Final Results
(Thomson Reuters ONE) - Summit Corporation plc("Summit" or "the Company")PRELIMINARY RESULTS FOR THE YEAR ENDED 31 JANUARY 2009Oxford, UK, 28 July 2008 - Summit Corporation plc (AIM: SUMM), a UKdrug discovery company, today reports its preliminary results for theyear ended 31 January 2009.HighlightsCommercialEstablishment of Partnered Product Portfolio* Worldwide licensing agreements with success based milestones and royalties signed with BioMarin for Duchenne muscular dystrophy programme (July 2008) and Evolva for iminosugar programme in bioterrorism (January 2009)* Co-development agreements signed with Orient Pharma for sialorrhoea programme (Sept 2008) and the Lilly TB Drug Discovery Initiative for tuberculosis programme (Oct 2008)* No further costs to SummitPost period* Three cross-license agreements signed with Orient Pharma for Acne (SMT D002), glaucoma (SMT D003) and AMD (SMT D004) programmes (May 2009)ScientificAdvances in iminosugar drug discovery platform:* Encouraging data generated in therapeutic focus areas of metabolic diseases (diabetes) and anti-infectives (hepatitis C)* Expansion of compound collection with increased protection following patent filings* Evolva deal followed positive in vivo data against bioterrorism pathogensFinancial* $7m equity investment by BioMarin as part of DMD licensing agreement* Cash position of £2.7m at 31 January 2009 (31 January 2008: £10.0m)* Net loss of £22.4m for the year ended 31 January 2009 (2008: £10.1m) inclusive of non-cash impairment provision of £12.5m (2007/08: nil)Post periodContinued refocus on exciting iminosugar platform and instigated plantowards securing long-term future:* Additional working capital raised through renegotiation and divestment of non-core business operations* Operational cash-burn halved through on-going extensive restructuring programme* Additional activities on-going to extend cash life beyond Autumn 2009Steven Lee, PhD, Chief Executive Officer of Summit, commented on theresults: "It has been a challenging period for the business and oneof mixed fortunes. Whilst there have been major advances in thedevelopment of our iminosugar drug discovery platform, and all ourother programmes were successfully progressed through to commercialdeals, we suffered a fall in services revenue and were unsuccessfulin an equity financing."Strategically, the Board recognised the considerable near-termpotential opportunity in iminosugars and within the period instigateda restructuring programme to focus in this area. This process wasaccelerated post-period due to financial difficulties, and continuesto deliver tangible support as part of our efforts towards securingour long-term future. Summit is now emerging with a valuable productportfolio, and an innovative and validated technology platform thatis ready to deliver value for our shareholders." -- ENDS --For more information, please contact:Summit plcSteven Lee, PhDRichard Pye, PhDTel: +44 (0)1235 443951Panmure GordonAndrew Burnett / Rakesh Sharma (Corporate Finance)Ashton Clanfield (Corporate Broking)Tel: +44 (0)207 459 3600About SummitSummit is a UK based drug discovery company with a major focus ondeveloping new therapeutics from its iminosugar drug discoveryplatform.Summit believes iminosugars are the key to gaining access to severaldisease mechanisms where classical drugs have had little success, andthus offer a major opportunity for the discovery and development ofnew medicines.Carbohydrates (sugars) play critical roles in maintaining correctfunctioning of many normal processes in healthy individuals anderrors in carbohydrate recognition or modification can lead tomalfunction in cells resulting in disease. Iminosugars have thepotential to mimic carbohydrates or to interact with processes whichmanipulate carbohydrates to modify activity or to correct aberrantfunction. Additionally, the structural features of iminosugars allowthem to have, have important effects when interacting with many otherunexploited therapeutic targets.Commercially, Summit has a track record of signing programmeagreements and currently has an out-licensed product portfoliocomprising of seven drug programmes with BioMarin, Orient Europharma,Evolva and the Lilly TB Drug Discovery Initiative. In the futurethese programmes may generate success based milestone payments androyalties for Summit.In addition, Summit owns Dextra Laboratories a standalone businessunit that offers specialist carbohydrate chemistry services to thirdparties on a fee-for-service or collaborative basis.The company listed on the alternative investment market (AIM) of theLondon Stock Exchange in October 2004 - symbol: SUMM. Furtherinformation about the company is available at www.summitplc.com.IntroductionSummit remains committed to delivering value to shareholders throughthe development and commercialisation of early-stage drug discoveryprogrammes. Over the period under review, your Company has madeprogress in