Published: February 20, 2006
Antisoma plc reports half-year results
London, UK: 21 February 2006 Cancer drug
developer Antisoma plc (LSE: ASM; USOTC: ATSMY) announces its interim
financial information for the period ended 31 December 2005.
Highlights:
* AS1404 phase II lung cancer study
o Recruitment completed
o Promising preliminary findings reported
* AS1411
o Encouraging long-term follow-up data reported from phase I renal
cancer patients
o Phase I trial reopened in renal and lung cancers
o US orphan drug status granted in renal cancer
* £6.55 million raised through a placing of ordinary shares
* Level 1 American Depositary Receipt Program launched
* Cash and short-term deposits at 31 December 2005 of £23.6 million
(30 June 2005: £25.0 million)
* Operating losses for the six months to 31 December 2005 of £9.6
million (six months ended 30 June 2005: £7.8 million)
Dr Barry Price, Chairman of Antisoma, commented, "In October we
announced promising preliminary findings from our phase II study of
AS1404 in lung cancer. This marked the beginning of an exciting
period of newsflow. Over the next six months, we will receive
important data on all three of our clinical-stage products, including
key data on time to tumour progression from the lung cancer study."
For further information please visit the Company's web site at
www.antisoma.com
Enquiries:
Glyn Edwards +44 (0)20 8799 8200
Chief Executive Officer, Antisoma plc +44 (0)7909 915 068
Raymond Spencer +44 (0)20 8799 8200
Chief Financial Officer, Antisoma plc
Mark Court, Lisa Baderoon, Rebecca Sky-Dietrich +44 (0)20 7466 5000
Buchanan Communications
Except for the historical information presented, certain matters
discussed in this statement are forward looking statements that are
subject to a number of risks and uncertainties that could cause
actual results to differ materially from results, performance or
achievements expressed or implied by such statements. These risks and
uncertainties may be associated with product discovery and
development, including statements regarding the Group's clinical
development programmes, the expected timing of clinical trials and
regulatory filings. Such statements are based on management's current
expectations, but actual results may differ materially.
Chairman's report
During the past six months we have announced significant developments
from a number of our programmes, notably preliminary findings from
one of the phase II studies of our vascular disrupting agent, AS1404.
Meanwhile, we have maintained our cash position by executing a small
fundraising.
AS1404 is in three separate phase II studies in lung, prostate and
ovarian cancers. The lung cancer study reached its patient
recruitment target in August, and in October we announced promising
preliminary findings. At that time, initial data were available from
47 patients, of whom 23 had received AS1404 plus chemotherapy and 24
chemotherapy alone. Comparison of tumour responses favoured the
AS1404 group, with a particularly marked difference in the proportion
of patients showing progressive disease after treatment. The
side-effect profile in patients receiving AS1404 on top of
chemotherapy was consistent with that seen after chemotherapy alone.
Follow-up of patients continues, and we plan to present further data
at medical congresses. Important findings on time to disease
progression are expected during the first half of 2006, with survival
data to follow. We also expect to present data from the prostate and
ovarian cancer studies during this year. AS1404 acts against tumour
blood vessels, and therefore has potential against a wide variety of
cancers.
Another of our clinical products, the aptamer AS1411, is progressing
through phase I development. The initial phase I trial reported
promising results in June and encouraging long-term follow-up data in
November. This study included three patients with advanced renal
cancer. Two of these patients experienced a long period of disease
stabilisation before relapse and the third continued to maintain a
near-complete response 16 months after treatment. In September, we
reopened the phase I trial to recruit additional patients with renal
and lung cancers. Data from the newly enrolled patients will be
available this year. Meanwhile, we have gained US orphan drug status
for use of AS1411 in renal cancer, providing a seven-year period of
market exclusivity if AS1411 is approved as a treatment for this
disease. Renal cancer is likely to be an important indication for
further development, and may provide opportunities for expedited
progress towards the market. However, based on the breadth of
supporting preclinical data, Antisoma also expects its development
programme to encompass other cancers.
Our third clinical product, R1550, is being tested by our partner,
Roche, in a phase I trial in metastatic (spreading) breast cancer.
The trial examines the safety, dosing and handling of the drug, as
well as looking for signs of anti-cancer activity. We expect results
during the first half of 2006. R1550 could have potential against
various cancers because the target for the drug is found in many
solid tumours.
In December we announced some developments in our preclinical
programmes. We reported that AS1410, the former lead candidate from
our programme of telomere targeting agents, would be replaced with an
alternative molecule. Work is ongoing to select a candidate suitable
to enter clinical trials. We also presented further data in support
of our antibody-cytokine drug, AS1409, and signalled our intention to
start clinical trials of this product during mid-2006. Finally, we
announced that, having made good progress in overcoming some
manufacturing obstacles, we were preparing to advance our targeted
apoptosis drug AS1406 into the final stages of preclinical
development.
