TIDMDNL
RNS Number : 8761Z
Diurnal Group PLC
20 March 2017
20 March 2017
Diurnal Group plc
("Diurnal" or the "Company")
Interim Results for the Six Months Ended 31 December 2016
On track to becoming a world leading specialty pharma company in
endocrinology
Diurnal Group plc (AIM: DNL), the specialty pharmaceutical
company targeting patient needs in chronic endocrine (hormonal)
diseases, announces its results for the six months ended 31
December 2016.
Operational highlights
-- Primary endpoint met in European Phase III Infacort(R)
registration trial in paediatric adrenal insufficiency ("AI")
-- Infacort(R) paediatric use marketing authorisation (PUMA) submitted to EMA
-- Significant progress in the European Phase III trial of
Chronocort(R) in congenital adrenal hyperplasia ("CAH"), with over
50% of patients enrolled
-- First patients dosed in European follow-on study of the Phase
III Infacort(R) registration trial in paediatric AI and the
European follow-on study of the Phase III Chronocort(R)
registration trial in adult CAH
-- Development of the Company's European commercial organisation
instigated through the appointment of Ashfield to support sales and
medical infrastructure and Sharp to bring expertise to Infacort(R)
supply chain
-- Initiation of Named Patient Access Programme for Infacort(R)
and Chronocort(R) with Clinigen, following the period end
-- First patient dosed with novel oral testosterone therapy in
study evaluating pharmacokinetics, safety and tolerability in male
patients with hypogonadism
-- Strengthened the Board with the appointment of Richard Bungay
as Chief Financial Officer, following the period end
Financial overview
-- Operating loss of GBP5.7m (H1 2015/16: GBP3.5m) reflecting
increased investment in clinical and development activities, build
out of commercial organisation and investment in overheads to
support the anticipated growth and development of the business
-- Held-to-maturity financial assets, cash and cash equivalents
at 31 December 2016 of GBP25.6m (31 Dec 2015: GBP33.1m)
-- Net cash used in operating activities was GBP4.5m (H1
2015/16: GBP2.0m), in line with the Board's expectations
-- Net assets of GBP20.6m (31 Dec 2015: GBP28.6m)
Martin Whitaker, PhD, Chief Executive Officer of Diurnal,
commented:
"During 2016, the Company continued to deliver on key milestones
as we progressed towards our ambition of becoming a world leading
specialty pharma company in endocrinology. The successful
completion of the registration study for Infacort(R) in Europe was
a key inflection point for the Company during the year. We have now
begun to build out of our European commercial organisation that
will allow us to market Infacort(R) , our first product, directly
to specialist prescribers in major European markets following its
anticipated market authorisation towards the end of 2017. We
believe that this infrastructure will also make Diurnal an
attractive licensing partner for third parties focused in the
endocrinology space who do not have European commercial operations.
In the US, we continued to progress Infacort(R) and Chronocort(R)
and expect to commence pivotal clinical programmes in the second
half of 2017."
In the Interim Results:
-- "H1" refers to the six-month period ended 31 December
-- "m" and "k" represent million and thousand respectively
-- "Group" is the Company and its subsidiary undertaking, Diurnal Limited
Date of preparation 17th March 2017 Ref: CORP-EU-0005
For further information, please visit www.diurnal.co.uk
or contact:
+44 (0)20 3727
Diurnal Group plc 1000
Martin Whitaker, CEO
Richard Bungay, CFO
Numis Securities Ltd (Nominated +44 (0)20 7260
Adviser and Joint Broker) 1000
Nominated Adviser: Michael Meade,
Freddie Barnfield, Paul Gillam
Corporate Broking: James Black
Panmure Gordon (UK) Limited (Joint +44 (0) 20 7886
Broker) 2500
Corporate Finance: Freddy Crossley,
Duncan Monteith
Corporate Broking: Tom Salvesen
+44 (0)20 3727
FTI Consulting 1000
Simon Conway
Victoria Foster Mitchell
Notes to Editors
About Diurnal
Founded in 2004, Diurnal is a UK-based specialty pharma company
developing high quality products for the global market for the
life-long treatment of chronic endocrine conditions, including the
orphan diseases Congenital Adrenal Hyperplasia and Adrenal
Insufficiency. Its expertise and innovative research activities
focus on circadian-based endocrinology to yield novel product
candidates in the rare and chronic endocrine disease arena.
