TIDMFUM
RNS Number : 6360H
Futura Medical PLC
14 March 2018
For immediate release 14 March 2018
Futura Medical plc
("Futura" or "the Company")
Preliminary Results for the year ended 31 December 2017
Futura Medical plc (AIM: FUM), the innovative healthcare company
focused on advanced transdermal technology, is pleased to announce
its preliminary results for the year ended 31 December 2017.
Development and Commercial Highlights:
MED2002: Eroxon(R) - Treatment for erectile dysfunction
("ED")
-- Key meetings held and positive feedback received from US
& European regulators on the two phase III trials planned in
our clinical development programme
-- Interim pharmacokinetic data indicates that at least two
higher strength doses of MED2002 are eligible for the planned Phase
III clinical studies compared with the dose used in the successful
Phase II study
-- Commercial out-licensing discussions at an advanced stage
CSD500: Erectogenic condom
-- Successful product launch in Saudi Arabia with further order placed and in production
-- Further launches in 2018 underway
TPR100 (diclofenac) and TIB200 (ibuprofen): Pain relief
products
-- First out-licensing agreement signed for TPR100
-- Commercial out-licensing discussions continuing for other countries
Organisational and Financial Highlights:
-- Appointment of Angela Hildreth as Finance Director and Chief Operating Officer
-- Net loss of GBP3.90 million (2016: Net loss of GBP3.70
million), reflecting planned increase in R&D expenditure on the
MED2002 clinical programme
-- Cash resources of GBP8.36 million at 31 December 2017 (31
December 2016: GBP12.35 million)
James Barder, Futura's Chief Executive, commented: "2018 has
started well particularly with the progress of our Phase III
clinical programme for MED2002, our breakthrough erectile
dysfunction gel. The positive interim data announced yesterday from
our pharmacokinetic study indicates that we will be able to include
at least two higher strength doses of MED2002 in our Phase III
clinical studies along with the dose used in our earlier Phase II
study thereby offering the potential for improved efficacy.
Commercial discussions, especially with MED2002, are advancing well
and further CSD500 launches are underway."
Analyst meeting and webcast
A meeting for analysts will be held at 11.00am this morning, 14
March 2018, at the offices of Buchanan, 107 Cheapside, London EC2V
6DN. There will be a live webcast of the analyst presentation. To
listen to the webcast, please log on to the following web address
approximately 5 minutes before 11.00am:
http://vm.buchanan.uk.com/2018/futuramedical140318/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
Substantial progress was made in 2017 with MED2002, our topical
gel for erectile dysfunction ("ED"), particularly in advancing the
product into its Phase III clinical programme. MED2002 offers major
and disruptive potential in terms of prescription sales and a
subsequent over-the-counter switch. The rapid onset of action of
MED2002 differentiates it from existing treatments and gives it the
potential to be the world's fastest-acting treatment for ED. Also
during the year, we continued to advance the commercialisation of
CSD500, our novel erectogenic condom, and to progress our pain
relief franchise.
Following our breakthrough Phase II clinical results announced
in September 2016, our key objective for 2017 was to progress
MED2002 both clinically and commercially. Discussions towards the
out-licensing of MED2002 advanced materially during the year and,
as previously stated, we believe that a commercial out-licensing
agreement will be announced in the first half of this year though,
of course, the timing will also be determined by the detail of
negotiations.
The quality of the Phase II results was underlined in January
2018 when the leading, peer-reviewed scientific publication for
sexual health, the Journal of Sexual Medicine, published its
analysis of the data from the study, which had met its primary
endpoint in showing a statistically significant improvement in
erectile function in men compared with placebo. During the year we
finalised the design of our Phase III programme, comprising a
pharmacokinetic ("PK") study and two Phase III studies. We were
very pleased yesterday to report positive interim data from the PK
study, which commenced in November last year. The data indicated
that we would be able to use at least two higher doses of MED2002
than the dose used in the Phase II study. This creates the
potential for increased efficacy in the Phase III studies with the
objective of being able to treat patients experiencing more severe
ED.
CSD500 is now actively marketed in the Middle East, where more
than 500,000 condoms have been supplied to date under the Manex
brand; in the test market of Benelux countries more than 100,000
CSD500 condoms have been sold under the Blue Diamond brand. Whilst
these sales are encouraging, our commercialisation plans in North
America and certain European countries were impacted by Church
& Dwight's decision to return licensing rights to the product
to Futura owing to a strategic change at their business. We
continue in commercial discussions for those countries without a
distribution partner for CSD500, including those that formed part
of the Church & Dwight agreement.
As previously announced the commercialisation of our pain relief
products continues, with the UK regulatory dossier submission of
TPR100, our diclofenac gel for topical pain relief, close to
completion with filing expected in Q2 of this year by Thornton
& Ross, a UK subsidiary of STADA Arzneimittel AG ("STADA"). We
are at an advanced stage of discussions in connection with a
further regional licensing deal for TPR100 with an additional
prospective partner.
Our balance sheet remains strong with cash resources of GBP8.36
million at 31 December 2017 (31 December 2016: GBP12.35 million).
We will continue to use these cash resources prudently through
careful consideration of the timing and design 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, with
speed of onset within 10 minutes in 70 percent of intercourse
attempts in our Phase II clinical trial, means that it has the
potential to be the world's fastest-acting treatment for ED.
