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FOR IMMEDIATE RELEASE  

Reliance GeneMedix plc

Results for the six months ended 30 September 2009

Reliance GeneMedix plc (the "Company"), the AIM listed biopharmaceutical company, which is part of the Reliance Life Sciences Group ("RLS"), announces its unaudited interim results for the 6 month period ended 30 September 2009.

Change of Registered Office

The Company also announces that its new registered office is 8th floor, Wigmore Street, London W1U 1QY, United Kingdom.

Issue of shares to Reliance Life Sciences 

RLS, the Company's majority shareholder, has opted to exercise a total of 34,777,032 warrants to subscribe for ordinary shares in the Company at a price of 12.5 pence per share. The warrants were issued to RLS as part of the proposals approved by the Company's shareholders on 12 January 2007. Pursuant to the exercise of the warrants, an application has been made for the admission of 34,777,032 new ordinary shares to trading on AIM. The new ordinary shares, which will be issued fully paid, will rank pari passu in all respects with the existing ordinary shares of the Company. Admission of the new ordinary shares to trading on AIM is expected to occur on 30 December 2009. 

Following the issue of these new ordinary shares, the Company will have 190,494,906 ordinary shares in issue of which RLS will hold 151,602,489, representing 79.58 per cent of the Company's issued share capital as well as 105,597,265 warrants. If the remaining warrants were exercised in full and there were no additional issues of ordinary shares by the Company, RLS would hold 86.86 per cent. of the Company's issued share capital.

Transactions with Reliance Life Sciences

During the period the Company received cash contributions totalling €3.5 million from RLS. At a recent meeting, the Board of the Company and RLS agreed that these receipts should be treated by the Company as a loan from RLS. The loan agreement will be signed shortly and the principal terms of the loan are as follows:

• Total amount: Up to €10 million

• Drawdown period: 1 April 2009 to 31 March 2010

• Interest: 7 per cent. per annum

• Type: Unsecured

• Repayment: In three equal instalments on 31 March 2012, 2013 and 2014

In addition, the Company made sales of Erythropoietin to RLS during the period totaling €409,948. No profit or loss was made by the Company on these sales.

The independent directors of the Company, namely Dr. R. A. Mashelkar, Mr Dileep Choksi and Mr Atul Dayal consider, having consulted with the Company's Nominated Adviser, that the terms of the above transactions are fair and reasonable insofar as the Company's shareholders are concerned.

Chief Executive Officer's statement

We are pleased to present the results for the six months ended 30 September 2009.

Business overview

The development programme for Erythropoietin (EPO) has progressed very well during this period. The Company is pleased to announce that clinical trial patient enrolment for the main clinical trial study has been completed. The Company has continued to supply the product to the Indian market and is working towards registering this product in other geographies. The Company has also made progress in its second product development programme for Granulocyte Colony Stimulating Factor (G-CSF) and is in the process of obtaining regulatory approvals for the clinical study in the European Union.

In view of the reduced manufacturing activity at the Tullamore plant, the Company implemented a shut-down in August 2009. The Company has successfully implemented cost cutting measures on various activities and projects and is well placed to complete the development programme of EPO. 

Financial review

Operating losses of €1.47 million for the period (2008: €2.05 million) are in line with budget and reflect planned expenditure. The Company continues to exercise a strict control on costs in order to help conserve cash.

During the period the Company capitalised development expenditure of €1.92 million (2008: €3.51 million) incurred on the EPO development programme. Current assets and current liabilities are in line with the level of operations of the Company. The expenditure during the period was financed through a loan from RLS (see above).

Consolidated Income Statement

For the six months ended 30 September 2009

	Notes	6 months ended 30 September  2009	6 months ended 30 September 2008	Year ended  31 March 2009
		Unaudited €'000 __________	Unaudited €'000  (Restated)	Audited €'000 __________
Revenue	5	410	235	608
Cost of sales		(410)	(235)	(608)
		__________	__________	__________
Gross profit		-	-	-
		__________	__________	__________
Research and development costs	6	(125)	(16)	(423)
Administrative expenses		(1,214)	(2,004)	(3,591)
		__________	__________	__________
Operating loss		(1,339)	(2,020)	(4,014)
Finance income		1	31	34
Finance costs		(138)	(64)	(85)
Other income		3	-	-
		__________	__________	__________
Loss before taxation		(1,473)	(2,053)	(4,065)
Taxation		-	-	1,297
		__________	__________	__________
Loss for the period		(1,473)	(2,053)	(2,768)
		__________	__________	__________
Loss per share - basic and diluted	8	(0.9c)	(1.3c)	(1.8c)
		__________	__________	__________