For further information about Diurnal, please visit
www.diurnal.co.uk
Forward looking statements
Certain information contained in this announcement, including
any information as to the Group's strategy, plans or future
financial or operating performance, constitutes "forward-looking
statements". These forward-looking statements may be identified by
the use of forward-looking terminology, including the terms
"believes", "estimates", "anticipates", "projects", "expects",
"intends", "aims", "plans", "predicts", "may", "will", "seeks"
"could" "targets" "assumes" "positioned" or "should" or, in each
case, their negative or other variations or comparable terminology,
or by discussions of strategy, plans, objectives, goals, future
events or intentions. These forward-looking statements include all
matters that are not historical facts. They appear in a number of
places throughout this announcement and include statements
regarding the intentions, beliefs or current expectations of the
Directors concerning, among other things, the Group's results of
operations, financial condition, prospects, growth, strategies and
the industries in which the Group operates. The directors of the
Company believe that the expectations reflected in these statements
are reasonable, but may be affected by a number of variables which
could cause actual results or trends to differ materially. Each
forward-looking statement speaks only as of the date of the
particular statement.
By their nature, forward-looking statements involve risks and
uncertainties because they relate to events and depend on
circumstances that may or may not occur in the future or are beyond
the Group's control. Forward-looking statements are not guarantees
of future performance. Even if the Group's actual results of
operations, financial condition and the development of the
industries in which the Group operates are consistent with the
forward-looking statements contained in this document, those
results or developments may not be indicative of results or
developments in subsequent periods.
Operational Review
The six-month period to 31 December 2016 (the "Period") has seen
the Company build on the momentum following its Initial Public
Offering ("IPO") in December 2015, through the continued delivery
of key milestones contributing towards its vision of becoming a
world leading specialty pharma company in endocrinology. The funds
raised at the IPO provide the Company with the financial strength
to complete the development of Infacort(R) in Europe and the US;
obtain market authorisation in Europe for Infacort(R) and generate
first revenues; complete the development of Chronocort(R) in Europe
and commence development in the US; and commence the construction
of Diurnal's commercial capability in Europe. Diurnal believes that
it has an opportunity to become one the few UK biotechnology
companies to successfully take a product from concept to
commercialisation.
Diurnal has continued to make significant clinical development
progress with its late-stage pipeline products during the Period.
Infacort(R) and Chronocort(R) are in late-stage clinical
development targeting indications of cortisol deficiency:
Infacort(R) has completed a Phase III clinical trial in Europe and
has been submitted for marketing authorisation and Chronocort(R) is
currently undergoing a Phase III clinical trial in Europe. Diurnal
anticipates its first market authorisation in Europe for
Infacort(R) towards the end of 2017, with the addressable market
potential of its late-stage product candidates, including further
indication extensions in cortisol deficiency, estimated by the
Company to be a multi-billion Dollar opportunity.
Significant Progress towards Commercialisation in Europe
Diurnal's lead programme, Infacort(R) , is designed to solve the
needs of paediatric patients with adrenal insufficiency ("AI") that
result from deficiency of the essential hormone cortisol, which the
Company believes are currently not met satisfactorily through
existing treatments. Diurnal expects that, if approved, Infacort(R)
will be the first product specifically designed and licensed for
children under six years of age suffering from the rare diseases
congenital adrenal hyperplasia ("CAH") and AI. Infacort(R) aims to
address the need for a product that is licensed, effective, safe
and easy to administer to infants, neonates and children under six
years of age. Diurnal submitted a paediatric use marketing
authorisation ("PUMA") application during the Period and currently
anticipates marketing authorisation approval for Infacort(R) in
Europe towards the end of 2017. A follow-on study, initiated during
the Period, will provide further valuable safety data to support
the registration and commercialisation of Infacort(R) .
Diurnal intends to commercialise Infacort(R) itself in Europe in
order to retain the full value of the product, reflecting a small,
focused prescribing base, and has made significant progress during
the Period in establishing its European commercial operations.