The breakthrough clinical results announced in September 2016
were discussed with regulators in the UK, Europe and US during 2017
with a view to confirming the optimal clinical study pathway to
achieve marketing approval throughout Europe and in the US. As a
result of these interactions, we decided to begin the Phase III
programme with an enlarged PK study, which was designed to assess
the tolerance of 40 healthy subjects to a range of doses of
MED2002, including higher doses than the dose used in the
breakthrough results study.
The PK study, which commenced in November 2017, is evaluating
the dose of 0.2% w/w glyceryl trinitrate ("GTN") used in the
previously reported successful Phase II clinical study, and higher
doses of 0.4%, 0.6% and 0.8% to assess their suitability for
maximising efficacy in the two planned Phase III studies.
One of the key goals of the PK study was to demonstrate that the
blood plasma concentrations of GTN of at least some of the higher
doses fall within the plasma concentrations of a US reference
product, Nitrostat(R) , which is used to treat angina.
Demonstrating this equivalence enables the Company to use the FDA
505(b)(2) route to regulatory approval where at least some of the
safety information required for approval comes from studies not
conducted by or for Futura saving both time and money.
We were pleased to report yesterday that in this phase of the
study in 30 subjects, the 0.2%, 0.4% and 0.6% doses met this
requirement. The 0.8% dose had similar but slightly higher levels
of GTN in the blood plasma than Nitrostat(R) , this and other data
will be further evaluated in the second phase of the PK study
before the Company decides the final doses to be included in the
first Phase III study. Additionally, as the dose of MED2002 was
increased, the plasma concentrations increased demonstrating that
absorption occurs in a predictable and reliable manner thereby
providing further safety reassurance and underlining the potency
and versatility of Futura's DermaSys(R) transdermal technology.
Adverse events were also monitored during this phase of the
study and all four doses were well tolerated. In particular, the
level of headache (the main side effect normally seen) between each
different MED2002 dose and Nitrostat(R) was broadly similar, mostly
being mild and self-limiting.
The remaining part of the PK study is analysing the residual
amounts of MED2002 left on the penis five minutes after application
to evaluate the risk of transference of the active ingredient from
the male to the female sexual partner. The results from this part
of the study, along with the full results of the safety data, are
expected within the next month.
We have also recently received written endorsement from the US
Food and Drug Administration of the adaptive design of our two
Phase III trials for MED2002; the design has already been reviewed
by the UK's Medicines and Healthcare products Regulatory Agency and
the Medicines Evaluation Board in the Netherlands.
Our current plan is for the first patient in the first Phase III
trial to be dosed early in Q3 this year, though the timing could be
influenced by the signing of a commercial out-licensing agreement.
As previously mentioned, we believe that a commercial out-licensing
agreement will be announced in the first half of this year.
Awareness of MED2002, and interest in its potential, has grown
considerably in the medical community. Market research carried out
by a leading healthcare strategy firm, Cello Health Consulting,
indicated that more than 60 per cent of physicians in the US
consider that MED2002 is an improvement over current ED therapies.
The research also revealed that at least 10 per cent of ED patients
were contra-indicated to PDE5 inhibitors (such as Viagra(R) or
Cialis(R) ) because of their existing nitrate medication, a larger
percentage than the 7.5 per cent historically stated by the Company
based on previously conducted research. The online survey was based
on interviews with a total of 200 doctors in the US, Germany and
France.
As previously mentioned, the publication of our Phase II
clinical data in the Journal of Sexual Medicine underlines the
scientific and medical interest in MED2002; the article can be
viewed at this link:
http://www.jsm.jsexmed.org/article/S1743-6095(17)31852-0/fulltext.
The publication of this data forms part of our strategy to increase
the awareness of MED2002 in the medical and pharmaceutical
community and attracted significant interest with widespread
coverage in the mainstream press and features in the medical and
pharmaceutical media, highlighting the level of potential media
interest in a future launch of MED2002.
MED2002, as a topically applied gel with a very rapid speed of
onset, has the potential to be a significant product with combined
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's patent protection runs until August 2028 in the USA
and August 2025 in Europe. An additional patent filing announced in
2017 could extend patent protection through to 2038. As an
innovator product filed under Article 8(3) of 2001/83/EC, MED2002
will also benefit from 10 years European regulatory data and market
exclusivity.
Note 1: 15 Key markets, IMS Health Data (2016) Manufacturers'
Selling Price
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 is protected in the world's most important
markets by the filing and granting of key core patents.
CSD500 benefits from a total of seven licensing agreements,
covering more than 27 countries worldwide. The most recent
agreement was signed in March last year, when F Lima SA gained
exclusive rights to market CSD500 in Portugal.
The planned commercialisation of the product in North America
and certain European countries was impacted by the decision by
Church & Dwight to return licensing rights to those countries
as announced in August 2017. Whilst immensely frustrating, it was
reassuring that Church & Dwight had confirmed they had no
concerns around clinical and safety risks and the decision was the
result of a change in strategic direction at its business. We
continue in commercial discussions on out-licensing CSD500 in a
number of countries including those that formed part of the Church
& Dwight agreement. As we have discounted making an online
launch by ourselves, we are exploring a number of potential
commercial approaches, including jointly licensing MED2002 and
CSD500 in some countries.
CSD500 was launched in Saudi Arabia in the first half of 2017 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 Manex brand name
and its promotion is based on direct retail marketing.
We have been pleased with the continued safety data and positive
feedback and are encouraged by the low level of customer complaints
from more than 600,000 CSD500 condoms which have been supplied to
date to the MENA region and Benelux test market. A further order
has been placed and is currently in production.
