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Lipoxen PLC (XEN)

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Friday 01 August, 2008

Lipoxen PLC

Correction - Interim Results

RNS Number : 5035A
Lipoxen PLC
01 August 2008
 



Lipoxen PLC

('Lipoxen' or 'the Company')



This RNS replaces RNS number 3486A issued yesterday31st July 2008, at 14.23 hours.


RNS 3486A contained a typographical error in the '2008 Highlights' section of the Chairman's Statement by way of including wording relating to SuliXen which in fact related to the Company's EPO product. The correct wording is: 


SuliXen, a long-acting insulin, became our second product to enter the clinic and initial results demonstrated that the candidate may be progressing towards a superior formulation, as compared to Lantus (sanofi-aventis), a $3billion product.

 

All other information remains unchanged. The full amended text appears below.



Interim report and unaudited accounts for the six months ended 30th June 2008


London, UK, 31st July , 2008 - Lipoxen PLC (AIM:LPX), a bio-pharmaceutical company specialising in the development of high value differentiated biologicals, vaccines and oncology drugs, announces today its interim report and unaudited accounts for the six months ended 30th June 2008.


Operational Highlights


  • The announcement of positive Phase I results with ErepoXen, a long-acting erythropoietin, which demonstrated that the product has the potential to be administered once per month versus 1-3 times per week for marketed EPOs that generate $9 billion in revenues.


  • SuliXen, a long-acting insulin, became Lipoxen's second product to enter the clinic and initial results demonstrated that the candidate may be progressing towards a superior formulation, as compared to Lantus (sanofi-aventis), a $3billion product.


  • The Company received a grant from the International Aids Vaccine Initiative (IAVI), the world's leading HIV-AIDS vaccine organization, for the research and development of an HIV-AIDS vaccine.  


  • The Company strengthened its IP position with the granting of two key patents in the US relating to its innovative DNA vaccine delivery technology


  • The technology transfer with Schering-Plough for access to Lipoxen's unique PolyXen drug delivery technology  was completed



Enquiries 


Lipoxen PLC


M. Scott Maguire, Chief Executive Officer

+44 (0)20 7691 3583 



Landsbanki Securities (UK) Limited (nominated adviser)


Shaun Dobson / Claes Spång 

+44 (0)20 7426 9000



Citigate Dewe Rogerson


David Dible / Heather Keohane

+44 (0)20 7638 9571


Notes to Editors


Further information on Lipoxen 


Lipoxen PLC (AIM:LPX) is a biopharmaceutical company specializing in the development of high value differentiated biologicals, vaccines and oncology drugs. Products currently under development include improved formulations of important biologicals such as erythropoietin (EPO), G-CSF, insulin and Interferon-alpha. Lipoxen has two products in clinical development SuliXen, a long-acting human insulin and ErepoXen®, long-acting EPO. These novel products, which are based on Lipoxen's proprietary PolyXen® technology, each address markets in excess of US$1 billion. 


Lipoxen's technology is designed to improve the stability, biological half-life and immunologic characteristics of therapeutic proteins naturally. Lipoxen has two further naturally-derived proprietary delivery technologies, ImuXen® and a related liposomal technology for the formulation of cytotoxic oncology drugs, which are being developed to enhance the efficacy and safety of various vaccines such as a multivalent Hepatitis B-E and pneumococcal vaccines, as well as a number of anti-cancer agents like paclitaxel. The Company's proprietary delivery technologies are attracting significant interest and Lipoxen is currently co-developing products with the Serum Institute of India Limited (one of the world's leading vaccine companies, India's largest biotech company and a major shareholder in Lipoxen) and has license agreements in place with Baxter International and InterVet, a leading animal health company.


Lipoxen was admitted to trading on the AIM Market of the London Stock Exchange in January 2006.