Also in December, we announced the establishment of a Level One
Program of American Depositary Receipts, enabling US investors in
Antisoma to trade in a dollar-denominated security. This step helps
prepare Antisoma for a full listing on NASDAQ, planned to take place
when the Company's situation and market conditions allow.
Financial Review
Results of operations - six months ended 31 December 2005
Revenues for the six months ended 31 December 2005 were £1.3 million
and represent deferred recognition of a part of the up-front payments
(totalling £23.2 million) received from Roche under the alliance
agreement signed in November 2002. Revenues for the six months ended
31 December 2004 were £4.8 million, of which £4.3 million represented
recognition of deferred revenue (revenues for the six months ended 30
June 2005 were £1.5 million). The fall in deferred revenue compared
with the equivalent period in 2004 is due principally to the full
recognition by 31 December 2004 of the portion of the upfront
payments associated with Antisoma's former product R1549.
Operating expenses have increased by £3.2 million to £10.9 million in
the six-month period ended 31 December 2005 (six months ended 31
December 2004: £7.7 million; six months ended 30 June 2005: £9.3
million). Research and Development expenses have increased by £3.5
million to £8.6 million (six months ended 31 December 2004: £5.1
million; six months ended 30 June 2005: £7.2 million). This reflects
the costs of the reopened phase I trial of AS1411, the extension of
the AS1404 programme into two additional phase II studies and
pre-clinical development costs associated with AS1409. General and
administrative costs have fallen slightly to £2.3 million (six months
ended 31 December 2004: £2.6 million; six months ended 30 June 2005:
£2.1 million).
Losses for the six months ended 31 December 2005, net of £0.9 million
R&D tax credit, were £8.2 million (six months ended 31 December 2004:
£0.7 million; six months ended 30 June 2005: £6.1 million).
Liquidity and capital resources
Cash consumed by the Group for the six months ended 31 December 2005,
before movements in short-term deposits, financing items and
acquisitions, was £8.0 million (six months ended 31 December 2004:
£6.6 million; six months ended 30 June 2005: £6.5 million). Following
a placement in December 2005 of 33.6 million new ordinary shares to
institutional investors, which raised £6.55 million before costs, the
cash resources available to the Group totalled £23.6 million (31
December 2004: £32.3 million; 30 June 2005: £25.0 million)
Loss per share
The loss per share for the half-year ended 31 December 2005 was 2.40p
(six months ended 31 December 2004: 0.25p).
International Financial Reporting Standards ("IFRS")
This interim statement, which is unaudited, has been prepared on a
basis that is consistent with the accounting policies and
presentation expected to be used in the Group's annual report and
financial statements for the year ending 30 June 2006, which will
comply with International Financial Reporting Standards. The change
to reporting under IFRS has affected the presentation and reporting
of certain figures, most notably, for share-based payments, business
combinations and intangible assets under IFRS 2, IFRS 3 and IAS 38,
respectively.
The unaudited interim figures for the six months to 31 December 2004
and the full year to 30 June 2005 have been restated in accordance
with IFRS. A reconciliation to the prior basis of preparation under
UK GAAP is set out in note 5 of these accounts.
Future operations and revenue recognition
The future development strategy for AS1404 will be dependent upon
findings from the three ongoing phase II studies and upon whether
Roche decides to exercise its option to retain rights to the drug and
hence support phase III development. Should Roche exercise its
option, it will be responsible for all phase III costs and will make
a milestone payment to Antisoma. Up-front payments from Roche related
to R1549 and R1550 have now been fully recognised. Excluding any
further milestones, revenues still to be recognised through to
November 2007 amount to £1.2 million.
Outlook
We have an exciting year in prospect, with expected newsflow
including important clinical data from the AS1404, AS1411 and R1550
programmes and entry of AS1409 into clinical trials.
Barry Price
Chairman
20 February 2006
Consolidated income statement
for the six months ended 31
December 2005
6 months 6 months
ended ended Year ended
31 Dec 05 31 Dec 04 30 Jun 05
unaudited unaudited unaudited
Notes £'000 £'000 £'000
Revenue 1,287 4,755 6,268
Research and development costs (8,581) (5,070) (12,285)
Administrative expenses (2,339) (2,590) (4,697)
Total operating expenses (10,920) (7,660) (16,982)
Operating loss (9,633) (2,905) (10,714)
Interest receivable 520 825 1,505
Loss before taxation (9,113) (2,080) (9,209)
Taxation 948 1,400 2,477
Loss for the period (8,165) (680) (6,732)
Loss per ordinary share
Basic and diluted 2 2.40p 0.25p 2.29p
All income and expenses above arise from continuing operations.