Our two 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. Last year TTK received
regulatory approval from the relevant EU Notified Body to
manufacture an extended shelf life product and we continue to work
closely with regulators to gain approval for an extended shelf life
product for our European manufacturer. We remain hopeful of
approval by the end of H1 2018 from the same EU Notified Body for
an extended shelf life product for our European based manufacturer,
which will be based on two years', real time data.
As highlighted in our previous Interim Report, the regulatory
process in Europe has been slowed by the changing structure of EU
regulatory bodies. We continue to work closely with regulators to
overcome these challenges and to prioritise certain of our
submissions and to enable the launch of CSD500 in a number of
countries during 2018 and beyond.
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 and increased skin permeation offers
potential benefits in pain management including: improved onset of
action, duration and degree of pain relief.
Futura has previously demonstrated statistically significant
results over placebo from its two non-steroidal anti-inflammatory
drug ("NSAID") programmes, TPR100 (2% diclofenac gel) and TIB200
(10% ibuprofen gel), in a clinical study.
The UK regulatory submission of TPR100, our diclofenac gel for
topical pain relief, is close to completion with filing expected in
Q2 of this year by Thornton & Ross, a UK subsidiary of STADA.
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 are also in discussions with several potential distribution
partners for further licensing deals for TPR100 in countries
outside of the UK. As previously stated, we do not intend to
conduct any further clinical work, required primarily for the US
market, 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) .
Note 3: 2015 IMS Health estimate
People
At the year end, Futura had 14 employees, (excluding
Non-Executive Directors), (2016: 12), with the increase reflecting
the strengthening of our in-house regulatory function.
Post the period-end, we were delighted to welcome Angela
Hildreth to the Company as Finance Director, Chief Operating
Officer and Company Secretary as announced on 20 February 2018. Her
appointment followed the decision by Derek Martin, who had served
as Finance Director for almost 10 years, to resign from the
Company. We would again like to thank Derek for his contribution to
the development of the Company and wish him well.
Outlook
2018 has started well particularly given the progress of the
Phase III clinical programme of our breakthrough erectile
dysfunction gel, MED2002. The positive interim data announced
yesterday from the pharmacokinetic study indicates that we will be
able to include at least two higher-strength doses of MED2002 in
our Phase III clinical studies along with the dose used in our
earlier Phase II study thereby bringing the potential for improved
efficacy. Commercial discussions, especially with MED2002, are
advancing well, further CSD500 launches in 2018 are planned and we
therefore look forward to the year ahead with confidence.
John Clarke James Barder
Chairman Chief Executive
The financial information set out below does not constitute the
Company's full statutory accounts for the year ended 31 December
2017 (or year ended 31 December 2016) but it is derived from those
accounts that have been audited. Statutory accounts for 2016 have
been delivered to the Registrar of Companies and those for 2017
will be delivered after the forthcoming Annual General Meeting. The
independent auditors have reported on those accounts; their report
was unqualified, did not include an emphasis of matter statement
and did not contain any statements under section 498 of the
Companies Act 2006.
Group Statement of Comprehensive Income
For the year ended 31 December 2017
Year ended Year ended
31 December 31 December
2017 2016
Notes GBP GBP
Revenue 1.5 362,727 170,362
Research and development costs (4,100,453) (3,509,680)
Administrative costs (1,118,218) (1,214,755)
Operating loss 4 (4,855,944) (4,554,073)
Finance income 7 19,316 14,714
Loss before tax (4,836,628) (4,539,359)
Taxation 8 936,344 842,246
Loss for the year being total
comprehensive loss attributable
to owners of the parent company (3,900,284) (3,697,113)
--------------------------------- ----- ---------------- ----------------
Basic and diluted loss per 9 (3.23 pence) (3.65 pence)
share (pence)
Group Statement of Changes in Equity
For the year ended 31 December 2017
Share Share Merger Retained Total
Capital Premium Reserve Losses Equity
Notes GBP GBP GBP GBP GBP
At 1 January
2016 198,185 33,053,345 1,152,165 (29,617,464) 4,786,231
-------------- ----- ------------------ ---------------------- ----------------- -------------------- -------------------
Total
comprehensive
loss for the
year - - - (3,697,113) (3,697,113)
Share-based
payment 17 - - - 54,405 54,405
Shares issued
during the
year 16 42,105 11,957,895 - - 12,000,000
Cost of share
issue - (559,495) - - (559,495)
At 31 December
2016 240,290 44,451,745 1,152,165 (33,260,172) 12,584,028
-------------- ----- ------------------ ---------------------- ----------------- -------------------- -------------------
Total
comprehensive
loss for the
year - - - (3,900,284) (3,900,284)
Share-based
payment 17 - - - 201,261 201,261
Shares issued
during the
year 16 1,102 219,651 - - 220,753
At 31 December
2017 241,392 44,671,396 1,152,165 (36,959,195) 9,105,758
-------------- ----- ------------------ ---------------------- ----------------- -------------------- -------------------
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 all other net gains and losses not
recognised elsewhere.