This announcement includes 'forward-looking statements' which include all statements other than statements of historical facts, including, without limitation, those regarding the Company's financial position, business strategy, plans and objectives of management for future operations (including development plans and objectives relating to the Company's products and services), and any statements preceded by, followed by or that include forward-looking terminology such as the words 'targets', 'believes', 'estimates', 'expects', 'aims', 'intends', 'will', 'can', 'may', 'anticipates', 'would', 'should', 'could' or similar expressions or the negative thereof. Such forward-looking statements involve known and unknown risks, uncertainties and other important factors beyond the Company's control that could cause the actual results, performance or achievements of the Company to be materially different from future results, performance or achievements expressed or implied by such forward-looking statements. Such forward-looking statements are based on numerous assumptions regarding the Company's present and future business strategies and the environment in which the Company will operate in the future. Among the important factors that could cause the Company's actual results, performance or achievements to differ materially from those in forward-looking statements include those relating to The Company's funding requirements, regulatory approvals, clinical trials, reliance on third parties, intellectual property, key personnel and other factors. These forward-looking statements speak only as at the date of this announcement. The Company expressly disclaims any obligation or undertaking to disseminate any updates or revisions to any forward-looking statements contained in this announcement to reflect any change in the Company's expectations with regard thereto or any change in events, conditions or circumstances on which any such statements are based. As a result of these factors, readers are cautioned not to rely on any forward-looking statement.




CHAIRMAN'S STATEMENT


Dear Shareholder, 


I am delighted to be able to update you on Lipoxen's progress this year. The first half of 2008 was a very exciting period for us with the highlight being the generation of our first human clinical data showing that our platform technology has the ability to enhance the dosing and performance of the most commercially successful biotherapeutics on the market today. In addition we have further candidates in the clinic and have strengthened our IP position. Since I last updated you we have continued to drive the business forward and look forward to announcing more positive news soon.


2008 Highlights

  • In early 2008 Lipoxen's business took significant steps forward with candidates entering the clinic and the announcement of positive Phase I results with ErepoXen, a long-acting erythropoietin, which demonstrated that the product has the potential to be administered once per month versus 1-3 times per week for marketed EPOs that generate $9 billion in revenues


  • SuliXen, a long-acting insulin, became our second product to enter the clinic and initial results demonstrated that the candidate may be progressing towards a superior formulation, as compared to Lantus (sanofi-aventis), a $3billion product


  • We received a grant from the International Aids Vaccine Initiative (IAVI), the world's leading HIV-AIDS vaccine organization, for the research and development of an HIV-AIDS vaccine. Lipoxen is one of a select few to have received such a grant from IAVI  


  • We strengthened our IP position with the granting of two key patents in the US relating to our innovative DNA vaccine delivery technology


  • The technology transfer with Schering-Plough for access to our unique PolyXen drug delivery technology was completed



Financial Review


The financial results for the Group in the period under review were:


Six months

Six months

Year to


to 30/06/08

to 30/06/07

31/12/07


Unaudited

Unaudited

Audited


£'000

£'000

£'000





Turnover

416

517

905

Total pre-tax losses for period

1,962

1,513

3,291

Non-cash component of total pre-tax loss

894

701

1,455

Net cash at end of period

1,213

3,111

2,446

Net asset value at the end of the period

4,596

7,791

6,336



p

p

p





Loss per share - basic and fully diluted

1.51

1.30

2.78

Net asset value per share - basic

3.84

6.51

5.30

Net asset value per share - fully diluted

3.65

6.14

5.01


Non-cash component of total pre-tax losses:


£'000

£'000

£'000





Depreciation of owned assets

133

122

263

R&D costs - equity settled

697

230

520

Share option expense - equity settled

64

349

672


--------

--------

----------

Total principal non-cash items

894

701

1,455


======

=====

=======


Research and development - cash settled



1,046

866

1,836

Other expenses - cash settled


489

538

1,058



-----------

----------

----------

Total expenses - cash settled


1,535

1,404

2,894

Total non-cash items



894

701

1,455




----------

----------

----------

Total administrative expenses


2,429

2,105

4,349


=======

======

======





%

%

%







Research and development - cash settled



68.1

61.7

63.4

Other expenses - cash settled


31.9

38.3

36.6



--------

--------

--------

Total expenses - cash settled


100.0

100.0

100.0


=====

=====

=====


With further progress from our two high value differentiated biologics expected later this year and our portfolio of delivery technologies attracting interest from an ever increasing list of partners, I believe that the coming months should deliver further exciting progress for the Company and we look forward to updating you on our developments.