Consolidated statement of recognised
income and expense
for the six months ended 31
December 2005
6 months 6 months
ended ended Year ended
31 Dec 05 31 Dec 04 30 Jun 05
unaudited unaudited unaudited
£'000 £'000 £'000
Loss for the financial period (8,165) (680) (6,732)
Exchange translation difference on
consolidation 885 - 724
Total recognised expense for the
period (7,280) (680) (6,008)
Consolidated balance sheet
as at 31 December 2005
31 Dec 05 31 Dec 04 30 Jun 05
unaudited unaudited unaudited
Notes £'000 £'000 £'000
ASSETS
Non-current assets
Goodwill 6,538 - 6,177
Intangible assets 20,010 1,354 19,118
Property, plant and equipment 770 1,082 979
27,318 2,436 26,274
Current assets
Trade and other receivables 1,712 2,427 2,698
Short-term deposits 10,000 12,181 7,500
Cash and cash equivalents 13,584 20,076 17,544
25,296 34,684 27,742
LIABILITIES
Current liabilities
Trade and other payables (4,396) (5,621) (5,759)
Net current assets 20,900 29,063 21,983
Total assets less current
liabilities 48,218 31,499 48,257
Non-current liabilities
Deferred tax liabilities (6,538) - (6,177)
Trade and other payables (573) (1,199) (885)
Provisions (64) (27) (42)
(7,175) (1,226) (7,104)
Net assets 41,043 30,273 41,153
Shareholders' equity
Share capital 4 8,029 6,993 7,659
Share premium 4 91,383 69,683 84,942
Other reserves 4 5,909 4,300 5,024
Retained loss 4 (64,278) (50,703) (56,472)
Total shareholders' equity 41,043 30,273 41,153
Consolidated cash flow statement
for the six months ended 31
December 2005
6 months 6 months
ended ended Year ended
31 Dec 05 31 Dec 04 30 Jun 05
unaudited unaudited unaudited
£'000 £'000 £'000
Cash flows from operating
activities
Cash used in operations (10,062) (7,192) (14,917)
Interest received 383 837 1,561
Research and development tax
credit received 1,698 - 877
Net cash used in operating
activities (7,981) (6,355) (12,479)
Cash flows from investing
activities
Purchase of property, plant and
equipment (38) (90) (130)
Purchase of intangible assets - (130) (430)
(Purchase)/sale of short-term
deposits (2,500) 1,319 6,000
Cash and cash equivalents acquired
with subsidiaries - - 1
Acquisition expenses - - (704)
Net cash (used in)/from investing
activities (2,538) 1,099 4,737
Cash flows from financing
activities
Proceeds from issue of ordinary
share capital 6,788 - -
Expenses paid in connection with
issue of ordinary share capital (229) - (46)
Net cash received from/(used in)
financing activities 6,559 - (46)
Net decrease in cash and cash
equivalents (3,960) (5,256) (7,788)
Cash and cash equivalents at
beginning of period 17,544 25,332 25,332
Cash and cash equivalents at end
of period 13,584 20,076 17,544
Notes to the interim financial statements
for the six months ended 31 December 2005
1. Basis of preparation and accounting policies
Basis of preparation
The Group is required to prepare consolidated financial statements in
accordance with International Financial Reporting Standards and
applicable interpretations ("IFRS"), as adopted for use in the EU,
and with those parts of the Companies Act 1985 applicable to
companies reporting under IFRS, for the year ended 30 June 2006.
The interim financial information for the six months ended 31
December 2005 was approved by the Board of Directors on 14 February
2006 and is unaudited. The auditors have carried out a review in
accordance with APB Bulletin 1999/4 and their report is set out
below.
The interim financial information has been prepared by Antisoma plc
in accordance with accounting policies under IFRS as adopted for use
in the EU and expected to be endorsed by 30 June 2006. In preparing
the underlying financial information, the Directors have applied
certain first-time adoption provisions allowed by IFRS 1 based on
those standards and interpretations that they expect to be effective
and the policies they expect to adopt in the financial statements as
at 30 June 2006. The IFRS and IFRIC interpretations that will be
applicable at 30 June 2006, including those that will be applicable
on an optional basis, are not known with certainty at the time of
preparing this interim financial information. Comparative financial
information presented for the periods ended 31 December 2004 and 30
June 2005 has been restated to conform to the same basis of
preparation. The comparative information is unreviewed and unaudited.
The interim report does not constitute statutory financial statements
within the meaning of section 240 of the Companies Act 1985.
Statutory accounts for the year ended 30 June 2005, which were
prepared under accounting principles generally accepted in the UK,
have been delivered to the Registrar of Companies and are available
on request from the Company Secretary, Antisoma plc, West Africa
House, Hanger Lane, Ealing, London W5 3QR. The auditors' report on
those accounts was unqualified and did not contain any statement
under section 237(2) or section 237(3) of the Companies Act 1985.