Diurnal's small, focused, in-house commercial team has been
supplemented through a service agreement with Ashfield Healthcare
("Ashfield") to support the Company in building sales and medical
infrastructure in major European territories. Ashfield is a
respected global contract sales organisation that will focus in the
next 12 months on establishing a Europe wide network of medical
liaison staff to prepare the Company for the anticipated launch of
Infacort(R) in 2018 under the direction of the Company's commercial
leadership. Diurnal has also signed an agreement with Sharp
Packaging Services ("Sharp"), a global leader in contract packaging
for the pharmaceutical and biotechnology industries, to ensure the
Infacort(R) supply chain is managed by an internationally
recognised expert business.
The Company believes that its European commercial organisation
will be a valuable asset that can not only ensure it retains the
full value of its in-house products in major European territories,
but also makes Diurnal an attractive partner for companies seeking
to commercialise endocrinology focused products in Europe. Diurnal
continues to assess such business development opportunities where
they are additive to its business model.
Continued Progress in Product Pipeline
Diurnal now expects its second product candidate, Chronocort(R)
, to achieve market authorisation in Europe in 2019 (previously
2018). Chronocort(R) provides a drug release profile that the
Company believes mimics the body's natural cortisol circadian
rhythm, which current therapy is unable to replicate, and is
designed to improve disease control for adults with CAH.
Recruitment in this study has been slower than originally
anticipated, due to the intensive nature of the clinical trial
setting; however, by the end of the Period, over 50% of patients
had been recruited and the Company expects to complete recruitment
in the second half of 2017 following the addition of further sites
to increase recruitment. A follow-on study, initiated during the
Period, is intended to provide further valuable safety data to
support the registration and commercialisation of Chronocort(R)
.
The Company continues to progress discussions with the US Food
and Drug Administration ("FDA") regarding the requirements for the
registration programme for Infacort(R) and Chronocort(R) in the US.
Clinical study design requirements for CAH differs between the US
and Europe, meaning that a separate clinical programme will be
required for registration of these two products in the US. Diurnal
expects to conclude regulatory discussions such that the
registration study package for both products can commence during
the second half of 2017.
Diurnal believes that its strategy of developing novel products
using well-characterised active ingredients to meet significant
unmet medical needs offers a lower risk than development of new
chemical or biological entities whilst enabling significant
in-market protection through both patent filings and regulatory
protection. For example, the active ingredient of both Infacort(R)
and Chronocort(R) , hydrocortisone, is extremely well-tolerated,
with an extensive safety database through over 50 years of clinical
use. Diurnal's product candidates are protected by an extensive
patent portfolio, benefitting from a number of granted or pending
patents in key jurisdictions, along with strong protection through
orphan drug designations. The FDA has granted Chronocort(R) orphan
drug designation in the treatment of both CAH and AI and has
granted Infacort(R) orphan drug designation in the treatment of
paediatric AI. Diurnal has applied for a PUMA for Infacort(R) in
Europe, whilst Chronocort(R) already benefits from the orphan drug
designations for CAH and AI in Europe. These orphan drug
designations mean Infacort(R) and Chronocort(R) have the potential
to be granted market and data exclusivity on approval.
Diurnal plans to use its cortisol replacement offering to build
a strong platform in underserved diseases of the adrenal gland and
then expand into endocrine disease areas such as those associated
with the thyroid, gonads and pituitary. Continued product
development is expected to come from Chronocort(R) line extensions
aiming to address additional cortisol deficiency indication(s) and
from the Company's earlier-stage pipeline of endocrinology product
candidates. These earlier-stage candidates currently include a
native oral testosterone for the treatment of male hypogonadism,
which entered a Phase I clinical study designed to evaluate
pharmacokinetics, safety and tolerability in male patients with
hypogonadism during the Period.
Board Strengthened
Shortly after the end of the Period, Diurnal strengthened its
Board with the appointment of Richard Bungay as Chief Financial
Officer ("CFO"). Richard has over 20 years' experience in corporate
roles within Research and Development ("R&D") based companies
within the biotechnology and pharmaceutical sector, including as
CFO of both public and private companies, with a particular focus
on financing, investor relations and business development and is
well placed to support the Company's ambitious growth plans.