Brian Richards, CBE

Non-Executive Chairman

London30th July 2008



INDEPENDENT REVIEW REPORT TO THE DIRECTORS OF LIPOXEN PLC



We have been engaged by the company to review the condensed set of financial statements in the half-yearly financial report for the six months ended 30th June 2008 which comprises the Group income statement, the Group balance sheet, the Group cash flow statement, the Group statement of changes in equity and related notes. We have read the other information contained in the half-yearly financial report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of financial statements.


This report is made solely to the company in accordance with the terms of our engagement. Our review has been undertaken so that we might state to the company those matters we are required to state to it in this report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company for our review work, for this report, or for the conclusions we have reached.



Directors' responsibilities


The half-yearly financial report is the responsibility of, and has been approved by, the directors. The directors are responsible for preparing the half-yearly financial report in accordance with the AIM Rules of the London Stock Exchange.


As disclosed in note 1, the annual financial statements of the Group are prepared in accordance with IFRSs as adopted by the European Union. The condensed set of financial statements included in this half-yearly financial report has been prepared using accounting policies consistent with those to be applied in the next annual financial statements and in accordance with International Accounting Standard 34, 'Interim Financial Reporting,' as adopted by the European Union.



Our responsibility


Our responsibility is to express to the company a conclusion on the condensed set of financial statements in the half-yearly financial report based on our review.



Scope of review


We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410, 'Review of Interim Financial Information Performed by the Independent Auditor of the Entity' issued by the Auditing Practices Board for use in the United Kingdom. A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK and Ireland) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.



Conclusion


Based on our review, nothing has come to our attention that causes us to believe that the condensed set of financial statements in the half-yearly financial report for the six months ended 30th June 2008 is not prepared, in all material respects, in accordance with the AIM Rules of the London Stock Exchange and International Accounting Standard 34 as adopted by the European Union.


Emphasis of Matter - Going Concern


In giving our review conclusion on the financial information, which is not qualified, we have considered the adequacy of the disclosures in Note 2 'Fundamental accounting concept - going concern'. This notes that in order to maintain the level of scientific effort required to develop the Company's technologies and to commercialise them to such a degree as will be necessary to become a cash-generative business, the Company will need to access new cash in addition to that available to it at the period end; such new cash will either be generated internally from, as yet, non-contractual feasibility and licensing sources and/or from the raising of new capital. These conditions, along with the other matters explained in Note 2 to the financial information, indicate the existence of a material uncertainty which may cast significant doubt about the Group's ability to continue as a going concern.


The financial information does not reflect any adjustments that would be required to be made if they were to be prepared on a basis other than the going concern basis.

    




PKF (UK) LLP

LondonUK

30th July 2008



CONSOLIDATED INCOME STATEMENT 

FOR THE SIX MONTHS ENDED 30th JUNE 2008    

                

                    



Six months

Six months

Year to



to 30/06/08

to 30/06/07

31/12/07



Unaudited

Unaudited

Audited



£

£

£
















REVENUE


415,968

517,086

905,273



---------------

----------------

---------------

ADMINISTRATIVE EXPENSES




Research and development expenditure

1,743,287

1,095,823

2,355,616

Administrative expenses

685,529

1,009,706

1,993,140



----------------

----------------

----------------

Total


2,428,816

2,105,529

4,348,756



----------------

----------------

----------------

OPERATING LOSS


(2,012,848)

(1,588,443)

(3,443,483)





Finance income

51,174

75,219

152,751

Finance costs

-

-

-


----------------

----------------

----------------

LOSS ON ORDINARY ACTIVITIES BEFORE TAXATION

(1,961,674)

(1,513,224)

(3,290,732)





Income tax credit


157,916

-

-








----------------

----------------

----------------

LOSS FOR THE PERIOD


(1,803,758)

