TIDMFUM
RNS Number : 4354Q
Futura Medical PLC
12 September 2017
For immediate release 12 September 2017
Futura Medical plc
("Futura" or "the Company")
Interim Results for the six months 30 June 2017
Futura Medical plc (AIM: FUM), the innovative healthcare company
focused on advanced transdermal technology, is pleased to announce
its interim results for the six months ended 30 June 2017.
Highlights
MED2002: Eroxon(R) - Treatment for erectile dysfunction
("ED")
-- Key meetings with US and UK regulators in H1 2017 on the
further clinical development of MED2002 following breakthrough
clinical results in H2 2016
-- Pharmacokinetic study to begin in Q4 2017 with the results
informing a large-scale Phase III study to begin in H1 2018
-- Out-licensing discussions are ongoing
CSD500: Erectogenic condom
-- Successful product launch in the Middle East
-- Regulatory approval of additional brand names and packaging,
enabling launch in several EU countries
-- Strategic consideration currently being given to
commercialisation options for the countries covered by the Church
& Dwight agreement, notice of termination of which was received
in August 2017
Pain relief products TPR100 (diclofenac) and TIB200
(ibuprofen)
-- First out-licensing agreement signed in January 2017 for TPR100 in the UK
-- UK regulatory submission for TPR100 targeted for Q1 2018
-- Ongoing out-licensing discussions for TIB200 and TPR100 outside of the UK
Financial
-- Net loss of GBP1.60 million in the period (H1 2016: net loss
GBP1.89 million), reflecting planned reduction in R&D
expenditure in preparation for MED clinical programme commencing in
H2 2017
-- Cash resources of GBP10.12 million at 30 June 2017 (30 June 2016: GBP2.90 million)
James Barder, Futura's Chief Executive, commented: "Futura made
excellent progress in the first half of 2017 with MED2002, our
breakthrough erectile dysfunction gel, which is moving close to its
Phase III programme. This exciting programme brings the potential
for significant prescription sales and the prospect of an OTC
switch in the future. We are currently in commercial discussions
with potential licensing partners for MED2002 and we look forward
to announcing a licensing agreement in due course. Our novel
erectogenic condom, CSD500, has now been launched by our first
distributor and we anticipate further launches in the months
ahead."
A meeting for analysts will be held at 11.00am this morning, 12
September 2017, at the offices of Buchanan, 107 Cheapside, London
EC2V 6DN. There will be a live webcast of the analyst presentation.
If you would like to listen to the webcast, please log on to the
following web address approximately 5 minutes before 11.00am:
http://vm.buchanan.uk.com/2017/futuramedical120917/registration.htm
A recording of the webcast will be made available at
www.futuramedical.com following the results meeting.
For further information please contact:
Futura Medical plc
James Barder, Chief Executive Tel: +44 (0) 1483 685
670
Email to: james.barder@futuramedical.com www.futuramedical.com
N+1 Singer (Nominated Adviser
and Broker)
Aubrey Powell / Liz Yong Tel:+44 (0) 20 7496
3000
For media enquiries please
contact:
Buchanan
Mark Court / Sophie Cowles Tel: +44 (0) 20 7466
/ Stephanie Watson 5000
Notes to Editors
Futura Medical plc
Futura Medical is a pharmaceutical group that develops
innovative products for consumer healthcare. The Company is
developing a portfolio of products and its strategy is to license
their manufacture and distribution to major pharmaceutical and
healthcare groups.
Futura is based in Guildford, Surrey, and its shares trade on
the AIM market of the London Stock Exchange.
www.futuramedical.com
Chairman's and Chief Executive's Review
During the year to date we have continued to advance our
pipeline of product opportunities and have made particular progress
with MED2002, our topical gel for erectile dysfunction ("ED"),
which is progressing to the start of the Phase III clinical
programme required ahead of regulatory submission.
CSD500, our novel erectogenic condom, has been launched in the
Middle East, with over 500,000 condoms sold to date, and we are
working with our partners on launches in other countries. However
it was very disappointing that last month Church & Dwight,
which had licensing rights to CSD500 in North America and certain
European countries, decided to terminate its licensing agreement.
We understand from Church & Dwight that this was due to a
strategic change by them. Church & Dwight also confirmed that
their testing of the product re-confirmed the safety and clinical
results that we have previously obtained. The CSD500 product is now
"market ready" for distribution we have received verbal
confirmation of the approval of additional brand names and pack
design with relevant certification expected by the end of
September. This will enable launches by our distributors to proceed
in a number of other European countries, not covered by the Church
& Dwight agreement. We are therefore planning to expand the
number of countries where the product is launched within the
European Union ("EU"). At the same time we are actively considering
commercial options for countries previously licensed to Church
& Dwight, including digital marketing of CSD500 within the EU
countries.