Outlook
Infacort(R) is currently undergoing regulatory review in Europe
following submission of a PUMA and if approved has the potential to
be the first licensed treatment in Europe for AI (including CAH)
specifically designed for use in children under six years of age.
Diurnal anticipates market authorisation in late 2017. Subject to
completing discussions with FDA, the Company will be commencing the
US registration programme in the second half of 2017. Previous FDA
advice recommended two clinical studies, one is a food matrix
compatibility study in adult volunteers and the other is a study in
the target paediatric population (0 - 16 years of age).
Chronocort(R) commenced a Phase III clinical trial in Europe
during February 2016 and over 50% of patients had been recruited by
the end of the Period. Chronocort(R) has the potential to be the
first product candidate for adults with CAH to mimic the natural
cortisol circadian rhythm, therefore improving disease control. The
Company expects to report headline data from this trial during
2018. Diurnal continues to be in dialogue with the FDA on the Phase
III US clinical trial design and expect to have an update later in
the year, with the intention to commence registration study
activities around the end of the calendar year.
Following the end of the Period, the Company announced a
partnership with Clinigen Group plc's IDIS Managed Access ("IDIS")
division to launch a Patient Access programme in Europe for
Infacort(R) and Chronocort(R) to ensure that patients with cortisol
deficiency but no other treatment options can access these
medicines as efficiently as possible ahead of anticipated European
approval and commercial launch.
Diurnal is developing a native oral testosterone replacement
treatment for patients suffering from hypogonadism. The Company has
successfully completed in vivo pre-clinical studies of its novel
formulation and initiated a proof-of-concept study in human
hypogonadal patients during the Period. Diurnal now expect to
report headline data from this trial in early 2018 (previously
mid-2017).
Diurnal aims to become a world leading endocrinology specialty
pharmaceutical company targeting under-served patient needs in
chronic hormonal diseases. Diurnal has identified a number of such
needs within the field of endocrinology, which, combined, the
Company believes represent a multi-billion Dollar market
opportunity. The Company intends to address these market
opportunities through the development of its late-stage pipeline,
through development of its early-stage pipeline and, longer-term,
through in-licensing and acquisitions.
Diurnal's products are expected to be prescribed by
endocrinologists predominantly located in specialist centres.
Diurnal believes that the concentrated nature of these centres
provides a significant opportunity to build a cost-effective,
focused sales and marketing operation in Europe, which should
enable the Company to capture value from its products and create a
base for growth through pipeline development and in-licensing. The
environment for commercialisation of healthcare products in the US
remains challenging, in particular ensuring that market access is
optimised for a successful product launch. Accordingly, Diurnal is
likely to capitalise on the interest in its programmes and seek a
US partner for commercialisation of its initial pipeline products
at an appropriate time. Diurnal will also seek local distribution
arrangements for territories outside the US and Europe where there
is a significant market for the Company's products. Following the
end of the Period, Diurnal announced a distribution agreement with
Medison Pharma Limited ("Medison") for Israel. Medison is a leader
in the marketing of specialist-focused products in Israel and will
help Diurnal optimise the value of its products outside of its core
markets. Diurnal will assess opportunities for similar agreements,
addressing selected high-value markets.
Financial Review
Operating expenses
Operating expenses are in a growth phase, reflecting the
increased clinical and development activities together with
investment in headcount and business infrastructure to support the
transition of the business to a fully-integrated speciality pharma
organisation with product origination, development and
commercialisation capabilities. This continued investment in the
business will support its anticipated growth and development in the
coming periods.
Research and development expenditure for the Period was GBP4.0m
(H1 2015/16: GBP1.8m). Expenditure on product development and
clinical costs increased in the Period as the Group submitted the
Infacort(R) PUMA application to the European Medicines Agency
("EMA") and continued to progress Chronocort(R) in a Phase III
registration trial in Europe. The Group also recruited the first
patients from the Chronocort(R) Phase III trial into a long-term
follow-on study and commenced a Phase I study with its native oral
testosterone product in hypogonadal patients. Staff-related
expenditure also increased as a result of the appointment of new
staff and the full impact of the implementation of a new
remuneration policy in H2 2015.