The Group has established the IFRS accounting policies that it
expects to apply in its financial statements for the year ended 30
June 2006 and applied these policies and applicable IFRS 1 transition
provisions to determine the opening balance sheet at its date of
transition, being 1 July 2004. The impact of transition from UK GAAP
to IFRS on the Group's shareholders' funds as at 30 June 2005 and on
the Group's income statement for the six months ended 31 December
2004 is discussed in note 5.
Transitional arrangements
The adoption of the provisions set out in IFRS 1 and the assumptions
made about the standards and interpretations expected to be effective
as at 30 June 2006 are outlined below:
- Business combinations: a first-time adopter may elect not to apply
IFRS 3 - "Business combinations" retrospectively to business
combinations that occurred before the date of transition to IFRS. The
Group elected to take advantage of this exemption, not applying IFRS
3 to the business combinations that occurred before the 1 July 2004,
the Group's date of transition.
- Share-based payments: a first-time adopter is encouraged, but not
required, to apply IFRS 2 - "Share-based payments" to equity
instruments that were granted on or before 7 November 2002 and had
not vested by 1 January 2005. The Group elected to take advantage of
the IFRS 1 exemption and has applied IFRS 2 to equity instruments
granted after 7 November 2002 only.
- Financial instruments: a first-time adopter need not restate the
comparative information in compliance with IAS 32 - "Financial
instruments: disclosure and presentation" and IAS 39 - "Financial
instruments: recognition and measurement". The Group elected to take
advantage of this exemption.
Summary of principal accounting policies
(a) Basis of consolidation
The consolidated financial information includes the financial
information of the Company and its subsidiary undertakings.
The acquisition of Antisoma Research Limited was a business
combination involving entities under common control. The financial
statements of Antisoma Research Limited have been consolidated using
the principles of "merger accounting". The principles of merger
accounting are that the assets and liabilities of the acquired
company are not restated to fair value, no goodwill arises and the
consolidated financial information incorporates the combined
companies' results as if the companies had always been combined.
In line with the provisions of IFRS 1, acquisitions completed before
1 July 2004 have not been accounted for under IFRS 3. Instead, the
historical UK GAAP accounting treatment has been retained.
All other subsidiaries have been consolidated using the principles of
acquisition accounting under IFRS 3. Under IFRS 3, the results of
acquired subsidiaries are included in the consolidated income
statement from the date that they are acquired. The cost of an
acquisition is the fair value of consideration, including costs
directly attributable to the acquisition. All of the subsidiary's
assets and liabilities that exist at the date of acquisition are
recorded at their fair values. The excess of the cost of acquisition
over the fair value of the Company's share of the identifiable net
assets acquired is recorded as goodwill.
Intra-group transactions, profits and balances are eliminated in full
on consolidation.
(b) Investments
In the Company's accounts, investments in subsidiary undertakings are
initially stated at cost. Provision is made for any permanent
diminution in the value of these investments. Short-term investments
represent cash held on deposit with initial maturities in excess of
three months. Such investments are held at cost.
(c) Goodwill
Goodwill arising on consolidation represents the excess of the fair
value of consideration over the fair value of identifiable net assets
acquired. Goodwill is recognised as an asset and reviewed for
impairment at least annually and whenever there is an indicator of
impairment. Impairment losses in respect of goodwill are not
reversed. As permitted by IFRS 1, goodwill written off prior to
transition to IFRS has not been reinstated as an asset and will not
be included in determining any subsequent profit or loss on disposal.
(d) Intangible fixed assets
Intangible fixed assets other than goodwill, which comprise licences,
patents and product rights, are recorded at their fair values at
acquisition date and are amortised on a straight-line basis over
their estimated useful economic lives from the time they are
available for use. Where a product is at a relatively early stage of
development the full cost of the licences or rights purchased are
capitalised but not amortised until that product is available for
use.
Assets that are not yet available for use are not subject to
amortisation and are tested at least annually or whenever there is an
indicator of impairment. Assets that are subject to amortisation or
depreciation are reviewed for impairment whenever events or changes
in circumstances indicate that the carrying amount may not be
recoverable. An impairment loss is recognised in the income statement
for the amount by which the asset's carrying value exceeds its
recoverable amount. For the purpose of assessing impairment, assets
are grouped at the lowest levels for which there are separately
identifiable cash flows (cash-generating units). The recoverable
amount is the higher of an asset's fair value less costs to sell and
value in use. In assessing value in use, the estimated future cash
flows are discounted to their present value using a pre-tax discount
rate that reflects current market assessments of the time value of
money and the risks specific to the asset.