  Consolidated Balance Sheet

As at 30 September 2009

	Notes	30 September  2009	30 September 2008	31 March  2009
		Unaudited €'000 ________	Unaudited €'000    Restated	Audited €'000 ________
ASSETS
Non-current assets
Intangible fixed assets		10,166	6,351	8,246
Property, plant and equipment		2,996	3,921	3,521
Investment at cost		10	10	10
Deferred tax assets		1,730	433	1,730
		________	________	________
		14,902	10,715	13,507
		________	________	________
Current assets
Inventories		369	666	647
Trade & other receivables		785	843	768
Restricted cash		180	204	176
Cash and cash equivalents		290	291	169
		________	________	________
		1,624	2,004	1,760
		________	________	________
LIABILITIES
Current liabilities
Trade and other payables		(1,394)	(2,158)	(2,327)
Borrowings		(1,305)	(1,453)	(1,217)
		________	________	________
		(2,699)	(3,611)	(3,544)
		________	________	________
Net current liabilities		(1,075)	(1,607)	(1,784)
		________	________	________
Total assets less current liabilities		13,827	9,108	11,723
		________	________	________
Non-current liabilities
Borrowings		(3,577)	-	-
		________	________	________
		(3,577)	-	-
		________	________	________
Net assets		10,250	9,108	11,723
		________	________	________
Shareholders' equity
Share capital		22,305	22,305	22,305
Shares to be issued		5,134	1,798	5,134
Share premium		39,538	39,538	39,538
Other reserves		3,977	3,983	3,977
Retained losses		(60,704)	(58,516)	(59,231)
		________	________	________
Total shareholders' equity		10,250	9,108	11,723
		________	________	________

Consolidated Cash Flow Statement

For the six months ended 30 September 2009

	Notes	6 months to  30 September  2009	6 months to 30 September 2008	Year to  31 March  2009
		Unaudited €'000 ________	Unaudited €'000      Restated	Audited €'000 ________
Cash flows from operating activities
Cash used in operations	7	(1,670)	(1,138)	(2,506)
Interest paid		-	(36)	(1)
		________	________	________
Net cash used in operating activities		(1,670)	(1,174)	(2,507)
		________	________	________
Cash flows from investing activities
Payment for property, plant and equipment		(2)	(214)	(319)
Receipt from property, plant and equipment		24	-	-
Payment for intangible assets		(1,921)	(3,511)	(5,409)
Interest received		1	64	70
Proceeds from disposal of subsidiary		191	-	-
Increase in restricted cash		(4)	(1)	27
		________	________	________
Net cash flows used in investing activities		(1,711)	(3,662)	(5,631)
		________	________	________
Cash flows from financing activities
Proceeds from exercising share warrants		-	1,798	5,134
Proceeds from borrowings		3,500	-	-
		________	________	________
Net cash flows generated from financing activities		3,500	1,798	5,134
		________	________	________
Net increase/(decrease) in cash and cash equivalents		119	(3,038)	(3,004)
Cash and cash equivalent at the beginning of period		169	3,309	3,309
Net currency translation effect		2	20	(136)
		________	________	________
Cash and cash equivalents		290	291	169
		________	________	________