(1,513,224)

(3,290,732)



============

============

=============





Loss per share (pence) - basic and fully diluted


(1.51)p

(1.30)p

(2.78)p



=======

======

=======

        


CONSOLIDATED BALANCE SHEET AS AT 30th JUNE 2008






As at

As at

As at



30/06/08

30/06/07

31/12/07



Unaudited

Unaudited

Audited



£

£

£






NON-CURRENT ASSETS





Property, plant and equipment


769,586

960,519

866,552

Goodwill


1,061,476

1,061,476

1,061,476

Other receivables


-

-

500,000



----------------

----------------

-----------------



1,831,062

2,021,995

2,428,028



----------------

----------------

------------------

CURRENT ASSETS





Trade and other receivables


1,764,324

3,200,571

1,755,640

Cash and cash equivalents


1,213,476

3,110,503

2,445,936



----------------

----------------

------------------



2,977,800

6,311,074

4,201,576

CURRENT LIABILITIES





Trade and other payables


(212,479)

(542,558)

(293,733)



----------------

----------------

-----------------

NET CURRENT ASSETS


2,765,321

5,768,516

3,907,843



----------------

----------------

-----------------

NET ASSETS


4,596,383

7,790,511

6,335,871



===========

===========

===========






CAPITAL AND RESERVES ATTRIBUTABLE





TO THE COMPANY'S EQUITY HOLDERS





Share capital 


2,231,468

2,231,468

2,231,468

Share premium account


22,508,165

22,508,165

22,508,165

Reverse acquisition reserve


(8,252,127)

(8,252,127)

(8,252,127)

Retained earnings


(11,891,123)

(8,696,995)

(10,151,635)



------------------------------------------------

------------------------------------------------

----------------------------------------------

TOTAL EQUITY


4,596,383

7,790,511

6,335,871



===================================================

===================================================

==============================================






Net assets per share - basic


3.84p

6.51p

5.30p



========

======

======






Net assets per share - fully diluted


3.65p

6.14p

5.01p



========

======

======


CONSOLIDATED CASH FLOW STATEMENT 

FOR THE SIX MONTHS TO 30th JUNE 2008






Six months

Six months

Year to



to 30/06/08

to 30/06/07

31/12/07


  

Unaudited

Unaudited

Audited



£

£

£






Cash outflow from operating activities


(1,405,932)

(614,649)

(1,309,836)

Interest received


51,174

75,219

152,751

Taxation received


157,916

-

-



---------------------------------------------------

---------------------------------------------------

---------------------------------------------------

Net cash outflow from operating activities  


(1,196,842)

(539,430)

(1,157,085)



---------------------------------------------------

---------------------------------------------------

---------------------------------------------------

Cash flows from investing activities





Purchase of property, plant and equipment


(35,618)

(112,289)

(159,201)



---------------------------------------------------

---------------------------------------------------

---------------------------------------------------

Cash flows from financing activities





Issue of equity share capital 


-

1,072,000

1,072,000



---------------------------------------------------

---------------------------------------------------

---------------------------------------------------






Net (decrease)/increase in cash and cash equivalents  


(1,232,460)

420,281

(244,286)






Cash and cash equivalents at beginning of period


2,445,936

2,690,222

2,690,222



---------------------------------------------------

---------------------------------------------------

---------------------------------------------------

Cash and cash equivalents at end of period


1,213,476

3,110,503

2,445,936



===================================================

===================================================

============================================








CONSOLIDATED STATEMENT OF CHANGES IN NET EQUITY 

FOR THE SIX MONTHS TO 30th JUNE 2008



Share capital

Share premium

Reverse acquisition reserve

Retained earnings

Total


£

£

£

£

£







At 1st January 2007

    2,210,718

21,456,915

(8,252,127)

(7,532,679)

7,882,827

Loss for six months ended 30th June 2007

-

-

-

(1,513,224)

(1,513,224)