The commercialisation of our pain relief portfolio continues on
track, with the UK regulatory submission for TPR100, our diclofenac
gel for topical pain relief, targeted to take place in Q1 2018 by
Thornton & Ross, a UK subsidiary of STADA Arzneimittel AG
("STADA").
Regulatory work has been a prominent feature in the year to date
reflecting strategies to commercialise our portfolio across the
greatest geographical reach. Across Europe, there has been a
consolidation of the "Notified Bodies" able to issue regulatory
approvals for medical devices, such as CSD500, with the result that
it is taking additional time to gain the required approvals. We
have therefore worked collaboratively with BSI, the UK based
Notified Body, to prioritise our submissions to minimise the impact
of delays. During the half year, we recruited a full time
regulatory affairs director from the pharmaceutical industry to
strengthen our in-house capability and optimise the use of our
network of external consultants.
Our balance sheet includes cash resources of GBP10.12 million as
at 30 June 2017 (30 June 2016: GBP2.90 million). We will continue
to use these cash resources prudently through careful consideration
of the design and ongoing scrutiny of our clinical trial
programmes.
Portfolio updates - Sexual healthcare
MED2002: Eroxon(R) Treatment for erectile dysfunction
MED2002, which uses our DermaSys(R) drug delivery system, is the
development name for our topical gel for the treatment of men with
ED. We hold patents to the product in a market worth US$5.6
billion(1) for currently available treatments and have registered
the brand name Eroxon(R) , though potential distributors may choose
to use other brand names. MED2002's rapid onset of action means
that it has the potential to become the world's fastest-acting
treatment for ED.
We announced breakthrough clinical results in September 2016 for
MED2002 and these results were shared in face-to-face meetings with
the UK and US regulatory authorities in March and April 2017. Both
meetings were highly constructive regarding the finalisation of
data requirements to achieve approval in the UK, Europe and the US.
Both authorities suggested we include a range of doses of MED2002,
including the original dose, in the upcoming Phase III studies to
achieve the broadest possible indications to cover mild, moderate
and severe ED.
Since our last update on MED2002, in July 2017, we have decided
to amend the sequencing of this Phase III programme. It is now
planned to commence the 40 subject pharmacokinetic ("PK") study, as
soon as possible during Q4 2017 with completion in Q1 2018, this
will enable us to check the tolerance to higher doses and define
the exact doses to be used in the Phase III trials in 2018. This
will avoid the inclusion of unacceptably high doses in the Phase
III studies. Meanwhile, planning for the two Phase III studies has
continued and detailed protocols have been defined. Final
regulatory endorsement shall be sought from European regulatory
authorities in October and from the US FDA under the mechanism of a
formal IND submission to be made in September. Running the PK and
Phase III studies in sequence allows us more time to consult with
regulatory authorities and we anticipate that this will mean that
the number of active doses can be reduced from four to three in the
Phase III study, thereby reducing cost and the time required to
complete patient recruitment, with an expected 10% overall
reduction in the number of patients required.
The filing will be made in the USA using the 505(2)(b) route in
which safety data from another product can be used provided that
similarity is demonstrated. In Europe the intent is to follow the
decentralised procedure under Article 8(3), subject to regulatory
confirmation, which will enable us to reference the long history of
safe use of the active ingredient for other indications. This
regulatory route will also give us 10 years of data exclusivity,
from the date of approval, thereby further strengthening our
intellectual property position.
We have had substantial interest in MED2002 from potential
licensing partners, seeking both global and regional deals. We
continue to work towards our objective of being able to announce a
licensing deal by the end of the year, based on existing
negotiations.
MED2002, as a topically applied gel with a very rapid speed of
onset, has the potential to be a significant product with combined
forecast peak sales of more than US$1 billion in a market currently
dominated by Viagra(R) and Cialis(R) which are taken orally and do
not take effect for at least 30 minutes and typically one hour or
more(2) .
MED2002 has substantial potential in the treatment of ED, as the
fastest-acting compound with a favourable safety profile, in the
prescription market where it will be marketed first. These
characteristics also give MED2002 the potential to become one of
the largest over-the-counter ("OTC") products in the global OTC
marketplace as it has strong potential to be switched from
prescription to OTC status, after a period of marketing on
prescription, to extend the commercial potential. As announced
earlier this year, the market research firm Ipsos used its
validated healthcare forecasting model to forecast peak OTC annual
sales for MED2002 in key countries worldwide of more than US$650
million. Importantly, Ipsos forecasts that some 73% of these
potential OTC sales would be incremental to the prescription
category. The Ipsos valuation was based on the outcomes from
primary market research carried out amongst 400 men, with ED or
suspected ED, in the USA. The respondents were shown a concept
about MED2002 as part of the market research but they did not use
the product as it is currently in clinical development. The key
findings of the market research showed that the respondents
believed that the product, once approved, would be highly
differentiated from existing products and that its claims would
meet their needs. MED2002's rapid onset of action was the key
feature that attracted respondents to the product.