delivering this strategy having signed a total of sevenprogramme deals, including the Company's first major out-licensingagreement.However in common with many other businesses in the current economicclimate Summit experienced financial difficulties during the period,which culminated in an attempted fundraising that was unable to reachthe minimum threshold to proceed, as announced to shareholders inFebruary 2009. The financial difficulties have been reflected in theCompany's share price performance during the period and as a Board,we share the concerns and frustration that this will have causedshareholders. As a consequence, a number of steps were taken,including implementation of an extensive restructuring programme, asthe business works towards securing its longer-term financialfuture.We remain confident about the underlying potential within thebusiness. With our focus on developing new therapies in major areasof unmet medical need from our iminosugar drug discovery platformand, notwithstanding the current financial difficulties, we believethat this potential can be realised to create a sustainable businessfor the benefit of shareholders.StrategyTargeting early stage programme dealsSummit's strategy is to focus on the development of its drugprogrammes up to a late preclinical or early clinical stage and thento seek partners to undertake the more expensive registration studiesand product commercialisation. The point at which individualprogrammes will be out-licensed will seek to balance the specificneeds of the programme with extracting maximum value for the benefitof the business and shareholders,Since July 2008, Summit has entered into seven programme agreementsthat encompass a broad range of therapeutic areas. These programmeswere either the original assets that the business had been developingsince formation or ones that were acquired through M&A activity. Asoutlined later, Summit's focus is on developing iminosugar basedtherapeutics, it is expected that future programme agreements willoriginate from this innovative technology platform.Our strategy has consistently recognised a developing trend over thelast decade within the pharmaceutical industry of licensing dealsbeing signed at increasingly early stages of development. Indeed,Ernst & Young's 2009 global biotechnology report, Beyond Borders,stated that in 2008, 11 of the 15 largest European deals involveddiscovery programmes or assets in preclinical development and furthersupported our confidence in our strategy of commercialisingprogrammes at an early-stage.Re-focusing and Restructuring of the BusinessOver the period, and as part of the Board's continual review of ourR&D programmes, it was decided that the iminosugar drug discoveryplatform represented the best opportunity for the business to createsignificant future value and to date the Group has refocused itsefforts to concentrate on the development of this innovativeplatform. As a result, and in view of the prevailing financialenvironment, it was also decided that a controlled restructuringprogramme within the business would occur, including the potentialdisposal of non-core assets at an appropriate time to extract bestvalue and control costs.During the period, Summit attempted to secure additional finance toprovide additional working capital to support the development of theiminosugar platform. This fundraising coincided with a period ofsignificant uncertainty in global financial markets, a key factorthat contributed towards falling short of reaching our fundraisingtarget. Shareholders were updated on these events in February 2009and the news resulted in a sharp fall in the share price.As a consequence, the Board stepped up activities around itsrestructuring programme as part of our efforts to secure thefinancial future of the Company. In summary, this programme hasthree objectives: To raise additional working capital; reduce futureexpenditure; and accelerate activities within the business to focuson the development and commercialisation of the iminosugar drugdiscovery platform. Progress has been made in all three areas.To date, the restructuring programme has involved the renegotiationof the existing licensing agreements and disposal of non-core assetsto raise short-term working capital and reduce research anddevelopment costs of the business. The disposal of the zebrafishservices business resulted in an impairment provision for the periodbeing recognised. In addition, the leases for the Cambridge andWales facilities were terminated, while more favourable terms of rentfor some of the remaining leases were negotiated. Headcount numberswere also reduced by 50%, a necessary action towards safeguarding thefuture of the business, and on behalf of the Board we thank the staffaffected for the hard work and efforts during their time with thebusiness. In addition the Board, which had already reduced in sizeduring the period, agreed, after the year end, to cut totalremuneration