(e) Tangible fixed assets
The cost of tangible fixed assets is their purchase cost, together
with any incidental costs of acquisition. Depreciation is provided to
write off the cost or valuation, less estimated residual values, of
all fixed assets, over their expected useful lives. It is calculated
at the following rates:
Office equipment 15% per annum
Computers - office and laboratory 33% per annum
Office fixtures and fittings 33% per annum
Laboratory fixtures and fittings 20% per annum
Laboratory equipment - owned 20% per annum
Laboratory equipment - leased 20% per annum
Provisions are made where necessary to reflect any impairment in the
value of the tangible fixed assets.
(f) Cash and cash equivalents
Cash and cash equivalents comprise cash in hand and deposits with
banks that have a maturity of three months or less from the date of
inception.
Deposits that have a maturity greater than three months but less than
a year from the date of inception have been disclosed separately as
short-term deposits.
(g) Deferred taxation
Deferred income tax is provided in full, using the liability method,
on temporary differences arising between the tax bases of assets and
liabilities and their carrying amounts in the consolidated financial
statements in accordance with IAS 12 - "Income taxes". Deferred tax
assets and liabilities are not discounted. Deferred tax is not
accounted for if it arises from initial recognition of an asset or
liability in a transaction, other than a business combination, that
at the time of the transaction affects neither accounting nor taxable
profit or loss. Valuation allowances are established against deferred
tax assets where it is more likely than not that some portion or all
of the asset will not be realised.
(h) Finance and operating leases
Costs in respect of operating leases are charged on a straight-line
basis over the lease term.
Leasing agreements that transfer to the Group substantially all the
benefits and risks of ownership of an asset are treated as if the
asset had been purchased outright. The assets are included in fixed
assets and the capital elements of the leasing commitments are shown
as obligations under finance leases. The lease rentals are treated as
consisting of capital and interest elements. The capital element is
applied to reduce the outstanding obligations and the interest
element is charged against profit in proportion to the reducing
capital element outstanding. The Group ensures that such leases
include an option to purchase the asset at the end of the lease term
and so assets held under finance leases are depreciated over the
useful lives of equivalent owned assets.
(i) Revenue
Revenue, which excludes value added tax, represents the fair value of
goods and services supplied. Amounts received or receivable under
research and development contracts and collaborative research
agreements are recognised as revenue in the period in which the
related costs are incurred. Amounts received or receivable in respect
of milestone payments are recognised as revenue when the specific
conditions stipulated in the licence agreements have been satisfied
or are recognised over the period to completion of the relevant phase
of development, which is consistent with the principle that revenue
is recognised in accordance with the Group's performance under the
relevant contract. Amounts receivable as option fees to access the
Group's intellectual property are spread over the option period.
Revenue arising from collaborative agreements consisting of multiple
elements is allocated to those elements in accordance with
contractual terms, which are indicative of the fair values of the
individual elements. All costs relating to these development
programmes are recorded as research and development expenditure. As
revenue represents contributions towards costs incurred, no amounts
have been allocated to costs of sales.
(j) Segmental reporting
The Directors are of the opinion that under IAS 14 - "Segmental
information" the Group has only one business segment, being drug
development. In addition, as the Group's activities are virtually all
UK based, the Directors are of the opinion that there is only one
geographical segment.
(k) Research and development expenditure
Research and development expenditure is currently written off to the
income statement as it is incurred. Due to the regulatory and other
uncertainties inherent in the development of the Group's products,
the criteria for development costs to be recognised as an asset, as
prescribed by IAS 38 - "Intangible assets", are not met until the
product has been submitted for regulatory approval and when it is
probable that future economic benefits will flow to the Group. The
Group does not currently have any such internal development costs
that qualify for capitalisation as intangible assets.
(l) Financial instruments
Forward exchange contracts are revalued to fair value with net
unrealised gains and losses being shown as part of debtors or
creditors. The premium or discount on these contracts (that is, the
difference between spot and forward rate) is recognised as part of
interest payable or receivable over the term of the contract, if
material.
(m) Foreign currency
The functional currency of each Group entity is the currency of the
primary economic environment in which the entity operates.
Transactions denominated in foreign currencies have been translated
into the functional currency of the Group entity at actual rates of
exchange ruling on the date of the transaction. Monetary assets and
liabilities denominated in foreign currencies have been translated at
rates ruling at the balance sheet date. Exchange differences have
been taken to the income statement.
The results of overseas operations are translated at average exchange
rates and their balance sheets are translated at the rates ruling at
the balance sheet date. Exchange differences arising on translation
of the opening net assets and results of overseas operations are
dealt with through reserves.
(n) Pension costs
Retirement benefits to employees and Directors are provided by
defined contribution pension schemes. The assets of these schemes are
held separately from those of the Group in independently administered
funds. Contributions made by the Group are charged to the income
statement in the year to which they relate.