MED2002's patent protection runs until August 2028 in the USA
and August 2025 in Europe. An additional patent filing announced
earlier this year could extend patent protection through to
2038.
Note (1) IMS Health - MSP 2016 (15 key countries)
Note (2) US patient information for Viagra(R) and Cialis(R)
CSD500: Condom containing the erectogenic Zanifil(R) gel
CSD500 benefits from three clinically proven claims: the
maintenance of a firmer erection, maximised penile size and a
longer lasting sexual experience for women. CSD500, which is CE
Marked, represents real innovation in an industry where there has
been limited new product development. Futura's unique intellectual
property for CSD500 has been protected throughout the world through
the filing and granting of a range of patents.
Consent to use additional brand names and pack design for
additional EU countries, with an already CE Mark approved product,
continues to take considerable time owing to the changing structure
of the EU regulatory bodies, and we have therefore prioritised our
submissions in order of commercial relevance as far as possible. We
have received verbal confirmation of approval of additional brand
names and pack design with relevant certification expected by the
end of September. This will enable launches by our distributors to
proceed in a number of EU countries.
CSD500 was launched in Saudi Arabia in the first half by our
distributor Kabey and further launches in the MENA region are
planned as soon as the necessary regulatory approvals on a country
by country basis are granted. Kabey is using the brand name Futura
Max Manex Super and its promotion is based on direct retail
marketing rather than an online campaign. Kabey will shortly
receive its third shipment of stock, to date 540,000 condoms have
been sold with initial feedback from users of the product being
positive.
CSD500 is proceeding to launch in other countries, subject to
relevant regulatory approvals, though we were disappointed that
Church & Dwight, which had licensing rights to CSD500 in North
America and certain European countries, decided to terminate its
licensing agreement and return the associated marketing rights, as
announced last month. We are actively considering commercial
options, including digital marketing of CSD500 within the EU, and
will inform shareholders once a decision is reached on how we plan
to commercialise CSD500 in those countries previously licensed to
Church & Dwight.
Last year we successfully modified the manufacturing process to
achieve an extended shelf life for CSD500 to meet the requirements
of our distribution partners. Both of our manufacturing partners -
TTK in India and our European manufacturer - have the required
approvals to ship CSD500 to any country in which the product is
approved. During the first half of this year TTK received
regulatory approval from the relevant EU Notified Body to
manufacture the extended shelf life product. We continue to await
approval from the same EU Notified Body of the extended shelf life
product for our European based manufacturer, which is now our top
priority with that Notified Body.
Portfolio updates - Topical pain relief
The rapid skin permeation rates offered by Futura's transdermal
delivery system, DermaSys(R) , have created a major opportunity in
topical pain relief. Rapid skin permeation offers potential
benefits in pain management including: improved onset of action,
duration and degree of pain relief. DermaSys(R) also allows the
potential to have a twice daily dosing regimen which provides a
compelling commercial proposition for ibuprofen which is currently
dosed three to four times per day.
Futura has previously demonstrated statistically significant
results from its two non-steroidal anti-inflammatory drug ("NSAID")
programmes, TPR100 (2% diclofenac gel) and TIB200 (10% ibuprofen
gel), in a clinical study.
Thornton & Ross, part of STADA, holds the UK rights to
TPR100, our novel diclofenac gel for pain relief. We expect the
regulatory filing for marketing authorisation to be made by
Thornton & Ross early next year. Under the terms of its
licensing agreement, Thornton & Ross holds rights to
manufacture, market and distribute TPR100 in the UK for the
lifetime of the product's patents, which run to 2028 in the UK.
We continue in licensing discussions in respect of the
commercialisation of TPR100 outside of the UK and are also in
discussions in connection with our ibuprofen based product TIB200.
As previously stated, we do not intend to conduct any further
clinical work without a clear indication of interest and commitment
from potential commercial partners.
Our objective is for our pain relief products to be
best-in-class. The rationale for this is that the National
Institute for Health and Care Excellence (NICE) gives clear
guidance to physicians to prescribe topical NSAIDs in the first
instance for joint pain associated with osteoarthritis, in
preference to oral NSAIDs, owing to concerns over the long term use
of oral NSAIDs. This means that the best-in-class topical treatment
should be the first choice for doctors in the initial treatment of
pain and therefore represents a substantial opportunity in a market
with global sales estimated at US$2.9 billion(3) .
Outlook
Futura made excellent progress in the first half of 2017 with
MED2002, our breakthrough erectile dysfunction gel, which is moving
close to its Phase III programme. This exciting programme brings
the potential for significant prescription sales and the prospect
of an OTC switch in the future. We are currently in commercial
discussions with potential licensing partners for MED2002 and we
look forward to announcing a licensing agreement in due course. Our
novel erectogenic condom, CSD500, has now been launched by our
first distributor and we anticipate further launches in the months
ahead.