Administrative expenses for the Period were GBP1.7m (H1 2015/16:
GBP1.7m). Underlying costs in the Period increased by GBP0.6m,
reflecting a substantial increase in pre-commercialisation
expenses, as the Group prepares for the anticipated launch of
Infacort(R) in 2018, along with the appointment of new staff and
the full impact of the implementation of a new remuneration policy
in the prior period. This increase was compensated by costs of
GBP0.6m in the prior period relating to fees paid in connection
with the Alternative Investment Market ("AIM") admission.
Operating loss
Operating loss for the period increased to GBP5.7m (H1 2015/16:
GBP3.5m), reflecting the increased operating expenses outlined
above.
Financial income and expense
Financial income in the period was GBP102k (H1 2015/16: GBP8k):
the funds received from the IPO fundraising and the convertible
loan arrived in late December 2015 and consequently had minimal
impact on financial income for the prior period. Financial expense
for the period was GBP134k (H1 2015/16: GBP6k), being mainly the
financial expense of the convertible loan. No interest is payable
in cash on this loan, the financial expense charged to the income
statement representing the effective interest to accrue the loan to
the redemption value at the loan's maturity date over the term of
the loan. The convertible loan had minimal impact on financial
expense in the prior period due to the timing of the receipt of the
funds.
Loss on ordinary activities before tax
Loss before tax for the period was GBP5.7m (H1 2015/16:
GBP3.5m).
Tax
The Group has not recognised any deferred tax assets in respect
of trading losses arising in the current financial period. At
present, the Group recognises tax assets in respect of claims under
the UK research and development Small or Medium-sized Enterprise
("SME") scheme upon receipt of the claim.
Earnings per share
Loss per share was 10.9 pence (H1 2015/16: 10.0 pence).
Cash flow
Net cash used in operating activities was GBP4.5m (H1 2015/16:
GBP2.0m), driven by the planned increase in investment in R&D
and business infrastructure during the Period. Net cash generated
by financing during the prior period of GBP29.1m reflects the net
proceeds of the issue of shares in the IPO and funds received from
issue of the convertible loan.
Balance sheet
Total assets decreased to GBP26.4m (31 Dec 2015: GBP33.5m),
primarily reflecting the operating cash outflows. Held-to-maturity
financial assets at 31 December 2016 were GBP14.0m (31 Dec 2015:
GBPnil) and cash and cash equivalents were GBP11.6m (31 Dec 2015:
GBP33.1m). Total liabilities increased to GBP5.8m (31 Dec 2014:
GBP4.9m), reflecting the GBP3.4m liability component of the
convertible loan (31 Dec 2015: GBP3.1m), together with trade and
other payables of GBP2.5m (31 Dec 2015: GBP1.8m), which increased
due to timing of payment of certain clinical trial and
manufacturing expenses. Net assets were GBP20.6m (31 Dec 2015:
GBP28.6m).
Principal risks and uncertainties
Diurnal considers strategic, operational and financial risks and
identifies actions to mitigate these risks. The principal risks and
uncertainties are set out in the Group's Annual Report and Accounts
for the year ended 30 June 2016, available on the website
www.diurnal.co.uk. There are no changes to these principal risks
since the issue of the Annual Report and Accounts, with the
exception of those in relation to the foreign currency risk, noted
below.
Following the vote in the UK to leave the European Union on 23
June 2016 ("Brexit"), Sterling has weakened significantly against
both the US Dollar and Euro, and is expected to remain volatile
whilst the UK negotiates the terms of its exit from the European
Union. The Group does not currently have material exposure to
either US Dollars or Euros. The Group continually reviews its
exposure to foreign currencies, and will put in place appropriate
hedging arrangements in order to provide greater certainty of
future cash flows in the event that its foreign currency exposure
becomes material.