costs by 35%.Collectively, these activities have more than halved the operationalcash-burn of the business, a figure that is expected to fall furtherduring 2009 as the restructuring programme continues.IminosugarsSummit's focus for creating future value is our proprietaryiminosugar drug discovery platform. It is our belief that thisinnovative technology platform provides a major opportunity for thediscovery of new medicines and has application in a number of majortherapeutic areas with major unmet medical needs. Iminosugars nowrepresent our sole area of investment with our internal research anddevelopment currently concentrated in the therapy areas of metabolicdiseases and anti-infectives, both of which represent multi-billiondollar markets.The decision to focus on iminosugars occurred during the last 18months as the Board recognised the assets and activities around theplatform represented the best immediate opportunity for creating asustainable business that will generate future value for ourshareholders. The Company was founded with two technology platformsin carbohydrate chemistry and zebrafish biology respectively. It wasfrom within the carbohydrate platform that the diversity and broadapplication of iminosugars, small molecules that mimic carbohydrates,has emerged. Over the last three years, the iminosugar platform hasevolved under the guidance of our Chief Scientific Officer, DrRichard Storer. The substantial level of investment that has alreadybeen made into the development of this technology means that theplatform is now approaching a stage where we believe it can begin togenerate significant value through commercial agreements withpartners in the pharmaceutical and life sciences industries.This belief was supported by the signing of the first iminosugarprogramme licensing agreement with Evolva Biotech in January 2009.The details of the agreement will be discussed later, but its signingprovided important validation of the potential of the platform. Ourtarget over the coming months is to generate significant value fromthis platform through the signing of new licensing agreements withinour focus areas of metabolic diseases and anti-infectives.Importantly, we are already generating encouraging data from theprogrammes in these areas and we hope to be able to report on theircontinued progress over the coming months. In addition, we will seekcollaborations in the many other disease areas where iminosugars areexpected to find utility.Product PortfolioDuring the period, Summit entered into a number of programmeagreements, including the Company's first major licensing agreement,with partners in the pharmaceutical industry. The establishment ofthese commercial agreements fulfilled a key objective for thebusiness and the progress made exceeded our targets set at the startof the period with seven agreements being signed. Together, theseagreements now form our Product Portfolio that could generate futurevalue from contractual success based milestone and royalty paymentsbut requires no further investment by Summit.Licensing of SMT C1100 for Duchenne muscular dystrophy to BioMarinIn July 2008, Summit entered into an exclusive worldwide licensingagreement with the US biotechnology company BioMarin PharmaceuticalsInc. for our preclinical candidate SMT C1100. This candidate isunder development to treat Duchenne muscular dystrophy (DMD), a fatalgenetic disease for which there is currently no cure.On signature, BioMarin made a $7 million equity investment in Summitat a 25% premium to the share price at that time. The totaldevelopment and commercialisation milestones payable by BioMarinamounted to $136 million, in addition to which Summit would receivetiered royalties on sales that rise to a low teen percentage.In March 2009, this license agreement with BioMarin was renegotiatedas part of Summit's restructuring programme. Under the terms of therestructured deal, BioMarin acquired full ownership of the DMDprogramme, including the preclinical candidate SMT C1100. Inparticular, BioMarin assumed all future preclinical and nonclinicaldevelopment costs for SMT C1100 that were to be borne by Summit underthe original licensing agreement. This was in exchange for aclinical development milestone of $1 million that was anticipated tobe payable in 2010. The changes to the agreement provided Summitwith a short term cash advantage, although the overall effect on theCompany's financial position is broadly neutral.Summit now remains eligible to receive success-based development andregulatory milestones of up to $50 million plus sales milestones of$85 million and tiered royalty payments rising to a low-teenpercentage.Agreement with Orient Pharma for SMT D001 for sialorrhoeaThe sialorrhoea programme was also subject of two separate agreementsduring the period under review. As with the DMD programme, thesecond agreement formed part of the Company's post-periodrestructuring activities.In September 2008, Summit entered