John Clarke James Barder
Chairman Chief Executive
Note (3) IMS Health Estimate, MSP, 2015
Group Statement of Comprehensive Income
Unaudited Unaudited Audited
6 months 6 months year
ended ended ended
30 June 30 June 31 December
2017 2016 2016
Notes GBP GBP GBP
Revenue 1.5 362,557 66,900 170,362
Research and development
costs (1,764,100) (1,785,356) (3,509,680)
Administrative costs (605,742) (548,803) (1,214,755)
------------------------------ ------ ------------------- -------------- --------------
Operating loss (2,007,285) (2,267,259) (4,554,073)
Finance income 9,419 7,037 14,714
------------------------------ ------ ------------------- -------------- --------------
Loss before tax (1,997,866) (2,260,222) (4,539,359)
Taxation 401,422 369,058 842,246
------------------------------ ------ ------------------- -------------- --------------
Total comprehensive loss
for the period attributable
to owners of the parent
company (1,596,444) (1,891,164) (3,697,113)
------------------------------ ------ ------------------- -------------- --------------
Loss per share (pence) 3 (1.32p) (1.91p) (3.65p)
------------------------------ ------ ------------------- -------------- --------------
All amounts relate to continuing activities.
Group Statement of Changes in Equity
Share Share Merger Retained Total
Capital Premium Reserve Losses Equity
GBP GBP GBP GBP GBP
--------------------- -------- ------------ ----------- -------------- --------------
At 1 January 2016
- audited 198,185 33,053,345 1,152,165 (29,617,464) 4,786,231
---------------------- -------- ------------ ----------- -------------- --------------
Total comprehensive
loss for the period - - - (1,891,164) (1,891,164)
Share-based payment - - - 60,200 60,200
---------------------- -------- ------------ ----------- -------------- --------------
At 30 June 2016
- unaudited 198,185 33,053,345 1,152,165 (31,448,428) 2,955,267
---------------------- -------- ------------ ----------- -------------- --------------
Total comprehensive
loss for the period - - - (1,805,949) (1,805,949)
Share-based payment - - - (5,795) (5,795)
Shares issued during
the period 42,105 11,957,895 - - 12,000,000
Cost of share issue - (559,495) - - (559,495)
---------------------- -------- ------------ ----------- -------------- --------------
At 31 December
2016 - audited 240,290 44,451,745 1,152,165 (33,260,172) 12,584,028
---------------------- -------- ------------ ----------- -------------- --------------
Total comprehensive
loss for the period - - - (1,596,444) (1,596,444)
Share-based payment - - - 90,469 90,469
Shares issued during
the period 1,027 198,267 - - 199,29
---------------------- -------- ------------ ----------- -------------- --------------
At 30 June 2017
- unaudited 241,317 44,650,012 1,152,165 (34,766,147) 11,277,347
---------------------- -------- ------------ ----------- -------------- --------------
Share premium represents amounts subscribed for share capital in
excess of nominal value, less the related costs of share
issues.
Merger reserve represents the reserve arising on the acquisition
of Futura Medical Developments Limited in 2001 via a share for
share exchange accounted for as a group reconstruction using merger
accounting under UK GAAP.
Retained losses represent cumulative net losses recognised in
the Group Statement of Comprehensive Income. The total
comprehensive loss for the year represents the total recognised
income and expense for the year.