Group Statement of Financial
Position
For the year ended 31 December
2017
As at As at
31 December 31 December
2017 2016
Notes GBP GBP
Assets
Non-current assets
Plant and equipment 10 63,517 21,351
Total non-current assets 63,517 21,351
---------------------------------- ----- ---------------- ----------------
Current assets
Inventories 11 70,413 83,641
Trade and other receivables 13 181,076 138,989
Taxation 8 927,247 842,246
Cash and cash equivalents 14 8,362,646 12,352,978
---------------------------------- ----- ---------------- ----------------
Total current assets 9,541,382 13,417,854
---------------------------------- ----- ---------------- ----------------
Liabilities
Current liabilities
Trade and other payables 15 (499,141) (855,177)
---------------------------------- ----- ---------------- ----------------
Total liabilities (499,141) (855,177)
---------------------------------- ----- ---------------- ----------------
Total net assets 9,105,758 12,584,028
---------------------------------- ----- ---------------- ----------------
Capital and reserves attributable
to
owners of the parent company
Share capital 16 241,392 240,290
Share premium 44,671,396 44,451,745
Merger reserve 1,152,165 1,152,165
Retained losses (36,959,195) (33,260,172)
---------------------------------- ----- ---------------- ----------------
Total equity 9,105,758 12,584,028
---------------------------------- ----- ---------------- ----------------
Group Statement of Cash Flows
For the year ended 31 December 2017
Notes Year ended Year ended
31 December 31 December
2017 2016
GBP GBP
Cash flows from operating activities
Loss before tax (4,836,628) (4,539,359)
Adjustments for:
Depreciation 10 13,428 6,247
Finance income 7 (19,316) (14,714)
Share-based payment charge 17 201,261 54,405
---------------------------------------- ------ ------------------- --------------------
Cash flows from operating activities
before changes in working capital (4,641,255) (4,493,421)
---------------------------------------- ------ ------------------- --------------------
Decrease in inventories 11 13,228 80,126
(Increase) / decrease in trade and
other receivables (42,087) 16,981
(Decrease) / increase in trade and
other payables 15 (356,036) 101,284
---------------------------------------- ------ ------------------- --------------------
Cash used in operations (5,026,150) (4,295,030)
---------------------------------------- ------ ------------------- --------------------
Income tax received 851,343 997,036
---------------------------------------- ------ ------------------- --------------------
Net cash used in operating activities (4,174,807) (3,297,994)
---------------------------------------- ------ ------------------- --------------------
Cash flows from investing activities
Purchase of plant and equipment 10 (55,594) (7,483)
Interest received 19,316 29,656
Cash (used in) / generated by investing
activities (36,278) 22,173
---------------------------------------- ------ ------------------- --------------------
Cash flows from financing activities
Issue of ordinary shares 16 220,753 12,000,000
Expenses paid in connection with
share issue - (559,495)
Cash generated by financing activities 220,753 11,440,505
---------------------------------------- ------ ------------------- --------------------
(Decrease) / increase in cash and
cash equivalents (3,990,332) 8,164,684
Cash and cash equivalents at beginning
of year 12,352,978 4,188,294
---------------------------------------- ------ ------------------- --------------------
Cash and cash equivalents at end
of year 14 8,362,646 12,352,978
---------------------------------------- ------ ------------------- --------------------
Notes to the Group Financial Information
For the year ended 31 December 2017
1. Accounting policies
1.1 Basis of preparation
The consolidated financial statements have been prepared and
approved by the Directors in accordance with International
Financial Reporting Standards ("IFRSs") as adopted by the European
Union.
The accounting policies set out below have been applied to all
periods presented in these consolidated financial statements and
are in accordance with IFRSs as adopted by the European Union and
International Financial Reporting Interpretations Committee
("IFRIC") interpretations that were applicable for the year ended
31 December 2017.
1.2 Going concern
The Group had an operating loss of GBP4.86 million for the 2017
financial year (2016: GBP4.55 million), but had a positive net
asset value of GBP9.11 million at 31 December 2017 (31 December
2016: GBP12.58 million). The cash component of this at 31 December
2017 was GBP8.36m (31 December 2016: GBP12.35 million) and 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 and commercial activities of the Group, including profit
forecasts, cash forecasts, sensitivity analysis scenario planning
and funding requirements. The Directors continue to manage the
working capital of the Group to ensure it is well positioned to
fund its future development programme and also to take advantage of
appropriate commercial opportunities as and when they arise in the
near and medium term.
Based on this assessment, the consolidated financial statements
have 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 standards and interpretations that are issued, but not yet
effective, up to the date of issuance of the Group's financial
statements are disclosed below. The Group intends to adopt these
standards, if applicable, when they become effective.
IFRS 15
Revenue from Contracts with Customers IFRS 15 was issued in May
2014 and establishes a new five-step model that will apply to
revenue arising from contracts with customers. Under IFRS 15
revenue is recognised at an amount that reflects the consideration
to which an entity expects to be entitled in exchange for
transferring goods or services to a customer. The principles in
IFRS 15 provide a more structured approach to measuring and
recognising revenue. The new revenue standard is applicable to all
entities and will supersede all current revenue recognition
requirements under IFRS. Either a full or modified retrospective
application is required for annual periods beginning on or after 1
January 2018 with early adoption permitted. The Group is currently
assessing the impact of IFRS 15 and plans to adopt the new standard
on the required effective date.
IFRS 16
IFRS 16 specifies how an IFRS reporter will recognise, measure,
present and disclose leases. The standard provides a single lessee
accounting model, requiring lessees to recognise assets and
liabilities for all leases unless the lease term is twelve months
or less or the underlying asset has a low value. Lessors continue
to classify leases as operating or finance, with IFRS 16's approach
to lessor accounting substantially unchanged from its predecessor,
IAS 17. IFRS 16 was issued in January 2016 and applies to annual
reporting periods beginning on or after 1 January 2019. The Group
is currently assessing the impact of IFRS 16 and plans to adopt the
new standard on the required effective date.
