the drug is in the
marketplace.  By using zebrafish we can provide rapid and highly predictive
in-vivo data on the toxicity of our clients' compounds, saving cost and time.



Programmes

VASTox does not fund in-house research to derive proprietary drug discovery
programmes.  Instead, the company leverages its relationships within the global
academic community to initiate innovative programmes with minimal up-front
investment.



Our first two programmes, in Duchenne Muscular Dystrophy (DMD) and Tuberculosis
(TB) are based on the work of founding scientists Professors Kay Davies and
Edith Sim respectively.  Both academics are world-leading experts in their
fields having spent many years developing an understanding of these diseases to
a point where commercial drug discovery can take place.



In July we announced that Spinal Muscular Atrophy (SMA) would be the focus for
our third proprietary drug discovery programme, after DMD and TB.  SMA is a
fatal genetic condition that affects approximately 50,000 patients worldwide.
The disease usually appears in young children and patients usually die before
their teens.  There is currently no adequate treatment for this disease.



Most drugs fail through toxic or unwanted side effects, rather than lack of
efficacy.  We believe that our in-house drug programmes will stand a greater
chance of success because we will use our screening and toxicology technologies
before starting clinical trials.



Scientific Advisory Board

Since January we have strengthened our scientific advisory board through the
recruitment of Professor Francesco Muntoni, a paediatric neurologist working at
Imperial College London; Professor Roger Patient, an expert in zebrafish and
cardiovascular diseases currently research professor at the Weatherall Institute
of Molecular Medicine at the University of Oxford; Professor David Paterson, an
expert in cardiovascular diseases at the University of Oxford; and Dr Marcel van
den Heuvel, a group leader at the Medical Research Council Genetics Unit at the
University of Oxford and an expert in SMA and Drosophila.   We will continue to
make selective appointments where we find talented and like-minded scientists.



As our Scientific Advisory Board strengthens and our network of academic
collaborators grows we are building a pipeline of potential drug discovery
programmes.  We will continue to select and fund those programmes that combine
innovative science, accomplished academics and well-developed assays.



Operations

Since January 2005 we have completed the move from university incubation
laboratories to a state-of-the-art, 15,000 square foot facility in Milton Park,
Oxfordshire.  For the first time since our inception, all the company's
biologists, chemists and managers are working in the same facility.  We believe
that our customers are already benefiting from this synergy.  We have recruited
drug discoverers from industry to turn innovative academic science into
promising drug discovery programmes.



We now have the people and facilities to grow both our services business and
drive our existing programmes.



Board changes

As we approach our first anniversary as a public company we have reviewed the
composition of the Board as we begin our next phase of growth.



We recently announced the appointment of Sir Brian Richards CBE as Non-Executive
Director.  Sir Brian was a pioneer of the European biotechnology industry in the
late 1980s, and continues to be a driving force within the sector.  His
tremendous industry experience and track record of success in growing biotech
companies will be invaluable to VASTox.



Andrew Mulvaney, Chief Operations Officer and founding scientist, will be
stepping down from the Board to focus on a full-time role in sales and business
development.  We thank Andy for his hard work and contribution to the growth of
the company from its start-up stages in an all round operational capacity.



Outlook

We have achieved a great deal in the past twelve months since our listing on AIM
in October 2004, and have set aggressive growth targets over the next five
years.



For the remainder of the financial year we see increased activity in our
services business, advances in our drug discovery programmes and the initiation
of a further proprietary programme.



From the strong business base built over the past year, we now have an
opportunity to further accelerate the growth of our services division, our
existing proprietary programmes and the engine for starting more new innovative
programmes.



Prof. Stephen Davies                         Steven Lee, PhD
Chairman                                     Chief Executive Officer


12 October 2005


Consolidated profit and loss account
for the six months ended 31 July 2005


                                                                 Unaudited        Unaudited         Restated
                                                                Six months       Six months             Year
                                                                     ended            ended            ended
                                                                   31 July          31 July       31 January  
                                                                      2005             2004             2005            
                                                                         
                                                                         £                £                £

Turnover                                                           201,156           41,950          112,718

Cost of sales                                                     (75,894)         (21,570)         (90,200)

Gross profit                                                       125,262           20,380           22,518

Administrative expenses
Research and development                                         (159,069)                -        (267,533)
Other                                                            (393,235)         (64,979)         (40,348)
                                                                 (552,304)         (64,979)        (307,881)

Operating loss                                                   (427,042)         (44,599)        (285,363)

Interest receivable                                                305,322              582          215,368

Loss on ordinary activities before taxation                      (121,720)         (44,017)         (69,995)

Tax on loss on ordinary activities                                       -                -           24,321

Loss on ordinary activities after taxation                       (121,720)         (44,017)         (45,674)

Basic loss per ordinary share                                        0.39p            0.22p            0.19p