into a co-development agreementwith Taiwan based Orient Pharma (Orient). Under the terms of thisagreement, Orient gained commercial rights over SMT D001 inAsia-Pacific and Australasia and were responsible for future clinicaldevelopment, manufacturing and distribution costs of SMT D001 inthese territories. Summit retained commercial rights in the world'smajor territories including North America and Europe and would haveaccess to all clinical data generated by Orient.This agreement was superseded in May 2009 with the signing of a newagreement that saw Orient take full ownership of the programme. Theterms of this agreement involved Orient making an equity investmentin Summit shares of $500,000 as a price of 13.5 pence, which wasapproximately 2.5 times the share price at that time. In addition,Summit is eligible to receive undisclosed royalties on worldwidesales of the product.Co-development agreement with Lilly TB Drug Discovery InitiativeIn October 2008, Summit entered into a co-development agreement withthe Lilly TB Drug Discovery Initiative, (the Initiative), apublic-private partnership created by the pharmaceutical company EliLilly to fund the discovery and development of new tuberculosis (TB)drugs. Summit provided to the Initiative novel compounds that haveshown in vitro cell-killing activity against Mycobacteriumtuberculosis, the bacteria that causes TB. The Initiative isresponsible for all future R&D costs worldwide and has commercialrights to the compounds in the developing world for the treatment ofrespiratory diseases. Summit has exclusive access to the datagenerated and retains commercial rights to these compounds in allindications for the developed world.Licensing of SMT 14400 for bioterrorism to EvolvaIn January 2009, Summit entered into an exclusive worldwide licensewith Evolva Biotech for SMT 14400, and it preferred isomer SMT 15000,two iminosugars being developed as a potential treatment forinfectious diseases associated with bioterrorism.Under the terms of the agreement, Summit received an undisclosedpayment on signature and will receive additional payments throughoutpreclinical development, a milestone payment at filing of an IND andfurther future success based development and regulatory milestonepayments. Evolva is responsible for all development costs. Onsuccessful commercialisation, Summit is eligible to receive tieredroyalties, rising to a low-teen percentage, and sales relatedmilestone payments.SMT 14400 originated from our iminosugar drug discovery platform andthe licensing agreement provides validation of the potential of oursecond generation iminosugars. The compound is an immunomodulator, acompound that works by selectively boosting aspects of the humanimmune system. The deal followed evaluation of the compound byEvolva in in vivo preclinical studies that has shown it to be activeagainst viral and bacterial pathogens, and is well tolerated. Evolvahas a strong capability in this area and has attracted significantfunding from the Defense Threat Reduction Agency (DTRA), a US-federalbody developing technologies to counter the threat of biologicalagents.Co-development agreement with Orient Pharma for acne (SMT D002),glaucoma (SMT D003) and AMD (SMT D004) programmesThe final three agreements were in May 2009 with Orient and coverSummit's clinical and preclinical programmes in acne (SMT D002),glaucoma (SMT D003) and wet age-related macular degeneration (AMD)(SMT D004). The agreements provide Orient with exclusive developmentand commercialisation rights in Asia-Pacific and Australasia and theywill be responsible for all development, manufacturing anddistribution costs associated with the products within itsterritories. Summit retains valuable rights to the products in NorthAmerica, Europe and the rest of the world and has rights to accessdata generated by Orient. Our intention is to use these data, whichwill include clinical trial results, to secure future commercialagreements within our territories.Financial ReviewA critical feature of the period under review was not being able tosecure additional equity funding, which has led to increasedactivities around our restructuring programme. This programme todate has resulted in a number of one-off charges and impairments asthe Company works towards reconstructing its finances.Prior to the restructuring activities, the fee-for-service operationshad a difficult trading period as a consequence of the difficulteconomic climate with revenues lower at £1.8 million (2007/08: £3.0million). Following our financial year end, Summit sold itszebrafish services division in May 2009 to Evotec AG for theconsideration of £500,000 cash to leave only one services business,Dextra Laboratories. With our focus on the development of theiminosugar drug discovery platform, this standalone business nowrepresents a potential future divestment opportunity, which the Boardis actively marketing.In the Balance Sheet, an impairment provision of £12.5 million(2007/08: nil) was recognised during the period. The sale of thezebrafish business was the principal reason for this impairment thatresulted in a £8.4 million goodwill provision. In addition, a £1.4million goodwill provision for Dextra Laboratories was recognisedfollowing a review of the fair value of the assets by the managementwhile a £2.6 million intangible assets provision was recognised.Research and development investment was lower at £5.8 million(2007/08: £7.7 million) and reflected the reduced levels of researchactivity outside of iminosugars but this figure was off-set by thedrop in revenue and grant income. Excluding impairments, theoperating loss for the period was £11.8 million (2007/08: 11.7million).A research and development tax credit of £750,000 (2007/08: £720,000)was recognised during the 12 months under review and the Companyexpect's to receive this credit in the second half of 2009.The cash outflow for the 12 months to 31 January 2009 was £7.3million and compared to a cash outflow of £8.2 million over theprevious 12 month period. The Company received £3.9 million in theperiod from the issue of new shares, of which £3.5 million was inrespect of shares issued to BioMarin. At 31 January 2009, the Grouphad cash reserves of £2.7 million (2007/08: £10.0 million)Working CapitalAs already discussed, the business increased activities in itsrestructuring programme after the financial year end as part of theefforts towards securing the future of the business. This programmehas already extended the cash life of the business into the Autumn of2009 and significantly reduced the operating cash-burn of the Group.The Group will, however, need to raise additional sources of financeto secure the longer-term future of the Group. The Board andmanagement are actively marketing the diabetes and hepatitis Ciminosugar programmes as out-licensing opportunities and the Dextrabusiness unit for sale. They are also in discussion with the Group'sfinancial advisers regarding sources of additional capital and otherstrategic transactions. The timing and amount of any funds that maybe realised through asset disposals or a new fund-raise, however,represent a material uncertainty. The Board are confident that itsplans will allow the Group to continue its operations for theforeseeable future. Based on this assessment, the Board haveprepared these statements on a going concern basis.Proposed Capital ReorganisationThe Company is also proposing to shareholders a capitalreorganisation. The closing mid market price of an Ordinary share inSummit on 24 July 2009 was 5.0 pence meaning Summit's share price isbelow the nominal value of an Ordinary share of 10p. The effect ofthis is to restrict the ability of the business to raise furtherequity finance, since in order for the Company to comply with theregulations, any further shares would have to be used at price at orabove the nominal value. In order to assist the Company with itson-going and future activities, the Board will proposes areorganisation of the share capital that will involve each issuedordinary share of 10 pence currently held being replaced with onehaving a nominal value of 1 pence. The proposal will be put toshareholders at this year's Annual General Meeting (AGM) with fulldetails of the reorganisation being set out in the Notice of AGM.Board ChangesThe Board underwent a number of changes during the period thatincluded the departure of Darren Millington as Chief FinancialOfficer and Colin Wall as a Non-executive Director. On behalf of theBoard, we would like to thank Darren and Colin for their effortsduring the time with the Company. Anthony Weir was appointed ChiefFinancial Officer in November 2008 and subsequently left the Companyin March 2009 by mutual consent. As already mentioned, total Boardremuneration fell by 35% since the end of the period under review.SummaryThe past 18 months has been a period of mixed fortunes; good progresswas made in developing and commercialising our internal drugdiscovery programmes but the progress made within this side of thebusiness was accompanied by considerable efforts towardsrestructuring the business to overcome its current financialdifficulties.The Company continues to take necessary and decisive action and ismaking good progress towards securing the long term financial futureof the business. We remain confident that these immediate financialissues can be resolved and believe, through our iminosugar drugdiscovery platform and Product Portfolio, that the business is wellequipped to generate value in the future for our shareholders.We would like to thank shareholders for their continuing support andwe will provide updates on the progress being made within thebusiness over the coming months. Finally, we would like to thank allour staff who have endured a difficult few months for their continueddedication and loyalty as we all strive towards achieving ourambition of developing Summit into a