Other standards
The following standards and interpretations, applicable for
annual periods beginning on or after 1 January 2017, are not
expected to have any impact on the results of the Group or the
presentation of the financial statements:
-- IFRS 9 Financial Instruments
-- IFRS 10 Consolidated Financial Statements - Amendments
regarding the sale or contribution of assets between an investor
and its associate or joint venture and amendments regarding the
application of the consolidation exception
-- IFRS 11 Joint Arrangements - Amendments regarding the
accounting for acquisitions of an interest in a joint operation
-- IFRS 12 Disclosure of Interests in Other Entities -
Amendments regarding the application of the consolidation
exception
-- IFRS 14 Regulatory Deferral Accounts
-- IAS 1 Presentation of Financial Statements - Amendments
resulting from the disclosure initiative
-- IAS 7 Statement of Cash Flows - Amendments resulting from the disclosure initiative
-- IAS 12 Income Taxes - Amendments to recognition of deferred
tax assets for unrealised losses
-- IAS 16 Property, Plant and Equipment - Amendments regarding
the clarification of acceptable methods of depreciation and
amortisation and amendments bringing bearer plants into the scope
of IAS 16
-- IAS 27 Separate Financial Statements (as amended in 2011) -
Amendments reinstating the equity method as an accounting option
for investments in subsidiaries, joint ventures and associates in
an entity's separate financial statements
-- IAS 28 Investments in Associates and Joint Ventures -
Amendments regarding the application of the consolidation
exception
-- IAS 38 Intangible Assets - Amendments regarding the
clarification of acceptable methods of depreciation and
amortisation
-- IAS 41 Agriculture - Amendments bringing bearer plants into the scope of IAS 16
-- Amendments resulting from September 2014 Annual Improvements to IFRSs:
o IFRS 2 Classification and Measurement of Share-based Payment
Transactions
o IFRS 5 Non-current Assets Held for Sale and Discontinued
Operations
o IFRS 7 Financial Instruments: Disclosures
o IFRIC Interpretation 22 Foreign Currency Transactions and
Advance Consideration
o IAS 19 Employee Benefits
o IAS 34 Interim Financial Reporting
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 consolidated financial statements
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
consolidated financial statements.
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.
(iii) Revenue is recognised in the consolidated statement of
profit and loss and other comprehensive income when the risks and
rewards associated with the ownership of goods are transferred to
the customer. This is deemed to occur when the customer collects
and loads the product, resulting in the legal transfer of
title.
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 Consolidated 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, including patents and trademarks,
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 Consolidated 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 yet met for CSD500 prior to the
extended shelf life product being commercially launched in at least
one major market and further testing and development is required
before the capitalisation criteria are met.
Development expenditure, not satisfying the above criteria, and
expenditure on the research phase of internal projects are included
in R&D costs recognised in the Consolidated Statement of
Comprehensive Income as incurred.
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 Consolidated 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 their estimated
useful lives.
The assets' residual values and useful lives are determined by
the Directors and reviewed and adjusted, if appropriate, at each
Consolidated 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 Consolidated 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
Consolidated Statement of Comprehensive Income.
1.10 Inventories
Inventories are consumable materials to be used in development
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 Consolidated
Statement of Comprehensive Income in respect of obsolete 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 all 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 they vest, the change in the fair value of the
share options, measured immediately before and after the
modification, is also 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 remaining 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 as detailed in note 17 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. Financial risk management
2.1 Financial risk factors
The Group's activities expose it to a variety of financial
risks: market risk (including foreign exchange rate risk, cash flow
interest rate risk and fair value interest rate risk); credit risk
and liquidity risk.
It is Group policy not to enter into speculative positions using
complex financial instruments. The Group's primary treasury
objective is to minimise exposure to potential capital losses
whilst at the same time securing market rates of interest on Group
cash deposits using money market funds. Cash balances used to
settle the liabilities from operating activities are maintained in
current accounts.
(i) Market risk
Foreign exchange rate risk
The Group primarily enters into supplier contracts which are to
be settled in sterling. However, some contracts involve other
currencies including the US dollar and the euro. Where supplier
contracts of more than GBP100,000 total value are to be settled in
foreign currencies consideration is given to settling the sums to
be paid through conversion of sterling deposits to the appropriate
foreign currency holdings at the outset of the contract to minimise
the risk of adverse currency fluctuations.
For contracts with smaller values the foreign exchange rate risk
is not considered sufficient to require the establishment of
foreign currency accounts unless specific circumstances are
identified which warrant this. At 31 December 2017 the Group had
trade payables denominated in a foreign currency totalling
GBP11,582 (31 December 2016: GBPnil).
Cash flow interest rate risk and fair value interest rate
risk
The Group's interest rate risk arises from short-term money
market deposits.
(ii) Credit risk
Credit risk arises from cash and cash equivalents and money
market deposits as well as credit exposure in relation to
outstanding receivables.
(iii) Liquidity risk
Liquidity risk arises from the Group's management of working
capital. It is the risk that the Group will encounter difficulty in
meeting its financial obligations as they fall due. Prudent
liquidity risk management involves maintaining sufficient cash and
cash equivalents and the monitoring of rolling forecasts of the
Group's liquidity reserve on the basis of expected cash flow. The
Group had trade and other payables at the Consolidated Statement of
Financial Position date of GBP499,141 (2016: GBP855,177) which fall
due within one year.
2.2 Capital risk management
The Group's objectives when managing capital are to safeguard
the Group's ability to continue as a going concern, in order to
provide returns for equity holders of the Company and benefits for
other stakeholders, and to maintain an optimal capital structure to
minimise the cost of capital.