Consolidated balance sheet

at 31 July 2005


                                                                 Unaudited        Unaudited          Restated
                                                                   31 July          31 July        31 January
                                                                      2005             2004              2005
                                                                         £                £                 £
Fixed assets
Tangible assets                                                  1,139,645                -             1,353
Intangible assets                                                   35,000                -            20,000
                                                                 1,174,645                -            21,353

Current assets
Debtors                                                            429,687            1,950            93,140
Cash on short term deposits                                     12,900,000                -        13,800,000
Cash at bank                                                        19,730           97,320           361,252
                                                                13,349,417           99,270        14,254,392

Creditors: amounts falling due within one year                   (555,886)        (117,053)         (185,849)

Net current assets                                              12,793,531         (17,783)        14,068,543

Net assets                                                      13,968,176         (17,783)        14,089,896

Capital and reserves
Called up share capital                                          3,131,311            1,000         3,131,311
Share premium account                                           12,946,848           99,000        12,946,848
Other reserves                                                 (1,942,589)                -       (1,942,589)
Profit and loss account                                          (167,394)        (117,783)          (45,674)
Equity shareholders' funds                                      13,968,176         (17,783)        14,089,896



Consolidated cash flow statement
for the six months ended 31 July 2005


                                                               Unaudited         Unaudited           Restated
                                                              Six months        Six months               Year
                                                                   ended             ended              ended
                                                                 31 July           31 July         31 January
                                                                    2005              2004               2005
                                                                       £                 £                  £

Net cash flow from operating activities                        (371,110)          (16,629)          (184,863)

Returns on investment and servicing of finance                   305,322               582            215,368

Capital expenditure                                          (1,175,734)                 -            (6,803)

Cash (outflow) inflow before management of liquid            (1,241,522)          (16,047)             23,702
resources and financing

Management of liquid resources                                   900,000                 -       (13,800,000)
Financing                                                              -            33,776         14,057,959

Increase (decrease) in cash in the period                      (341,522)            17,729            281,661



Reconciliation of operating loss to net cash outflow from operating activities


                                                               Unaudited         Unaudited           Restated
                                                              Six months        Six months               Year
                                                                   ended             ended              ended
                                                                 31 July           31 July         31 January
                                                                    2005              2004               2005
                                                                       £                 £                  £

Operating loss                                                 (427,042)          (44,599)          (285,363)
Depreciation charge                                               18,645                 -                450
Amortisation of intangible fixed assets                            3,797                 -              5,000
Increase of debtors                                            (336,547)           (1,748)           (68,615)
Increase of creditors                                            370,037            29,718            163,665
Net cash outflow from operating activities                     (371,110)          (16,629)          (184,863)



Notes to the interim results


 1. Basis of preparation

The results for the half-year are unaudited and do not constitute statutory
accounts within the meaning of section 240 of the Companies Act 1985.  They have
been prepared on the same basis as the accounts for the year ended 31 January
2005.



The comparatives for the full year ended 31 January 2005 are not the company's
full statutory accounts for that year.  A copy of the statutory accounts for
that year has been delivered to the Registrar of Companies.  The auditors'
report (signed by the company's previous auditors) on those accounts was
unqualified and did not contain a statement under section 237 (2) - (3) of the
Companies Act 1985.



Restatement



The directors have reviewed the accounting treatment of share options in the
accounts for the year to 31 January 2005 in relation to UITF 17.  The directors
have concurred that the share options were priced at the market value at the
date of grant.  These accounts have therefore been restated to exclude the
non-cash charge of £453,351 for expensing of share options.  This restatement
has had no effect on net assets or equity shareholders' funds.



 2. Loss per share calculation



The loss per share has been calculated by dividing the loss for the period of
£121,720 (for the period ended 31 July 2004: loss of £44,017; for the year ended
31 January 2005: loss of £45,674) by the weighted average number of 31,313,111
shares in issue during the six month period to 31 July 2005 (for the six month
period ended 31 July 2004: 20,202,000; for the year ended 31 January 2005:
23,442,741).



Since the group has reported a net loss, diluted loss per share is equal to
basic loss per share.



 3. Analysis of changes in net funds

                                                               Unaudited         Unaudited
                                                              Six months        Six months               Year
                                                                   ended             ended              ended
                                                                 31 July           31 July         31 January
                                                                    2005              2004               2005
                                                                       £                 £                  £

Movement in cash in the year                                   (341,522)            17,729            281,661
Cash (inflow) outflow from movement in liquid                  (900,000)                 -         13,800,000
resources

Opening net funds                                             14,161,252            79,591             79,591
Closing net funds                                             12,919,730            97,320         14,161,252



 4. Copies of this interim report are being sent to all shareholders.  Copies are
    also available at the Registered Office of the Company: VASTox plc, 91
    Milton Park, Abingdon, Oxfordshire, OX14 4RY.


The interim results were approved by the Board of Directors on 11 October 2005.







                      This information is provided by RNS
            The company news service from the London Stock Exchange