Group Statement of Financial Position
Unaudited Unaudited Audited
30 June 30 June 31 December
2017 2016 2016
Notes GBP GBP GBP
Assets
Non-current assets
Plant and equipment 48,118 17,283 21,351
Total non-current
assets 48,118 17,283 21,351
---------------------------- ----- ------------ ------------ ------------
Current assets
Inventories 83,632 197,733 83,641
Trade and other receivables 4 151,909 179,114 138,989
Current tax asset 1,243,668 369,058 842,246
Cash and cash equivalents 5 10,122,625 2,900,248 12,352,978
---------------------------- ----- ------------ ------------ ------------
Total current assets 11,601,834 3,646,153 13,417,854
---------------------------- ----- ------------ ------------ ------------
Liabilities
Current liabilities
Trade and other payables (372,605) (708,169) (855,177)
---------------------------- ----- ------------ ------------ ------------
Total liabilities (372,605) (708,169) (855,177)
---------------------------- ----- ------------ ------------ ------------
Total net assets 11,277,347 2,955,267 12,584,028
---------------------------- ----- ------------ ------------ ------------
Capital and reserves
attributable to
owners of the parent
company
Share capital 241,317 198,185 240,290
Share premium 44,650,012 33,053,345 44,451,745
Merger reserve 1,152,165 1,152,165 1,152,165
Retained losses (34,766,147) (31,448,428) (33,260,172)
---------------------------- ----- ------------ ------------ ------------
Total equity 11,277,347 2,955,267 12,584,028
---------------------------- ----- ------------ ------------ ------------
Group Statement of Cash Flows
Unaudited Unaudited Audited
6 months 6 months year
ended ended ended
30 June 30 June 31 December
2017 2016 2016
GBP GBP GBP
Cash flows from operating
activities
Loss before tax (1,997,866) (2,260,222) (4,539,359)
Adjustments for:
Depreciation (6,005) 3,332 6,247
Finance income (9,419) (7,037) (14,714)
Share-based payment charge 90,469 60,200 54,405
-------------------------------- ---------------------- ---------------- -------------
Cash flows from operating
activities before changes
in working capital (1,922,821) (2,203,727) (4,493,421)
-------------------------------- ---------------------- ---------------- -------------
Decrease / (increase) in
inventories 9 (33,966) 80,126
(Increase) / decrease in
trade and other receivables (12,920) (21,815) 16,981
(Decrease) / increase in
trade and other payables (482,572) (45,724) 101,284
-------------------------------- ---------------------- ---------------- -------------
Cash used in operations (2,418,304) (2,305,232) (4,295,030)
-------------------------------- ---------------------- ---------------- -------------
Income tax received - 997,036 997,036
-------------------------------- ---------------------- ---------------- -------------
Net cash used in operating
activities (2,418,304) (1,308,196) (3,297,994)
-------------------------------- ---------------------- ---------------- -------------
Cash flows from investing
activities
Purchase of plant and equipment (20,762) (500) (7,483)
Interest received 9,419 20,650 29,656
Cash (absorbed ) / generated
by investing activities (11,343) 20,150 22,173
-------------------------------- ---------------------- ---------------- -------------
Cash flows from financing
activities
Issue of ordinary shares 199,294 - 12,000,000
Expenses paid in connection
with share issues - - (559,495)
Cash generated by financing
activities 199,294 - 11,440,505
-------------------------------- ---------------------- ---------------- -------------
(Decrease) / increase in
cash and cash equivalents (2,230,353) (1,288,046) 8,164,684
Cash and cash equivalents
at beginning of period 12,352,978 4,188,294 4,188,294
-------------------------------- ---------------------- ---------------- -------------
Cash and cash equivalents
at end of period 10,122,625 2,900,248 12,352,978
-------------------------------- ---------------------- ---------------- -------------
Notes to the Group Interim Financial Information
1. Accounting policies
1.1 Basis of preparation
The unaudited Interim Report was approved by the Board of
Directors on 11 September 2017.
The interim financial information for the six months ended 30
June 2017 and for the six months ended 30 June 2016 does not
constitute statutory accounts within the meaning of section 434(3)
of the Companies Act 2006 and is unaudited.
The Group financial information for the year ended 31 December
2016 which has been extracted from the financial statements of the
statutory accounts ("Annual Report") of Futura Medical plc, which
were prepared in accordance with International Financial Reporting
Standards ("IFRSs") as adopted by the European Union and
International Financial Reporting Interpretations Committee
("IFRIC") interpretations that were applicable for the year ended
31 December 2016, does not constitute the full statutory accounts
for that period. The Annual Report for 2016 has been filed with the
Registrar of Companies. The Independent Auditor's Report on those
financial statements was unqualified, did not draw attention to any
matters by way of emphasis and did not contain a statement under
sections 498(2) or 498(3) of the Companies Act 2006.
1.2 Going concern
The Group had an operating loss of GBP2.01 million for the
period (H1 2016: GBP2.27million; 2016 financial year: GBP4.55
million), but had a positive net asset value of GBP11.28 million at
30 June 2017 (30 June 2016: GBP2.96 million; 31 December 2016:
GBP12.58 million).
The Group had cash balances of GBP10.12 million at 30 June 2017,
with a net cash outflow of GBP2.23 million in the period (30 June
2016: GBP2.90 million and a net cash outflow of GBP1.29 million; 31
December 2016: GBP12.35 million and a net cash inflow of GBP8.16
million). The Directors consider this to represent sufficient funds
for the foreseeable future, taking into account the Group's current
development plans.
In assessing the Group's going concern ability the Directors
have considered all relevant available information about the future
trading activities of the Group, including profit forecasts, cash
forecasts and funding. Based on this assessment, the Interim Report
has been prepared on a going concern basis and the Directors have
no reason to believe that the Group will not operate as a going
concern for the foreseeable future.