  Consolidated Statement of Changes in Equity

For the six months ended 30 September 2009

				Other reserves
	Share capital	Share premium	Shares to be issued	Warranty reserve	Capital reserve	Cumulative translation reserve	Retained loss	Total
	€'000	€'000	€'000	€'000	€'000	€'000	€'000	€'000
Balance at 1 Apr 2008 as restated	22,305	39,538	-	4,183	437	(643)	(56,464)	9,356
Loss for the period as originally stated	-	-	-	-	-	-	(2,053)	(2,053)
Currency translation adjustment	-	-	-	-	-	6	-	6
Receipts for new shares to be issued	-	-	1,798	-	-	-	-	1,798
Share based payment	-	-	-	-	-	-	1	1
	______	______	______	______	______	______	______	______
Balance at 30 Sep 2008 as restated	22,305	39,538	1,798	4,183	437	(637)	(58,516)	9,108
	______	______	______	______	______	______	______	______
Loss for the period	-	-	-	-	-	-	(715)	(715)
Currency translation adjustment	-	-	-	-	-	(6)	-	(6)
Receipts for new shares to be issued	-	-	3,336	-	-	-	-	3,336
Share based payment	-	-	-	-	-	-	-	-
	______	______	______	______	______	______	______	______
Balance at 31 Mar 2009	22,305	39,538	5,134	4,183	437	(643)	(59,231)	11,723
	______	______	______	______	______	______	______	______
Loss for the period	-	-	-	-	-	-	(1,473)	(1,473)
Share-based payment	-	-	-	-	-	-	-	-
	______	______	______	______	________	______	______	______
Balance at 30 Sep 2009	22,305	39,538	5,134	4,183	437	(643)	(60,704)	10,250
	______	______	______	______	________	______	______	______

  

Notes to the Consolidated Interim Financial Statements

 

1. General information

These financial statements are the unaudited consolidated interim financial information of Reliance GeneMedix plc, a public limited company incorporated and domiciled in the United Kingdom, with its registered office at Tower 42, 20th Floor, 25 Old Broad Street, London EC2N 1HQ , and its subsidiaries (together, the "Group") for the six months ended 30 September 2009.

The Company is a subsidiary of Reliance Life Sciences Private Limited, India.

The Company has its primary listing on the Alternative Investment Market (AIM) of the London Stock Exchange.

The consolidated financial information for the six months ended 30 September 2009 has been reviewed, not audited.  

The condensed consolidated interim financial statements do not comprise statutory accounts within the meaning of Section 434 of the Companies Act 2006. Statutory accounts for the year ended 31 March 2009 were approved by the Board of Directors on 24 August 2009 and delivered to the Registrar of Companies. The report of the auditors on those accounts was unqualified, did not contain an emphasis of matter paragraph and did not contain any statement under Section 498 of the Companies Act 2006. 

The consolidated financial information for the six months ended 30 September 2009 will be made available at the Registered Office of the Company and on the Company's website: www.genemedix.com.

2.  Basis of preparation

This condensed consolidated interim financial information for the six months ended 30 September 2009 has been prepared in accordance with the Disclosure and Transparency Rules of the Financial Services Authority and with IAS 34, 'Interim Financial Reporting' as adopted by the European Union. The condensed consolidated interim financial information should be read in conjunction with the annual financial statements for the year ended 31 March 2009, which have been prepared in accordance with IFRSs as adopted by the European Union.

3.   Principal risks

The principal risks and uncertainties which could impact the Group have not changed since 31 March 2009. A detailed explanation of those risks and uncertainties can be found in the Directors' Report section of the Annual Report for the year ended 31 March 2009.

 4.  Segment information

The Group only has only one business segment. 

Segmental geographic information is set out below:

	6 month ended 30 Sep 2009 Unaudited			6 month ended 30 Sep 2008 Unaudited			Year ended 31 March 2009 Audited
	_________________________			________________________			________________________
	UK	Ireland	Total	UK	Ireland	Total	UK	Ireland	Total
	€'000	€'000	€'000	€'000	€'000	€'000	€'000	€'000	€'000
Revenue	-	410	410	-	235	235	-	608	608
Cost of sales	-	(410)	(410)	-	(235)	(235)	-	(608)	(608)
	______	______	______	______	______	________	______	______	______
Operating profit	-	-	-	-	-	-	-	-	-
Research & development costs	-	(125)	(125)	(16)	-	(16)	-	(423)	(423)
Administrative expenses	(510)	(704)	(1,214)	(188)	(1,816)	(2,004)	(393)	(3,198)	(3,591)
	______	______	______	______	______	________	______	______	______
Segment loss for the period	(510)	(829)	(1,339)	(204)	(1,816)	(2,020)	(393)	(3,621)	(4,014)
	______	______	______	______	______	________	______	______	______
Other information
Depreciation	64	442	506	35	460	495	129	872	1,001
Amortisation	1	-	1	-	-	-	3	-	3
Impairment	-	-	-	-	-	-	-	-	-
	______	______	______	______	______	________	______	______	______
Balance Sheet
Total assets	1,235	13,561	14,796	598	11,688	12,286	1,024	12,513	13,537
Total liabilities	1,777	4,499	6,276	1,144	2,467	3,611	1,787	1,757	3,544
Capital Expenditure	-	1,924	1,924	-	3,725	3,725	-	5,728	5,728
	______	______	______	______	______	________	______	______	______

5.  Revenue

During the period the Company continued its sales to Indian market on pricing consistent with last year. The attractive pricing offered reflects the current competitiveness of the Indian market.