3. 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:
Year ended Year ended
31 December 31 December
2017 2016
GBP GBP
Middle East / ROW 12,727 118,192
United States of America - 35,473
Europe 350,000 16,697
362,727 170,362
------------------------- ------------------------ ------------------------
4. Operating loss
Year ended Year ended
31 December 31 December
2017 2016
Operating loss is stated after GBP GBP
charging:
Depreciation of plant and equipment
(note 10) 13,428 6,247
Inventories consumed in R&D 22,978 122,565
Wages and salaries (note 5) 2,154,137 1,662,299
Operating lease costs: property 116,076 76,394
Loss on foreign exchange 9,701 4,823
The fees of the Group's auditor KPMG LLP for services provided
are analysed below:
Year ended Year ended
31 December 31 December
2017 2016
Audit services GBP GBP
Parent company 26,000 26,000
Subsidiaries 7,500 7,500
Tax services
Parent company 2,500 1,000
Subsidiaries 1,000 10,000
Total fees 37,000 44,500
--------------- ------------- -------------
5. Wages and salaries
The average monthly number of persons (including all Directors)
employed by the Group during the year was 14 (by category: R&D
9, administration 5), (2016:12, by category: R&D 6,
administration 6) and their aggregate emoluments were:
Year ended Year ended
31 December 31 December
2017 2016
GBP GBP
Wages and salaries 1,582,108 1,288,330
Social security costs 200,623 161,481
Other pension and insurance
benefits costs 168,131 156,656
Total cash-settled emoluments 1,950,862 1,606,467
Accrued holiday pay 2,014 6,224
Share-based payment remuneration
charge 201,261 49,608
--------------------------------- ----------------------- ----------------------
Total emoluments 2,154,137 1,662,299
--------------------------------- ----------------------- ----------------------
All employees of the Group are employed by Futura Medical
Developments Limited.
6. Directors' emoluments
Year ended Year ended
31 December 31 December
2017 2016
GBP GBP
Aggregate emoluments 698,837 628,609
Employer pension contributions 21,875 53,265
Subtotal per remuneration report 720,712 681,874
Share-based payment remuneration
charge 97,967 18,833
Employer's national insurance
charge 96,038 86,284
Total emoluments 914,717 786,991
--------------------------------- -------------------- ---------------------
In 2017 two Directors exercised share options under the Group
share option schemes and realised a combined gain of GBP28,768
(2016: nil). In respect of the highest paid Director the realised
gain was GBP14,263 (2016: GBPnil).
In 2017 one Director (2016: one Director) participated in a
private money purchase defined contribution pension scheme.
Emoluments for individual Directors are disclosed within the
Remuneration Report.
Emoluments on the previous page include the following amounts in
respect of the highest paid Director:
Year ended Year ended
31 December 31 December
2017 2016
GBP GBP
Aggregate emoluments 235,002 306,566
Employer pension contributions - -
Subtotal per remuneration report 235,002 306,566
Share-based payment remuneration
charge 40,608 11,864
Employer's national insurance
charge 32,176 41,998
Total emoluments 307,786 360,428
--------------------------------- -------------------- ----------------------
7. Finance income
Interest receivable in 2017 on treasury funds was GBP19,316
(2016: GBP14,714).
8. Taxation
Current tax
Year ended Year ended
31 December 31 December
2017 2016
GBP GBP
UK corporation tax credit reported
in the
Consolidated Statement of Comprehensive
Income 936,344 842,246
----------------------------------------- ------------------------ ------------------------
The tax assessed for the year is different from the standard
rate of corporation tax in the UK.
The differences are explained Year ended Year ended
below: 31 December 31 December
2017 2016
GBP GBP
Loss on ordinary activities
before tax 4,836,628 4,539,359
----------------------------------------- ------------------------- -------------------------
Loss on ordinary activities
at an average standard rate
of corporation tax in the UK
of 19.25% (2016: 20%) 931,051 907,872
Expenses not deductible for
tax purposes (249) (125)
Unrecognised deferred tax (30,523) (12,154)
Unutilised tax losses (381,446) (396,701)
Share scheme deduction 11,235 -
Additional relief attaching
to R&D tax credit claims 381,880 343,354
----------------------------------------- ------------------------- -------------------------
UK corporation tax credit 911,948 842,246
R&D expenditure credit re 2016 9,098 -
R&D expenditure credit re 2017 15,298 -
----------------------------------------- ------------------------- -------------------------
UK corporation tax credit reported
in the
Consolidated Statement of Comprehensive
Income 936,344 842,246
----------------------------------------- ------------------------- -------------------------
The Group has tax losses of GBP24,300,530 (2016: GBP22,332,102)
available for offset against future taxable profits.
Deferred tax
Deferred tax assets amounting to GBP4,133,675 (2016:
GBP3,859,456) have not been recognised due to it not being probable
that taxable profits will be available, against which these
deductible temporary differences can be utilised. Reductions in the
UK corporation tax rate from 20% to 19% (effective from 1 April
2017) and to 18% (effective from 1 April 2020) were substantively
enacted on 26 October 2015, and an additional reduction to 17%
(effective from 1 April 2020) was substantively enacted on 6
September 2016. The unrecognised deferred tax asset at 31 December
2017 has been calculated assuming a prevailing tax rate when the
timing differences reverse of 17% (2016: 17%) and comprises:
Year ended Year ended
31 December 31 December
2017 2016
GBP GBP
Depreciation differential versus
capital allowances (348) 6,820
Tax relief on unexercised share
options - 53,156
Other short-term timing differences 2,932 3,022
Unutilised tax losses 4,131,091 3,796,458
------------------------------------ ------------------------ ------------------------
4,133,675 3,859,456
------------------------------------ ------------------------ ------------------------
9. Loss per share (pence)
The calculation of the loss per share is based on a loss of
GBP3,900,284 (2016: loss of GBP3,697,113) and on a weighted average
number of shares in issue of 120,631,242 (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, disclosed in note 17, or the issue
of shares under the long-term incentive plan, would have the effect
of reducing the loss per share and is therefore anti-dilutive under
the terms of IAS 33 'Earnings per Share'.