1.3 Accounting developments
The following new standards, amendments and interpretations,
which are not yet effective and have not been adopted early in
these financial statements do not currently have a material impact,
but the future impact will be considered on an ongoing basis:
-- IFRS 15 Revenue from Contracts with Customers (effective 1 January 2018)
-- IFRS 9 Financial Instruments (effective 1 January 2018)
-- IFRS 16 Leases (effective 1 January 2019)
1.4 Basis of consolidation
Where the Company has the power, either directly or indirectly,
to govern the financial and operating policies of another entity or
business, so as to obtain benefits from its activities, it is
classified as a subsidiary. The Group financial information present
the results of the Company and its subsidiaries Futura Medical
Developments Limited and Futura Consumer Healthcare Limited as if
they formed a single entity ("the Group"). Intra-group transactions
and balances are eliminated in preparing the Group financial
information.
1.5 Revenue
Revenue comprises the fair value received or receivable for
milestone income and royalties, net of value added tax.
The accounting policies for the principal revenue streams of the
Group are as follows:
(i) Non-refundable milestone income is recognised as revenue in
the accounting period in which the milestones are achieved. If any
milestone income is creditable against royalty payments then it is
deferred and released to the Consolidated Statement of
Comprehensive Income over the accounting periods in which the
royalties would otherwise be receivable.
(ii) Royalty income relating to the sale by a licensee of
licensed product is recognised on an accruals basis in accordance
with the substance of the relevant agreement and based on the
receipt from the licensee of the relevant information to enable
calculation of the royalty due.
1.6 Leased assets
Leases which contain terms whereby the Group does not assume
substantially all the risks and rewards incidental to ownership of
the leased item are classified as operating leases. Operating lease
rentals are charged to the Group Statement of Comprehensive Income
on a straight-line basis over the lease term. The Group does not
hold any assets under finance leases.
1.7 Intangible assets
Research and development ("R&D")
Expenditure incurred on the development of internally generated
products is capitalised if it can be demonstrated that:
-- it is technically feasible to develop the product for it to be sold;
-- adequate resources are available to complete the development;
-- there is an intention to complete and sell the product;
-- the Group is able to out-license or sell the product;
-- sale of the product will generate future economic benefits; and
-- expenditure on the project can be measured reliably.
Capitalised development costs are amortised over the periods in
which the Group expects to benefit from selling the products
developed but not exceeding five years. The amortisation expense is
included in R&D costs recognised in the Group Statement of
Comprehensive Income. The useful life and the value of the
capitalised development cost are assessed for impairment at least
annually. The value is written down immediately if impairment has
occurred and the unimpaired cost amortised over the reduced useful
life. The Directors consider that the criteria to capitalise
development expenditure are not met for a product prior to that
product being commercially launched in at least one country.
Development expenditure not satisfying the above criteria and
expenditure on the research phase of internal projects are expensed
in R&D costs recognised in the Group Statement of Comprehensive
Income as incurred.
Patents and trademarks
Costs incurred in establishing patents and trademarks are either
expensed or capitalised in accordance with the corresponding
treatment of the development expenditure for the product to which
they relate.
1.8 Plant and equipment
Plant and equipment is initially recognised at cost, and
subsequently at cost less accumulated depreciation and any
accumulated impairment losses. Cost includes expenditure that is
directly attributable to the acquisition of the items. Depreciation
is charged to the Group Statement of Comprehensive Income at rates
calculated to write off the cost, less estimated residual value, of
each asset on a straight-line basis over its estimated useful
life.
The assets' residual values and useful lives are determined by
the Directors and reviewed and adjusted if appropriate at each
Group Statement of Financial Position date.
1.9 Impairment of non-financial assets
Assets that are subject to depreciation are reviewed for
impairment on a half-yearly basis and when events or circumstances
suggest that the carrying amount may not be recoverable. For the
purpose of assessing impairment, assets are grouped at the lowest
levels for which there are separately identifiable cash flows (cash
generating units). An impairment loss is recognised immediately in
the Group Statement of Comprehensive Income for the amount by which
the asset's carrying amount exceeds its recoverable amount.
Recoverable amount is the higher of fair value, less disposal
costs, 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.
Where an impairment loss subsequently reverses, the carrying
amount of the asset is increased to the revised estimate of its
recoverable amount, but so that the increased carrying amount does
not exceed the carrying amount that would have been determined had
no impairment loss been recognised for the asset in prior periods.
A reversal of an impairment loss is recognised immediately in the
Group Statement of Comprehensive Income.
1.10 Inventories
Inventories are materials and supplies to be consumed in the
course of R&D and are initially recognised at cost, and
subsequently at the lower of cost and net realisable value. Cost
includes materials, related contract manufacturing costs and other
direct costs. Cost is calculated using the first-in, first-out
method. Net realisable value is based on estimated selling price,
less further costs expected to be incurred to completion and
disposal.
A provision is recognised immediately in the Group Statement of
Comprehensive Income in respect of obsolete, slow-moving or
defective items, where appropriate.