(o) Share options
In accordance with IFRS 2 - "Share-based payment", share options are
measured at fair value at their grant date. The fair value is charged
to the income statement over the share option's vesting period. When
the option is exercised, the proceeds received (net of any
transaction costs) are credited to share capital and share premium.
National Insurance payable on the exercise of share options is
treated as a cash-settled share-based payment under IFRS 2 and the
Group makes charges to the income statement based on an estimate of
the fair value of the option at each period end. Where the liability
is virtually certain to be offset by amounts recoverable from those
to whom the options have been granted, a receivable from the relevant
employees is also recognised.
2. Loss per share
6 months ended 6 months ended Year ended
31 Dec 05 31 Dec 04 30 Jun 05
unaudited unaudited unaudited
Loss for the period
(£'000) (8,165) (680) (6,732)
Weighted average
number of shares
('000) 340,783 267,262 294,217
Basic and diluted
loss per share (2.40)p (0.25)p (2.29)p
The Company has no dilutive potential ordinary shares in issue
because it is loss making. Following the Company's placing of shares
in December 2005, the weighted average number of shares and therefore
the loss per share for the six months ended 31 December 2004 and the
year ended 30 June 2005 have been restated to take account of the
bonus element of the placing. The bonus arises because the placing
was made at a discount to the market price.
3. Taxation
A Research & Development tax credit of £0.95 million has been
recognised in the six months ended 31 December 2005 (2004: £1.4
million). The tax credit for the period ended 31 December 2005 is
made up of £0.85 million relating to the six months ended 31 December
2005 and £0.1 million relating to the excess of the amounts received
for the year ended 30 June 2005 over the amounts previously provided.
4. Statement of changes in shareholders' equity
Other Other
Share Share reserves: reserves: Retained
Total
capital premium retranslation other loss
unaudited unaudited unaudited unaudited unaudited
unaudited
£'000 £'000 £'000 £'000 £'000
£'000
At 1 July
2004 6,993 69,683 - 4,300 (50,235)
30,741
Loss for
the period - - - - (680)
(680)
Share
options:
value of
employee
services - - - - 212
212
At 31
December 2004 6,993 69,683 - 4,300 (50,703)
30,273
At 1 July
2004 6,993 69,683 - 4,300 (50,235)
30,741
Loss for the
period - - - - (6,732)
(6,732)
New share
capital
issued 666 15,305 - - -
15,971
Expenses on
share issues
taken to
share premium - (46) - - -
(46)
Share
options:
value of
employee
services - - - - 495
495
Foreign
exchange
adjustments
on
consolidation - - 724 - -
724
At 30 June
2005 7,659 84,942 724 4,300 (56,472)
41,153
At 1 July
2005 7,659 84,942 724 4,300 (56,472)
41,153
Loss for the
period - - - - (8,165)
(8,165)
New share
capital
issued 370 6,670 - - -
7,040
Expenses on
share issues
taken to
share premium - (229) - - -
(229)
Share
options:
value of
employee
services - - - - 359
359
Foreign
exchange
adjustments
on
consolidation - - 885 - -
885
At 31
December 2005 8,029 91,383 1,609 4,300 (64,278)
41,043
5. Reconciliation of net assets and loss under UK GAAP to IFRS
Antisoma plc reported under UK GAAP in its previously published
financial statements for the year ended 30 June 2005 and half year
ended 31 December 2004. The analysis below shows the reconciliation
of net assets and loss as reported under UK GAAP as at 30 June 2005
and 31 December 2004 to the revised net assets and loss under IFRS as
reported in these financial statements. In addition, there is a
reconciliation of equity under UK GAAP to IFRS at the transition date
for the Group, being 1 July 2004.