10. Plant and equipment
Computer Furniture
Equipment and Fittings Total
Cost GBP GBP GBP
At 1 January 2017 49,694 60,787 110,481
Additions 51,345 4,249 55,594
Disposals (9,796) (1,751) (11,547)
------------------------- ----------- -------------- ----------
At 31 December 2017 91,243 63,285 154,528
------------------------- ----------- -------------- ----------
Depreciation
At 1 January 2017 35,970 53,160 89,130
Eliminated on disposals (9,796) (1,751) (11,547)
Charge for year 11,741 1,687 13,428
------------------------- ----------- -------------- ----------
At 31 December 2017 37,915 53,096 91,011
------------------------- ----------- -------------- ----------
Net book value
At 31 December 2017 53,328 10,189 63,517
------------------------- ----------- -------------- ----------
At 31 December 2016 13,724 7,627 21,351
------------------------- ----------- -------------- ----------
Computer Furniture
Equipment and Fittings Total
Cost GBP GBP GBP
At 1 January 2016 44,754 58,244 102,998
Additions 4,940 2,543 7,483
At 31 December 2016 49,694 60,787 110,481
--------------------- ------------------------ ----------------- -----------------
Depreciation
At 1 January 2016 30,844 52,039 82,883
Charge for year 5,126 1,121 6,247
--------------------- ------------------------ ----------------- -----------------
At 31 December 2016 35,970 53,160 89,130
--------------------- ------------------------ ----------------- -----------------
Net book value
At 31 December 2016 13,724 7,627 21,351
--------------------- ------------------------ ----------------- -----------------
At 31 December 2015 13,910 6,205 20,115
--------------------- ------------------------ ----------------- -----------------
All fixed assets of the Group are held in Futura Medical
Developments Limited.
11. Inventories
31 December 31 December
2017 2016
GBP GBP
Consumable materials used for development 70,413 83,641
------------------------------------------ ---------------- ----------------
12. Financial instruments by category
The accounting policies for financial instruments have been
applied to the line items below:
Assets as per Consolidated Statement 31 December 31 December
of Financial Position 2017 2016
Loans and receivables GBP GBP
Trade and other receivables (note
13) 39,520 34,986
Cash and cash equivalents (note
14) 8,362,646 12,352,978
Total loans and receivables 8,402,166 12,387,964
------------------------------------- ----------------------- -----------------------
31 December 31 December
2017 2016
Liabilities as per Consolidated GBP GBP
Statement of Financial Position
Trade and other payables (note
15) 131,430 286,135
Total financial liabilities 131,430 286,135
--------------------------------- ----------------------- -----------------------
13. Trade and other receivables
31 December 31 December
2017 2016
Amounts receivable within one year: GBP GBP
Trade receivables 6,299 20,364
Other receivables 33,221 14,622
------------------------------------ ---------------- ----------------
Financial assets (note 12) 39,520 34,986
Prepayments and accrued income 141,556 104,003
181,076 138,989
------------------------------------ ---------------- ----------------
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 Consolidated Statement of Financial
Position date is the fair value of each class of receivable.
14. Cash and cash equivalents
31 December 31 December
2017 2016
GBP GBP
Cash at bank and in hand 168,825 147,200
Sterling short-term money market
funds 8,193,821 12,205,778
8,362,646 12,352,978
--------------------------------- ---------------- ----------------
15. Trade and other payables
31 December 31 December
2017 2016
GBP GBP
Trade payables 131,430 286,135
--------------------------------- ---------------- ----------------
Financial liabilities (note 12) 131,430 286,135
Social security and other taxes 131,771 42,923
Accrued expenses and deferred
income 235,940 526,119
--------------------------------- ---------------- ----------------
499,141 855,177
--------------------------------- ---------------- ----------------
16. Share capital
31 December 31 December 31 December 31 December
Authorised 2017 2016 2017 2016
Number Number GBP GBP
Ordinary shares
of 0.2 pence each 500,000,000 500,000,000 1,000,000 1,000,000
------------------- ----------- ----------- ---------------- ------------
Allotted, called 31 December 31 December 31 December 31 December
up and fully paid 2017 2016 2017 2016
Number Number GBP GBP
Ordinary shares
of 0.2 pence each 120,696,002 120,144,950 241,392 240,290
------------------- ----------- ----------- ---------------- ----------------
The number of issued ordinary shares as at 1 January 2016 was
99,092,318. During the year ended 31 December 2016, the Company
issued shares of 0.2 pence each as follows:
Gross Shares
Month Reason for issue Consideration Issued
GBP Number
November Share placing at 57.00 pence
2016 per share 12,000,000 21,052,632
--------- ----------------------------- -------------- ----------
The number of issued ordinary shares as at 1 January 2017 was
120,144,950. During the year ended 31 December 2017, the Company
issued shares of 0.2 pence each as follows:
Gross Shares
Month Reason for issue Consideration Issued
GBP Number
January Non-Executive Director award
2017 at 28.45 pence per share 28,669 100,770
January Option exercise at 40.50
2017 pence per share 155,100 382,962
Option exercise at 51.75
May 2017 pence per share 15,525 30,000
December Non-Executive Director award
2017 at 57.50 pence per share 21,459 37,320
--------- ------------------------------ -------------- -----------