Consolidated income statement
for the six months ended 31 December 2016
Unaudited Unaudited Audited
6 months 6 months 12 months
ended ended ended
31 Dec 31 Dec 30 Jun
2016 2015 2016
Note GBP000 GBP000 GBP000
Research and development
expenditure (3,955) (1,822) (3,886)
Administrative expenses (1,709) (1,705) (3,106)
Operating loss (5,664) (3,527) (6,992)
Financial income 102 8 63
Financial expense (134) (6) (133)
Loss before tax (5,696) (3,525) (7,062)
Taxation 6 - - 491
Loss for the period (5,696) (3,525) (6,571)
---------- ---------- ----------
Basic and diluted
loss per share (pence
per share) 5 (10.9) (10.0) (15.0)
---------- ---------- ----------
All activities relate to continuing operations.
The Notes form part of this condensed financial information.
Consolidated statement of comprehensive income
for the six months ended 31 December 2016
Unaudited Unaudited Audited
6 months 6 months 12 months
ended ended ended
31 Dec 31 Dec 30 Jun
2016 2015 2016
GBP000 GBP000 GBP000
Loss for the period (5,696) (3,525) (6,571)
---------- ---------- ----------
The Notes form part of this condensed financial information.
Consolidated balance sheet
as at 31 December 2016
Unaudited Unaudited Audited
As at As at As at
31 Dec 31 Dec 30 Jun
2016 2015 2016
Note GBP000 GBP000 GBP000
Non-current assets
Intangible assets 5 8 6
Property, plant and
equipment 2 4 3
7 12 9
---------- ---------- --------
Current assets
Trade and other receivables 753 387 530
Held-to-maturity
financial assets 14,000 - 14,000
Cash and cash equivalents 11,626 33,138 16,114
26,379 33,525 30,644
---------- ---------- --------
Total assets 26,386 33,537 30,653
---------- ---------- --------
Current liabilities
Trade and other payables (2,451) (1,784) (1,480)
(2,451) (1,784) (1,480)
---------- ---------- --------
Non-current liabilities
Loans and borrowings 7 (3,373) (3,111) (3,239)
(3,373) (3,111) (3,239)
---------- ---------- --------
Total liabilities (5,824) (4,895) (4,719)
---------- ---------- --------
Net assets 20,562 28,642 25,934
---------- ---------- --------
Equity
Share capital 2,610 2,610 2,610
Share premium 23,632 23,632 23,632
Consolidation reserve (2,943) (2,943) (2,943)
Other reserve 1,458 1,458 1,458
Retained (losses)
/ earnings (4,195) 3,885 1,177
Total equity 20,562 28,642 25,934
---------- ---------- --------
The Notes form part of this condensed financial information.
Consolidated statement of changes in equity
for the six months ended 31 December 2016
Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited
Retained
Share Share Consolidation Other (losses)
Capital Premium Reserve Reserve / Earnings Total
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
Balance at
30 June 2015 15,351 - (2,943) - (6,367) 6,041
Loss for the
period and
Total comprehensive
loss for the
period - - - - (3,525) (3,525)
---------- ---------- -------------- ---------- ------------ ----------
Equity settled
share based
payment transactions - - - - 152 152
Reduction
of Capital (12,107) - - - 12,107 -
Issue of shares
for cash 884 24,465 - - - 25,349
Costs charged
against share
premium - (833) - - - (833)
Equity component
of convertible
loan - - - 1,486 - 1,486
Issue expenses
of convertible
loan - - - (28) - (28)
Repurchase
of deferred
shares (1,518) - - - 1,518 -
Total transactions
with owners
recorded directly
in equity (12,741) 23,632 - 1,458 13,777 26,126
---------- ---------- -------------- ---------- ------------ ----------
Balance at
31 December
2015 2,610 23,632 (2,943) 1,458 3,885 28,642
Loss for the
period and
Total comprehensive
loss for the
period - - - - (3,046) (3,046)
---------- ---------- -------------- ---------- ------------ ----------
Equity settled
share based
payment transactions - - - - 338 338
Total transactions
with owners
recorded directly
in equity - - - - 338 338
---------- ---------- -------------- ---------- ------------ ----------
Balance at
30 June 2016 2,610 23,632 (2,943) 1,458 1,177 25,934
Loss for the
period and
Total comprehensive
loss for the
period - - - - (5,696) (5,696)
---------- ---------- -------------- ---------- ------------ ----------
Equity settled
share based
payment transactions - - - - 324 324
Total transactions
with owners
recorded directly
in equity - - - - 324 324
---------- ---------- -------------- ---------- ------------ ----------
Balance at
31 December
2016 2,610 23,632 (2,943) 1,458 (4,195) 20,562
---------- ---------- -------------- ---------- ------------ ----------
Loss for the period is the only constituent of Total
comprehensive loss for each period so the period amounts are shown
in the same line in the consolidated statement of changes in
equity.