1.11 Financial instruments
Financial assets
The Group classifies its financial assets in the category of
loans and receivables, comprising 'trade and other receivables' and
'cash and cash equivalents'. They are recognised initially at fair
value and subsequently at amortised cost using the effective
interest rate method.
Trade and other receivables are recognised initially at fair
value and are subsequently measured at amortised cost using the
effective interest rate method, less an estimate made for
impairment based on a review of all past due amounts at the year
end. A provision for impairment of trade and other receivables is
established when there is objective evidence that the Group will
not be able to collect all amounts due. If an impairment loss is
required the carrying amount of the trade or other receivable is
reduced through the use of an allowance account and the amount of
the loss recognised immediately in the Consolidated Statement of
Comprehensive Income in administrative costs.
Cash and cash equivalents are financial assets and comprise cash
in hand and sterling short-term money market funds which are held
by the Group so as to be available to meet short-term cash
commitments.
The Group assesses at each Consolidated Statement of Financial
Position date whether there is objective evidence that a financial
asset is impaired.
Financial liabilities
The Group's financial liabilities comprise 'trade and other
payables' recognised initially at fair value and subsequently at
amortised cost using the effective interest rate method.
1.12 Taxation
Income tax is recognised or provided at amounts expected to be
recovered or to be paid using the tax rates and tax laws that have
been enacted or substantively enacted at the Consolidated Statement
of Financial Position date. R&D tax credits are recognised on
an accruals basis and are included as an income tax credit under
current assets.
Deferred tax assets and liabilities are recognised where the
carrying amount of an asset or liability on the Consolidated
Statement of Financial Position date differs from its tax base,
except for differences arising on:
-- the initial recognition of an asset or liability in a
transaction which is not a business combination and which at the
time of the transaction affects neither accounting profit nor
taxable profit; and
-- investments in subsidiaries and jointly controlled entities
where the Group is able to control the timing of the reversal of
the difference and it is probable that the difference will not
reverse in the foreseeable future.
Recognition of deferred tax assets is restricted to those
instances where it is probable that taxable profits will be
available against which the difference can be utilised.
The amount of the asset or liability is determined using tax
rates that have been enacted or substantively enacted by the
Consolidated Statement of Financial Position date and are expected
to apply when the deferred tax liabilities/(assets) are
settled/(recovered). Deferred tax balances are not discounted.
Deferred tax assets and liabilities are offset when the Group
has a legally enforceable right to offset current tax assets and
liabilities and the deferred tax assets and liabilities relate to
taxes levied by the same tax authority on either:
-- the same taxable group company; or
-- different group entities which intend to settle current tax
assets and liabilities on a net basis, or to realise the assets and
settle the liabilities simultaneously, on each future period in
which significant amounts of deferred tax assets or liabilities are
expected to be settled or recovered.
1.13 Foreign currency translation
Foreign currency transactions are translated into the functional
currency using the exchange rates prevailing at the dates of the
transactions. Foreign exchange gains and losses resulting from the
settlement of such transactions and from the translation at period
end exchange rates of monetary assets and liabilities denominated
in foreign currencies are recognised in the Consolidated Statement
of Comprehensive Income in the period in which they arise.
1.14 Employee benefits
(i) Defined contribution plans
The Group provides retirement benefits to all employees who wish
to participate in 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 Consolidated Statement of Comprehensive Income
in the period in which they become payable.
(ii) Accrued holiday pay
Provision is made at each Consolidated Statement of Financial
Position date for holidays accrued but not taken, at applicable
rates of salary. The expected cost of compensated short-term
absence (holidays) is charged to the Consolidated Statement of
Comprehensive Income on an accruals basis.
(iii) Share-based payment transactions
The Group operates an equity-settled share-based compensation
plan. For share options awarded to employees, and others providing
similar services, the fair value of the share options at the date
of grant is charged to the Consolidated Statement of Comprehensive
Income over the vesting period. Non-market vesting conditions are
taken into account by adjusting the number of equity instruments
expected to vest at each Consolidated Statement of Financial
Position date so that, ultimately, the cumulative amount recognised
over the vesting period is based on the number of share options
that eventually vest. There are no market vesting conditions. If
the terms and conditions of share options are modified before
vesting, the change in the fair value of the share options,
measured immediately before and after the modification, is charged
to the Consolidated Statement of Comprehensive Income over the
remaining vesting period. The proceeds received when share options
are exercised, net of any directly attributable transaction costs,
are credited to share capital (nominal value) and the balance to
share premium. All employee share option holders enter into an HM
Revenue & Customs joint election to transfer the employers'
national insurance contribution potential liability to the
employee, therefore no Group asset or liability arises.
(iv) Long-term incentive plan
The Group operates a long-term incentive plan for all staff and
Directors. The quantum of any awards receivable will depend on the
Group achieving set milestones and the share price at the time
relative to targets set in advance. The Group can exercise
discretion in settling any award in equity or in cash.