17. Share options
At 31 December 2017, the number of ordinary shares of 0.2 pence
each subject to share options granted under the Company's Approved
and Unapproved Share Option Schemes were:
Exercise
Price At 1 At 31
per January Options Options Options December
Share 2017 Exercised Lapsed Granted 2017
Exercise Period Pence Number Number Number Number Number
1 August 2012 - 31
July 2017 40.50 482,962 (382,962) (100,000) - -
1 October 2013 -
30 September 2018 56.50 627,500 - - - 627,500
1 October 2014 -
30 September 2019 61.50 660,000 - - - 660,000
1 October 2015 -
30 September 2020 71.50 750,000 - - - 750,000
1 October 2016 -
30 September 2021 51.75 740,000 (30,000) - - 710,000
1 October 2017 -
30 September 2022 30.00 1,060,000 - - - 1,060,000
1 October 2018 -
30 September 2023 57.50 - - - 1,260,000 1,260,000
1 October 2019 -
30 September 2024 30.50 482,962 - - 1,440,000 1,440,000
------------------- -------- ----------- -------------- -------------- -------------- -----------
4,320,462 (412,962) (100,000) 2,700,000 6,507,500
------------------- -------- ----------- -------------- -------------- -------------- -----------
On 13 January 2017 share options over 1,260,000 new ordinary
shares were granted to employees in respect of 2016 (including
Executive Directors) at a price of 57.50p. The exercise period for
these options is 1 October 2018 to 30 September 2023.
On 12 September 2017 share options over 1,440,000 new ordinary
shares were granted to employees (including Executive Directors) at
a price of 30.50p. The exercise period for these options is 1
October 2019 to 30 September 2024.
The share options outstanding at 31 December 2017 represented
5.39% of the issued share capital as at that date (2016: 3.60%) and
would generate additional funds of GBP3,145,813 (2016:
GBP2,193,237) if fully exercised. The weighted average remaining
life of the share options outstanding at 31 December 2017 was 52
months (2016: 56 months) with a weighted average remaining exercise
price of 48.34 pence (2016: 50.76 pence).
The share options exercisable at 31 December 2017 totalled
3,707,500 (2016: 3,260,462) with an average exercise price of 51.53
pence (2016: 57.51 pence) and would have generated additional funds
of GBP1,910,613 (2016: GBP1,875,237) if fully exercised.
The Group's share option scheme rules apply to 6,027,500 of the
share options outstanding at 31 December 2017 (31 December 2016:
3,740,462) and include a rule regarding forfeiture of unexercised
share options upon the cessation of employment (except in specific
circumstances).
There were no market vesting conditions within the terms of the
grant of the share options.
The Black-Scholes formula is the option pricing model applied to
the grants of all share options made in respect of calculating the
fair value of the share options.
Inputs to share option pricing 31 December 31 December 31 December
model 2017 2017 2016
Grant date 12 September 13 January -
Number of shares under option 1,440,000 1,260,000 -
30.50 57.50
Share price as at date of grant pence pence -
30.50 57.50 -
Option exercise price pence pence
Expected life of options: based -
on previous exercise history 3 years 3 years
Expected volatility: based on
50 day median fluctuations over
3 years 67.82% 65.74% -
Dividend yield: no dividends assumed 0% 0% -
Risk-free rate: yield on 3 year 0.31% 0.30% -
treasury stock as at date of grant p.a. p.a.
-------------------------------------------- ------------------ ------------------ --------------------
Outputs generated from share option 31 December 31 December 31 December
pricing model 2017 2017 2016
11.55 20.37p -
Fair value per share under option p
Total expected charge over the GBP166,320 GBP256,662 -
vesting period
----------------------------------- --------------- ---------------- --------------------
Recognised in Consolidated Statement 31 December 31 December 31 December
of Comprehensive Income 2017 2017 2016
GBP GBP GBP
The share-based remuneration charge
comprises:
Share-based payments - employees 24,648 144,731 49,608
Share-based payments - consultants - - 4,797
------------------------------------- ---------------------- ---------------------- ---------------------
Share-based payments 24,648 144,731 54,405
------------------------------------- ---------------------- ---------------------- ---------------------
18. Pension costs
The pension charge represents contributions payable by the Group
to independently administered funds which during the year ended 31
December 2017 amounted to GBP141,992 (2016: GBP131,181). Pension
contributions payable in arrears at 31 December 2017, included in
accrued expenses at the relevant Consolidated Statement of
Financial Position date, totalled GBP4,300 (2016: GBP6,846).
19. Commitments
At 31 December 2017 the Group had operating lease commitments in
respect of property leases cancellable on one month's notice of
GBP9,767 (2016: GBP9,575).
20. Related party transactions
Related parties, as defined by IAS 24 'Related Party
Disclosures', are the wholly owned subsidiary companies, Futura
Medical Developments Limited, 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.
Key management compensation
The Directors represent the key management personnel. Details of
their compensation and share options are given in note 6 and within
the Remuneration Report.
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR ZMGMFFFZGRZZ
(END) Dow Jones Newswires
March 14, 2018 03:01 ET (07:01 GMT)
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