Consolidated statement of cash flows
for the six months ended 31 December 2016
Unaudited Unaudited Audited
6 months 6 months 12 months
ended ended ended
31 Dec 31 Dec 30 Jun
2016 2015 2016
GBP000 GBP000 GBP000
Cash flows from operating
activities
Loss for the period (5,696) (3,525) (6,571)
Adjustments for:
Depreciation, amortisation
and impairment 2 3 6
Share-based payment 324 152 490
Financial income (102) (8) (63)
Finance expenses 134 6 133
Taxation - - (491)
Increase in trade and
other receivables (151) (11) (135)
Increase in trade and
other payables 970 1,385 1,081
Cash flow from operating
activities (4,519) (1,998) (5,550)
Interest paid - (1) -
Tax received - - 491
Net cash used in operating
activities (4,519) (1,999) (5,059)
---------- ---------- ----------
Cash flows from investing
activities
Additions of property,
plant and equipment - - -
Purchases of Held-to-maturity
financial assets - - (14,000)
Interest received 31 8 44
Net cash from / (used
in) investing activities 31 8 (13,956)
---------- ---------- ----------
Cash flows from financing
activities
Net proceeds from issue
of share capital - 24,516 24,516
Repayment of borrowings - (24) (24)
Net proceeds from issue
of borrowings - 4,564 4,564
Net cash generated by
financing activities - 29,056 29,056
---------- ---------- ----------
Net (decrease)/increase
in cash and cash equivalents (4,488) 27,065 10,041
Cash and cash equivalents
at the start of the period 16,114 6,073 6,073
Cash and cash equivalents
at the end of the period 11,626 33,138 16,114
---------- ---------- ----------
Notes to the consolidated financial statements
1 General information
Diurnal Group plc ('the Company') and its subsidiary (together
'the Group') are a clinical stage specialty pharmaceutical business
targeting patient needs in chronic endocrine (hormonal) diseases
which the Group believes are currently not met satisfactorily by
existing treatments. It has identified a number of specialist
endocrinology market opportunities in Europe and the US that are
together estimated to be multi-billlion Dollar opportunities.
The Company is a public limited company incorporated and
domiciled in the UK. Its registered number is 09846650. The address
of its registered office is Cardiff Medicentre, Heath Park,
Cardiff, CF14 4UJ and its primary and sole listing is on the
Alternative Investments Market (AIM) of the London Stock
Exchange.
2 Basis of preparation
As permitted these unaudited consolidated interim financial
statements have been prepared and approved by the Directors in
accordance with UK AIM rules and the IAS 34 'Interim financial
reporting' as adopted by the European Union. They should be read in
conjunction with audited consolidated financial statements for the
year ended 30 June 2016, which were prepared in accordance with
IFRS as adopted by the European Union.
The financial information contained in these interim financial
statements has been prepared under the historical cost convention,
and on a going concern basis. The interim financial information for
the six months ended 31 December 2016 and for the six months ended
31 December 2015 contained within this interim report do not
comprise statutory accounts within the meaning of section 434 of
the Companies Act 2006. The figures for the year ended 30 June 2016
have been extracted from the audited statutory accounts which were
approved by the Board of Directors on 11 October 2016 and delivered
to the Registrar of Companies. The report of the auditors on those
accounts was unqualified and did not contain statements under 498
(2) or (3) of the Companies Act 2006 and did not contain any
emphasis of matter.
The Directors are satisfied that the Group has sufficient
resources to continue in operation for the foreseeable future, a
period of not less than 12 months from the date of this report.