successful and sustainablebusiness.Barry Price, PhD Steven Lee, PhDChairman Chief Executive Officer27 July 2009Consolidated Income StatementFor the year ended 31 January 2009 Year ended Year ended 31 January 2009 31 January 2008 (Restated) £000s £000sRevenue 1,831 3,030Cost of sales (1,058) (1,264)Gross profit 773 1,766Other operating income 315 1,079Administrative expenses Research and development (5,754) (7,712) General and administration (4,031) (3,676) Sales and marketing (1,079) (1,091) Depreciation and amortisation (1,894) (1,650) Impairment (12,464) - Share based payment (212) (486)Total administrative expenses (25,434) (14,615)Operating loss (24,346) (11,770)Finance income 304 775Finance cost (85) (38)Loss before taxation (24,127) (11,033)Taxation 1,724 911Loss for the year attributable toequity shareholders of the parent (22,403) (10,122)Basic and diluted loss per ordinaryshare 41.96p 21.13pConsolidated balance sheetFor the year ended 31 January 2009 31 January 2009 31 January 2008 (Restated) £000s £000sASSETSNon-current assetsGoodwill - 9,767Intangible assets 4,820 8,131Property, plant and equipment 3,714 4,268 8,534 22,166Current assetsInventories 391 337Trade and other receivables 1,495 1,581Current tax 805 719Cash and cash equivalents 2,717 10,088 5,408 12,725Total assets 13,942 34,891LIABILITIESCurrent liabilitiesTrade and other payables (1,732) (3,129)Borrowings (135) (188)Total current liabilities (1,867) (3,317)Non-current liabilitiesDeferred income (141) (97)Provisions (1,180) (1,180)Borrowings (1,181) (1,222)Deferred tax (1,020) (1,879)Total non-current liabilities (3,522) (4,378)Total liabilities (5,389) (7,695)Net assets 8,553 27,196EQUITYShare capital 5,597 4,967Share premium account 25,785 22,750Shares to be issued - 1,443Share based payment reserve 1,176 964Merger reserve 12,654 11,328Retained earnings (36,659) (14,256)Total equity attributable to theequity shareholders of the Parent 8,553 27,196Consolidated cash flow statementFor the year ended 31 January 2009 Year ended Year ended 31 January 31 January 2009 2008 £000s £000sCash flows from operating activitiesLoss before tax (24,127) (11,033)Adjusted for:Finance income (304) (775)Finance cost 85 38Foreign exchange loss 2 -Depreciation 1,182 766Amortisation of intangible fixed assets 718 884Loss on disposal 198 -Impairment loss 12,464 -Share based payment 212 486Adjusted loss from operations before changes (9,570) (9,634)in working capital and provisions(Increase)/decrease in trade and otherreceivables 86 (189)(Increase) in inventories (54) (79)Increase/(decrease) in trade and otherpayables (1,489) 1,376Cash used by operations (11,027) (8,526)Taxation Received 898 454Net cash used in operating activities (10,129) (8,072)Investing activitiesAcquisition of businesses net of cashacquired - 406Purchase of property, plant and equipment (997) (1,846)Purchase of intangible assets (150) (97)Interest received 304 775Net cash used in investing activities (843) (762)Financing activitiesProceeds from issue of share capital 3,900 142Proceeds from receipt of loan - 600Repayment of debt during the period (204) (71)Repayment of finance lease costs (10)Interest paid (85) (38)Net cash generated from financing activities 3,601 633Net (decrease)/increase in cash and cashequivalents (7,371) (8,201)Cash and cash equivalents at beginning ofperiod 10,088 18,289Cash and cash equivalents at end of year 2,717 10,088Notes to the financial statements for the year ended 31 January 20091. Basis of accountingThe financial information for the year ended 31 January 2009 isprepared in accordance with the recognition and measurementrequirements of International Financial Reporting Standards (IFRSs)as endorsed by the European Union and implemented in the UK.The financial information set out above is derived from but does notconstitute the Company's statutory accounts for the years ended 31January 2009 or 2008. Statutory accounts for 2008 have been deliveredto the Registrar of Companies. The statutory accounts for 2009 willbe delivered to the Registrar of Companies following the Company'sAnnual General Meeting. The auditors have reported on the 2009 and2008 accounts; their reports were unqualified and did not contain astatement under section 237(2) or (3) of the Companies Act 1985. Dueto the ongoing financial uncertainty for the Company, as discussedbelow, the auditors have included an emphasis of matter paragraphregarding the adequacy of the Company's disclosure in this respect intheir report.The financial information in these financial statements has beenprepared on a going concern basis which assumes that the Group willcontinue in operational existence for the foreseeable future. TheDirectors have reviewed the working capital requirements of the Groupover the next 12 months and have identified a number of steps thatneed to be taken to manage the cash position to ensure it cancontinue in operation for the foreseeable future. These actionsinclude