6 months ended Year ended
31 Dec 04 30 Jun 05
unaudited unaudited
£'000 £'000
Reconciliation of loss for the
period Note
Loss for the period reported
under UK GAAP (558) (7,135)
Adjustments:
Share option charge (a) (212) (495)
Employer's national insurance charge
on share options (b) - 30
Goodwill amortisation (c) - 463
Holiday pay accrual (d) 60 10
Acquired intellectual property (e) 30 430
Impairment of intellectual
property (e) - (35)
Loss for the period reported
under IFRS (680) (6,732)
31 Dec 04 30 Jun 05 01 Jul 04
unaudited unaudited unaudited
£'000 £'000 £'000
Reconciliation of shareholders'
equity Note
Shareholders' equity as reported
under UK GAAP 28,934 38,276 29,492
Adjustments:
Reversal of goodwill calculated
under UK GAAP (f) - (16,206) -
Intellectual property acquired as
part of a business combination (g) - 16,669 -
Exchange difference on foreign
subsidiary's intellectual property (g) - 730 -
Goodwill as part of a business
combination (g) - 6,177 -
Deferred taxation liability as
part of a business combination (g) - (6,177) -
Acquired intellectual property (e) 1,354 1,754 1,324
Impairment of intellectual
property (e) - (35) -
Employer's national insurance
liability on share options (b) (15) - (14)
Employer's national insurance
asset on share options (b) 16 31 15
Holiday pay accrual (d) (16) (66) (76)
Cash and cash equivalents (cash at
bank and in hand) (h) 4,527 16,437 8,881
Short-term deposits (h) (4,527) (16,437) (8,881)
Total shareholders' equity 30,273 41,153 30,741
Explanation of reconciling items between UK GAAP and IFRS
(a) Share option charge
In accordance with IFRS 2 - "Share-based payment", a charge is made
for all share-based payments including share options based on the
fair value of the instrument issued. Under UK GAAP, the charge to the
income statement, if any, is based on the difference between the
exercise price and the market price on the date of grant. Since
Antisoma has historically granted employee share options where the
share price at the date of grant equals the exercise price, there has
been no charge recorded under UK GAAP.
Under IFRS the charge in the income statement for granted share
options is based on the fair value of the options at grant date and
is charged over the vesting period. Estimates of leaver rates are
taken into account over the vesting period. A charge has been
recognised for all awards granted since 7 November 2002 and not
vested by 1 January 2005. It is charged to the same expense category
as the costs of the employee to whom the share award has been made.
An equivalent amount is credited to the retained loss reserve in the
balance sheet, resulting in a nil effect on net assets.
(b) Employer's national insurance charge on share options
Under UK GAAP the potential liability for employer's National
Insurance on share options was calculated at each period end based on
the current employer's National Insurance rate and the number of
share options that had an exercise price below the share price at the
period end. Under IFRS the potential liability for employer's
National Insurance on share options is calculated based on the fair
value of each option at the period end and the current employer's
National Insurance rate. For options that are within three years of
grant date the potential liability builds up over the three-year
vesting period. For vested options the full liability is accrued. For
share options where the employee has agreed to pay the National
Insurance liabilities on exercise a National Insurance asset has been
created and the amount credited to the income statement.
(c) Goodwill amortization
Under UK GAAP goodwill on the acquisition of Aptamera, Inc. had been
amortised over its estimated expected useful life, which the
Directors determined as 15 years. Under IFRS, goodwill is considered
to have an indefinite life and so is not amortised, but is subject to
annual impairment review. Therefore the goodwill charge made under UK
GAAP in the year to 30 June 2005 in relation to the acquisition of
Aptamera, Inc. is not recorded under IFRS. The IFRS treatment of the
Aptamera, Inc. acquisition is set out in (g) below.
(d) Holiday pay accrual
The Group's holiday period runs for each calendar year and the Group
allows employees to carry over a maximum of 5 days holiday into the
next year as long as they are used by the 31 March of that year.
Under UK GAAP holiday pay accruals were not calculated; however,
under IFRS the Group has calculated its potential holiday pay
liability at each period end.
(e) Acquired intellectual property
The Group has a policy of in-licensing products for further
development and therefore has acquired substantial intellectual
property over the years. Under UK GAAP these products were deemed to
be at too early a stage to capitalise and, because it was not
considered possible to demonstrate future economic benefits, such
costs were written off. Under IFRS the probability criterion is
always considered to be satisfied in the separate acquisition of an
intangible asset, and so the Group must capitalise all acquired
intellectual property. This has led to a reduction in the losses and
the creation of an intangible asset on the balance sheet. The
acquired intellectual property is reviewed for impairment at least
annually.
(f) Reversal of goodwill calculated under UK GAAP
Under UK GAAP the acquisition of Aptamera, Inc. on 4 February 2005
led to the creation of goodwill of £16.7 million. The goodwill was
the difference between the fair value of the consideration of £16.0
million plus the costs of the acquisition of £0.7 million and the net
liabilities of Aptamera, Inc. on acquisition. This goodwill was then
amortised over 15 years on a straight-line basis as detailed in (c)
above. Under IFRS the treatment of the acquisition of Aptamera, Inc.
is different and therefore the goodwill balance has been reversed;
see below.