Accordingly, they continue to adopt the going concern basis in
preparing the financial information for the six months ended 31
December 2016.
3 Accounting policies
These consolidated interim financial statements for the six
months ended 31 December 2016 include the results of Diurnal Group
plc and its wholly-owned subsidiary, Diurnal Limited. The unaudited
results for the period have been prepared on the basis of
accounting policies adopted in the audited accounts for the year
ended 30 June 2016 and expected to be adopted in the financial year
ending 30 June 2017.
Where new IFRS standards amendments or interpretations became
effective in the six months to the 31 December 2016, there has been
no material impact on the net assets or results of the Group.
4 Segmental information
The Board regularly reviews the Company's performance and
balance sheet position for its operations and receives financial
information for the Group as a whole. As a consequence, the Group
has one reportable segment, which is Clinical Development.
Segmental profit is measured at operating loss level, as shown on
the face of the Consolidated Income Statement. As there is only one
reportable segment whose losses, expenses, assets, liabilities and
cash flows are measured and reported on a basis consistent with the
financial statements, no additional numerical disclosures are
necessary.
5 Loss per share
Unaudited Unaudited Audited
6 months 6 months 12 months
ended ended ended
31 Dec 31 Dec 30 Jun
2016 2015 2016
Loss for the period (GBP000) (5,696) (3,525) (6,571)
Weighted average number
of shares (000) 52,211 35,373 43,746
Basic and diluted loss
per share (pence per share) (10.9) (10.0) (15.0)
---------- ---------- ----------
The diluted loss per share is identical to the basic loss per
share in all periods, as potential dilutive shares are not treated
as dilutive since they would reduce the loss per share.
6 Taxation
Unaudited Unaudited Audited
6 months 6 months 12 months
ended ended ended
31 Dec 31 Dec 30 Jun
2016 2015 2016
GBP000 GBP000 GBP000
Current tax
- current year - - (491)
- adjustments for prior - - -
periods
Tax credit charge for the
period - - (491)
------------ ------------ ----------
The tax credit assessed for the period ended 30 June 2016
relates entirely to R&D tax credit relief.
7 Loans and borrowings
Unaudited Unaudited Audited
As at As at As at
31 Dec 31 Dec 30 Jun
2016 2015 2016
GBP000 GBP000 GBP000
Non-current loans and
borrowings
Convertible loans 3,373 3,111 3,239
Other non-current loans - - -
3,373 3,111 3,239
---------- ---------- --------
Total loans and borrowings 3,373 3,111 3,239
---------- ---------- --------
IP Group convertible loan
On 24 December 2015 the Company received GBP4.7m from IP2IPO
Limited, a subsidiary of IP Group plc under a convertible loan
agreement. The loan is interest-free and unsecured with a maturity
date of 24 December 2020 (or such other date as the parties agree)
at which point the Company may either repay the principal amount
outstanding in full or convert such amount into non-voting shares
at a lower nominal value to that of the Ordinary Shares to ensure
that IP Group plc did not have control of the Company. IP Group plc
may convert the principal outstanding in whole or in parts
exceeding GBP0.1m into ordinary shares calculated at the IPO share
price of GBP1.44 per share conditional on it not having control of
the Company resulting from the conversion.
The convertible loan note is a compound financial instrument
containing a host financial liability and an equity component as
there is a contractual obligation to deliver a fixed number of
shares at the IPO price if the loan note is converted.
At 31 December 2016, the amount outstanding comprised:
Unaudited Unaudited Audited
As at As at As at
31 Dec 31 Dec 30 Jun
2016 2015 2016
GBP000 GBP000 GBP000
Face value of convertible
loan issued on 24 December
2015 4,651 4,651 4,651
Equity component (1,486) (1,486) (1,486)
Issue costs relating to
the liability element (59) (59) (59)
Liability component on
initial recognition 3,106 3,106 3,106
Accrued interest 267 5 133
Liability component at
31 December 2016 3,373 3,111 3,239
Less amount included in - - -
current liabilities
Included in non-current
liabilities 3,373 3,111 3,239
---------- ---------- --------
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR DMGMFKRVGNZM
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March 20, 2017 03:01 ET (07:01 GMT)
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