1.15 Finance income
Interest income is recognised on a time-proportion basis using
the effective interest rate method.
1.16 Critical accounting estimates, assumptions and
judgements
Critical accounting estimates, assumptions and judgements are
continually evaluated by the Directors based on available
information and experience. As the use of estimates is inherent in
financial reporting actual results could differ from these
estimates.
Estimates and assumptions
Share-based payments
The Group operates an equity-settled share-based compensation
plan for employee (and consultant) services to be received and the
corresponding increases in equity are measured by reference to the
fair value of the equity instruments as at the date of grant. The
fair value determination is based on the principles of the
Black-Scholes Model, the inputs of which require the use of
estimation.
Judgements
Deferred tax recognition
The determination of probable future profits, against which the
Group's deferred tax profits can be offset, requires judgement.
2. Segment reporting
The Group is organised and operates as one segment. The Group's
revenue analysed by geographical location of the Group's customers
is:
Unaudited Unaudited Audited
6 months 6 months 12 months
ended ended ended
30 June 30 June 31 December
2017 2016 2016
GBP GBP GBP
Middle East / ROW 12,557 21,208 118,192
United States of America - 35,473 35,473
Europe 350,000 10,219 16,697
362,557 66,900 170,362
------------------------- --------- --------- ------------
3. Loss per share (pence)
The calculation of the loss per share is based on a loss of
GBP1,596,444 (six months ended 30 June 2016: loss of GBP1,891,164;
year ended 31 December 2016: loss of GBP3,697,113) and on a
weighted average number of shares in issue of 120,603,347 (six
months ended 30 June 2016: 99,092,318; year ended 31 December 2016:
101,350,836). The loss attributable to equity holders of the
Company for the purpose of calculating the fully diluted loss per
share is identical to that used for calculating the basic loss per
share. The exercise of share options, or the issue of shares under
the long-term incentive scheme, would have the effect of reducing
the loss per share and is therefore anti-dilutive under the terms
of IAS 33 'Earnings per Share'.
4. Trade and other receivables
Unaudited Unaudited Audited
30 June 30 June 31 December
2017 2016 2016
GBP GBP GBP
Amounts receivable within
one year:
Trade receivables 6,428 33,711 20,364
Other receivables 10,870 46,402 14,622
Prepayments and accrued
income 134,611 99,001 104,003
-------------------------- --------- --------- ------------
151,909 179,114 138,989
-------------------------- --------- --------- ------------
Trade and other receivables do not contain any impaired assets.
The Group does not hold any collateral as security and the maximum
exposure to credit risk at the Group Statement of Financial
Position date is the fair value of each class of receivable.
5. Cash and cash equivalents
Unaudited Unaudited Audited
30 June 30 June 31 December
2017 2016 2016
GBP GBP GBP
Cash at bank and in hand 258,588 70,021 147,200
Sterling fixed rate short-term
deposits 9,864,037 2,830,227 12,205,778
10,122,625 2,900,248 12,352,978
------------------------------- ---------- --------- ------------
6. Related party transactions
Related parties, as defined by IAS 24 'Related Party
Disclosures', are the wholly owned subsidiary companies: Futura
Medical Developments Limited and Futura Consumer Healthcare Limited
and the Board. Transactions between the Company and the wholly
owned subsidiary companies have been eliminated on consolidation
and are not disclosed.
Company number
4206001
Directors
John Clarke Non-Executive Chairman
James Barder Chief Executive
Derek Martin Finance Director
Jonathan Freeman Non-Executive Director
Ken James Non-Executive Director
Audit committee
Jonathan Freeman
Ken James
Secretary and registered office
Derek Martin
Futura Medical plc
Surrey Technology Centre
40 Occam Road
Guildford
Surrey
GU2 7YG
Nominated adviser and broker
N+1 Singer
1 Bartholomew Lane
London
EC2N 2AX
Principal solicitors
Memery Crystal LLP
44 Southampton Buildings
London
WC2A 1AP
Remuneration committee
Jonathan Freeman
John Clarke
Auditors
KPMG
Arlington Business Park
Theale
Reading
Berkshire
RG7 4SD
Patent attorneys
Withers & Rogers LLP
4 More London Riverside
London
SE1 2AU
Principal bankers
HSBC Bank
12A North Street
Guildford
GU1 4AF
Nominations committee
John Clarke
Jonathan Freeman
Registrars
Capita Registrars
The Registry
34 Beckenham Road
Beckenham
Kent
BR3 4TU
Public relations advisers
Buchanan Communications Limited
107 Cheapside
London
EC2V 6DN
Investment managers
Royal London Asset Management Limited
PO Box 9035
Chelmsford
CM99 2XB
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR SFSEEFFWSELU
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September 12, 2017 02:01 ET (06:01 GMT)
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