Shares issued for cash

20,750

1,051,250

-

-

1,072,000

Share-based payments

-

-

-

348,908

348,908


________

_________

_________

__________

_________

At 30th June 2007

2,231,468

22,508,165

(8,252,127)

(8,696,995)

7,790,511

Loss for six months ended 31st December 2007

-

-

-

(1,777,508)

(1,777,508)

Share-based payments

-

-

-

322,868

322,868


________

_________

_________

__________

_________

At 31st December 2007

2,231,468

22,508,165

(8,252,127)

(10,151,635)

6,335,871

Loss for six months ended 30th June 2008

-

-

-

(1,803,758)

(1,803,758)

Share-based payments

-

-

-

64,270

64,270


________

_________

_________

__________

_________

At 30th June 2008

2,231,468

22,508,165

(8,252,127)

(11,891,123)

4,596,383


=======

========

========

=========

========


NOTES TO THE INTERIM FINANCIAL STATEMENTS

FOR THE SIX MONTHS TO 30th JUNE 2008

1.   GENERAL


The interim financial statements for the six months ended 30th June 2008 are unaudited and were approved by the Directors of the Company on 30th July 2008. The financial information set out above does not constitute statutory accounts within the meaning of Section 240 of the Companies Act 1985. The information given as comparative figures for the year ended 31st December 2007 was extracted from the Company's audited annual financial statements for that financial year. Those financial statements, which represent the statutory accounts for that year, and on which the auditors gave an unqualified opinion, have been filed with the Registrar of Companies.


The financial information has been prepared in accordance with IAS 34 'Interim Financial Reporting'.


The Company's operations are not subject to seasonality or cyclicality.

 

2.   ACCOUNTING POLICIES


The principal accounting policies and methods of computation have remained unchanged from those used in the preparation of the Company's 2007 annual financial statements.


Fundamental accounting concept - going concern


As an early-stage development life sciences business, the Company has incurred operating losses in the period under review, notwithstanding that substantial clinical and technical progress was also made in the continuing successful development of its proprietary technologies; consequently, the Company was a net consumer of cash.


In order to maintain the level of scientific effort required to develop the Company's technologies and to commercialise them to such degree as will be necessary to become a cash-generative business, the Company will need to access new cash in addition to that available to it at the period end; such new cash will either be generated internally from, as yet, non-contractual feasibility and licensing sources and/or from the raising of new capital.


The Directors have prepared a financial forecast for the period through to 31st December 2009. The forecast includes assumptions that the Group will generate cash inflows in this period from:


  • the ongoing roll-out and licensing of the Company's technologies with its existing collaborative partners;

  • the roll-out and licensing of the Company's technologies with new collaborative partners;

  • the contracting of feasibility studies with new partners, based on the successful outcomes of Phase 1 trials in both insulin and EPO; and

  • the raising of new capital.


The above are, variously, dependent upon the timelines related to the successful execution of concomitant pre-clinical and clinical trials pivotal to the successful continuing development of the Group's technology platforms and the ability to raise finance is dependent upon market conditions.


While considering that platform technology applications to known and marketed drugs confer lower commercial risks than in new drug development, the Directors recognise that there are uncertainties surrounding these core issues. If the Group was to prove unable to generate these additional cash inflows, the cash balance of circa £1.2 million as at 30th June 2008 would be insufficient to fund the Group's activities at their current level for a period of twelve months from the date of approval of these interim financial statements.


However, the Directors have a reasonable expectation that these uncertainties can be managed to successful outcomes, and that, based on such assessment, the Group will have adequate resources to continue in operational existence for the foreseeable future. They have therefore prepared the financial information contained herein on a going concern basis.




The financial information does not reflect any adjustments that would be required to be made if they were to be prepared on a basis other than the going concern basis.


3.    SEGMENTAL ANALYSIS


    The revenue and loss before tax are attributable to the one principal activity of the group. The net assets of the Group at 30th June 200831st December 2007 and 30th June 2007 are wholly attributable to the principal activity. The Group comprises one primary business segment for reporting purposes. There is no secondary reporting segment.