 6.  Analysis of research and development costs

		6 months to  30 September  2009	6 months to 30 September 2008	Year to  31 March  2009
		Unaudited €'000	Unaudited €'000	Audited €'000
Gross research and development spend		2,047	3,527	5,832
Deduct: capitalised development costs		(1,922)	(3,511)	(5,409)
		________	________	________
Research and development costs expensed		125	16	423
		________	________	________

7.  Cash used in operations

		6 months to  30 September  2009	6 months to 30 September 2008	Year to  31 March  2009
		Unaudited €'000	Unaudited €'000	Audited €'000
Loss for the period		(1,473)	(2,053)	(2,768)
Adjustments for:
- Finance costs		138	64	85
- Investment revenues		(1)	(31)	(34)
- Other financial income		(3)	-	-
- Depreciation of property, plant and equipment		506	495	999
- Deferred Tax		-	-	(1,297)
- Impairment of acquired intellectual property rights		-	-	-
- Amortisation of intangible assets		1	-	3
- Share based payments		-	1	1
		________	________	________
Operating cash flows before movement in working capital		(832)	(1,524)	(3,011)
Decrease/(increase) in inventories		278	(145)	(126)
(Increase)/decrease in trade and other receivables		(210)	378	600
(Decrease)/increase in trade and other payables		(906)	153	31
		________	________	________
Cash used in operations		(1,670)	(1,138)	(2,506)
		________	________	________

8.  Loss per share

The earnings and weighted average number of ordinary shares used in the calculation of basic loss per share are as follows:

		6 months to  30 September  2009	6 months to 30 September 2008	Year to 31 March 2009
Loss for the period (€'000)		(1,473)	(2,053)	(2,768)
Weighted average number of shares ('000)		155,718	155,718	155,718
		__________	__________	__________
Loss per share - basic and diluted		(0.9c)	(1.3c)	(1.8c)
		__________	__________	__________

In the six months ended 30 September 2009, the Group had no dilutive potential ordinary shares in issue because it was loss making.

9.  Related party transactions

Trading transactions

During the period, the Company made sales of EPO worth €409,948 and sold used equipment worth €23,713 to RLS.

During the period, clinical research services worth €17,400 were received from RLS and clinical services worth €76,012 were provided to RLS. 

The balance due from RLS as at 30 September 2009 was €502,627.

During the period, clinical research services worth €79,177 were received from Reliance Clinical Research Services Sp. Z o.o., Poland ("RCRSS"), a subsidiary of RLS. The balance due to RCRSS as at 30 September 2009 is €104,255. During the period, the Company made sales of packing materials worth €1,552 to Reliance Biopharmaceuticals Private Limited, India, a subsidiary of RLS. The balance due from Reliance Biopharmaceuticals Private Limited, India as on 30 September 2009 is €1,552.

Loans from related parties

During the period, the Company received an amount of €3.5 million from RLS as a loan.

10.   Events occurring after the balance sheet date

There are no events after 30 September 2009 that require disclosure or adjustment to these financial statements.

11.   Statement of Directors' Responsibilities

The directors confirm that this condensed consolidated interim financial information has been prepared in accordance with IAS 34 as adopted by the European Union and that the interim management report includes a fair review of the information required by the DTR 4.2.7 and DTR 4.2.8, namely: 

• an indication of important events that have occurred during the first six months and their impact on the condensed set of financial statements, and a description of the principal risks and uncertainties for the remaining six months of the financial year; and 

• material related-party transactions in the first six months and any material changes in the related-party transactions described in the last annual report. 

The directors of Reliance GeneMedix plc are listed in the Annual Report for 31 March 2009. A list of current directors is maintained on the Reliance GeneMedix plc website: www.genemedix.com. 

By order of the Board 

Vinay Ranade

Chief Executive Officer

24 December 2009

ENDIR FEWFSLSUSELE