(g) Business combination
On 4 February 2005, a new wholly-owned subsidiary, Aptamera, Inc.,
was acquired by the issue of 66,500,041 ordinary shares of 1p each,
whose fair market value was deemed to be 24p per share (based on the
closing share price on 3 February 2005). Details of the book value
and fair value of the assets and liabilities of Aptamera, Inc. under
IFRS as at 4 February 2005 are set out below:
Book values Adjustments Fair values
£'000 £'000 £'000
Fixed assets
- intangible -
intellectual property
rights - 16,669 16,669
- intangible - other 74 (74) -
- tangible 30 (26) 4
Debtors 3 - 3
Cash at bank and in hand 1 - 1
Accruals (13) - (13)
Deferred tax liability - (5,882) (5,882)
Net assets acquired 95 10,687 10,782
Satisfied by:
Shares issued 15,960
Expenses of acquisition 704
Total consideration 16,664
Goodwill arising on acquisition 5,882
As a result of the fair value exercise above, an in-process research
and development asset of £16,669,000 was recorded as at the date of
acquisition. A deferred tax liability of £5,882,000 was recorded,
since the tax base of the intangible asset was different to its
carrying value. The deferred tax liability is calculated based on the
fair value of the Intellectual Property at the US tax rate of 40.44%,
and is stated net of the tax effect of the brought forward tax losses
of Aptamera, Inc. of £2,123,000.
On 30 June 2005 the value of the Intellectual Property was translated
at the year-end dollar exchange rate and this led to an increase in
the value of the asset by £730,000. This retranslation also led to an
increase in the deferred tax liability and the goodwill figure by
£295,000 taking the overall deferred tax liability and goodwill
figure to £6,177,000.
(h) Cash, cash equivalents and short-term deposits
Under UK GAAP the Group analysed its financial assets between "cash
at bank and in hand", (which consisted of amounts repayable on demand
i.e. with a period of notice of no more than 24 hours), and
"short-term deposits", (which consisted of amounts which matured
after 24 hours). Under IFRS the Group analyses its financial assets
between "cash and cash equivalents", which includes all cash deposits
with an original maturity under three months, and "short-term
deposits", which includes deposits with longer maturities. The
difference in classification between UK GAAP and IFRS has led to the
re-classification of certain balances from "short-term deposits" into
"cash and cash equivalents".
Independent review report to Antisoma plc
Introduction
We have been instructed by the Company to review the financial
information which comprises the consolidated income statement, the
statement of recognised income and expense, the consolidated balance
sheet, the consolidated cash flow statement and the related notes. We
have read the other information contained in the interim report and
considered whether it contains any apparent misstatements or material
inconsistencies with the financial information.
Directors' responsibilities
The interim report, including the financial information contained
therein, is the responsibility of, and has been approved by the
Directors. The Directors are responsible for preparing the interim
report in accordance with the Listing Rules of the Financial Services
Authority. As disclosed in note 1 to the interim results, the next
annual financial statements of the group will be prepared in
accordance with accounting standards adopted for use in the European
Union. This interim report has been prepared in accordance with the
basis set out in note 1. The accounting policies are consistent with
those that the Directors intend to use in the next annual financial
statements. As explained in note 1, there is, however, a possibility
that the Directors may determine that some changes are necessary when
preparing the full annual financial statements for the first time in
accordance with accounting standards adopted for use in the European
Union. The IFRS standards and IFRIC interpretations that will be
applicable and adopted for use in the European Union at 30 June 2006
are not known with certainty at the time of preparing this interim
financial information.
Review work performed
We conducted our review in accordance with guidance contained in
Bulletin 1999/4 issued by the Auditing Practices Board for use in the
United Kingdom. A review consists principally of making enquiries of
management and applying analytical procedures to the financial
information and underlying financial data and, based thereon,
assessing whether the disclosed accounting policies have been
applied. A review excludes audit procedures such as tests of controls
and verification of assets, liabilities and transactions. It is
substantially less in scope than an audit and therefore provides a
lower level of assurance. Accordingly we do not express an audit
opinion on the financial information. This report, including the
conclusion, has been prepared for and only for the company for the
purpose of the Listing Rules of the Financial Services Authority and
for no other purpose. We do not, in producing this report, accept or
assume responsibility for any other purpose or to any other person to
whom this report is shown or into whose hands it may come save where
expressly agreed by our prior consent in writing.
Review conclusion
On the basis of our review we are not aware of any material
modifications that should be made to the financial information as
presented for the six months ended 31 December 2005.
PricewaterhouseCoopers LLP
Chartered Accountants
West London
20 February 2006
Notes:
a. The maintenance and integrity of the Antisoma plc website is the
responsibility of the Directors; the work carried out by the auditors
does not involve consideration of these matters and, accordingly, the
auditors accept no responsibility for any changes that may have
occurred to the interim report since it was initially presented on
the website.
b. Legislation in the United Kingdom governing the preparation and
dissemination of financial information may differ from legislation in
other jurisdictions.
Copyright © Hugin ASA 2006. All rights reserved.
Distributed by Market Wire
Copyright © 2012, MarketWire
Copyright © 2012, NewsBlaze,
Daily News
Search News
Daily News