managing and reducing research and overhead costs and raisingfinance from other sources. The Directors have identified a number ofareas where costs may be reduced including the restriction of R&Dprojects to core projects, premises lease costs, staff costs andDirectors' fees. The Group has provided confidential information onits preclinical diabetes and Hepatitis C programmes to a number ofprospective major pharmaceutical and biotech partners that haveexpressed interest with a view to the negotiation and completion ofan out-licence deal. We are discussing fund-raising options with ourfinancial advisors and we are also in a process that may lead to thesale of one of the Group's wholly owned subsidiaries, DextraLaboratories Limited. The Group's future as an independent entitywill depend upon managements' ability to complete at least one of theabove fund-raising options in the Autumn of 2009 with a likelihood ofneeding to complete a second in Spring 2010. The Directors areconfident that this can be achieved. The timing and extent of suchtransactions required to remain as a going concern however representa material uncertainty and therefore the Group may be unable torealise it's assets and discharge it's liabilities in the normalcourse of business. No adjustments have been provided in theseaccounts to reflect any loss in the value of assets or increase inliabilities that would arise should the Group be unable to continueas a going concern.2. ImpairmentsAs required by the relevant IFRS's, the Group carried out a review ofthe carrying value of its main assets that resulted in a non-cashimpairment provision of £12,464k being recognised. Following thetransfer of the trade and assets from Summit (Cambridge) Limited toSummit (Oxford) Limited during the year, and in light of thesubsequent sale of the zebrafish business in May 2009, a goodwillprovision of £8,389k was recognised. In addition, a £1,378k goodwillprovision associated with Dextra Laboratories Limited was recognisedwith the Management having assessed the fair value of DextraLaboratories net assets as an individual entity on both a value inuse and a fair value less costs to sell basis, and have concluded onthe latest available evidence that the recognition of an impairmentprovision against the goodwill is required. An intangible assetsprovision of £2,597k was also recognised in respect of thesialorrhoea and seborrhoea programmes following the licensing dealsthat were signed which affected both of them.3. Shareholders' funds and statement in changes in shareholders'equityFor the year ended 31 January 2009 Share Share Shares based Share premium to be payment Merger Retained capital account issued reserve reserve earnings TotalGroup £000s £000s £000s £000s £000s £000s £000sAt 1February2008 4,967 22,750 1,443 964 11,328 (14,256) 27,196Loss forthe year - - - - - (22,403) (22,403)Totalrecognisedincome andexpense forthe year - - - - - (22,403) (22,403)New sharecapitalissued 630 3,035 (117) - - - 3,548Share basedpayment - - - 212 - - 212Share issueeligiblefor mergerrelief - - (1,326) - 1,326 - -At 31January2009 5,597 25,785 - 1,176 12,654 (36,659) 8,553For the year ended 31 January 2008 Share Share Shares based Share premium to be payment Merger Retained capital account issued reserve reserve earnings TotalGroup £000s £000s £000 £000s £000s £000s £000sAt 1February2007 3,722 22,327 - 478 (1,943) (4,134) 20,450Loss forthe year - - - - - (10,122) (10,122)Totalrecognisedincome andexpense forthe year (10,122) (10,122)New sharecapitalissued 1,245 423 - - - - 1,668Share basedpayment - - - 486 - - 486New sharesto beissued 1,443 1,443MergerRelief - 13,271 13,271At 31January2008 4,967 22,750 1,443 964 11,328 (14,256) 27,1964. Restated comparativesFollowing a review of operations it was agreed that overhead costswithin general and administration would not be allocated to cost ofsales and that depreciation would not be allocated to research anddevelopment expenditure. The prior year amounts have been adjusted asfollows; cost of sales has been reduced by £359,000, research anddevelopment by £695,000 with a corresponding credit to general andadministration of £1,054,000. An adjustment has also been made tocorrectly reflect the split between current and non- currentliabilities for the deferred income resulting from the contributionsmade from a landlord of one of the premises occupied towardsrefurbishment costs. This adjustment resulted in an increase tonon-current liabilities of £97,000 and a subsequent decrease tocurrent liabilities of the same amount.5. Annual General MeetingThe Annual General Meeting is due to be held at 10.00am on 20 August2009 at the Company's registered office, 91 Milton Park, Abingdon,Oxfordshire, OX14 4RY.---END OF MESSAGE---This announcement was originally distributed by Hugin. The issuer is solely responsible for the content of this announcement.
Datum: 28.07.2009 - 08:00 Uhr
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