     An analysis of turnover (by location of customer) is given below:


Six months

Six months

Year to


to 30/06/08

to 30/06/07

31/12/07


Unaudited

Unaudited

Audited


£

£

£

United States

339,790

426,641

745,165

Europe

76,178

90,445

160,108


-------------------------------------

--------------------------------------

-------------------------------------


415,968

517,086

905,273


====================================

====================================

====================================


4.    RECONCILIATION OF LOSS BEFORE TAXATION TO 

    CASH OUTFLOWS FROM OPERATING ACTIVITIES


Six months

Six months

Year to


to 30/06/08

to 30/06/07

31/12/07


Unaudited

Unaudited

Audited


£

£

£





Loss before taxation

(1,961,674)

(1,513,224)

(3,290,732)

Adjustments for:




Equity-settled share options

64,270

348,908

671,776

Equity-settled research and development

697,257

229,514


520,037

Depreciation

132,584

122,435

263,314

Investment income

(51,174)

(75,219)

(152,751)


-------------------

-------------------

---------------------


(1,118,737)

(887,586)

(1,988,356)

(Increase)/decrease in receivables

(205,941)

(1,501)

652,907

(Decrease)/increase in payables

(81,254)

274,438

25,613


--------------------

--------------------

---------------------

Cash outflow from operating activities

(1,405,932)

(614,649)

(1,309,836)


=============

============

==============



5    INCOME TAX CREDIT

    

The income tax credit of £157,916 recognised in the six months ended 30th June 2008 represents the amount received in the period following the surrender of certain corporation tax losses arising in prior years. These losses relate to qualifying research and development expenditure, which under current UK legislation may be surrendered in return for a tax rebate.

    

6.    LOSPER SHARE



Six months

Six months

Year to



to 30/06/08

to 30/06/07

31/12/07


  

Unaudited

Unaudited

Audited



£

£

£






Weighted average number of ordinary shares in issue 


119,593,552

116,483,112

118,370,247



---------------------------------------------------

---------------------------------------------------

---------------------------------------------------






Loss after taxation


1,803,758

1,513,224

3,290,732



---------------------------------------------------

---------------------------------------------------

---------------------------------------------------



1.51p

1.30p

2.78p



===================================================

===================================================

============================================








    There is no dilutive effect of share options on the basic loss per share.

        

7.    OTHER RECEIVABLES


In October 2005, Lipoxen Technologies Limited entered into an agreement with its then major shareholder, FDS Pharma Ass (FDS), under which 15,000,000 ordinary shares were allotted in consideration for the provision by FDS of manufacturing and clinical development services. As per a Novation Agreement between FDS, Lipoxen Technologies Limited and the Company dated 16th January 2006, the agreement provides for the allotment of up to 10,174,340 ordinary shares in Lipoxen Plc upon achievement of certain future milestones to the financial value of US$2,670,764 as approved by shareholders at the Extraordinary General Meeting of the Company held on 16th January 2006. An amount of £697,257 (6 months to 30/06/07 - £229,514; year to 31/12/07 -£520,037) has been written off to the income statement in the period in respect of services provided by FDS. An amount of £1,387,594 (30/06/07 - £2,375,374; 31/12/07 - £2,084,851) is included in the balance sheet under other receivables in respect of services still to be provided under the agreement, which are expected to be provided within one year from the balance sheet date (31/12/07 - £500,000 in more than one year from the balance sheet date).


8.    NET ASSET VALUE PER SHARE


    The 'basic' net asset value per share figures are calculated on the basis of the net assets attributable to equity shareholders divided by the number of ordinary shares in issue at the relevant dates.


    The 'fully diluted' net assets per share figures are calculated by adjusting the number of ordinary shares on the assumption of the exercise in full of all options and warrant instruments extant as at the relevant dates where the exercise price of any such instrument is less than the 'basic' net asset value per share.


9.    Copies of the interim report are available to the public free of charge from the Company at London Bioscience Innovation Centre, Royal College StreetLondonNW1 0NH during normal office hours, Saturdays and Sundays excepted, for 14 days from today.


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