Portfolio news 2012
Evocutis plc - Interim results for the six months ended 31
January 2012
22 Mar 2012
Evocutis plc (AIM: EVO), the company focussed on advanced
laboratory and clinical evaluations of skincare products
for the health and cosmetic markets, today
announces its unaudited interim results for the six months
ended 31 January 2012.
Financial Highlights
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Increased revenue to £344,000 (H1 2011: £161,000)
reflecting improving performance across the Group
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Adjusted operating loss* reduced to £346,000 (H1
2011: loss of £542,000)
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Basic loss per share reduced to 0.21p (H1 2011: loss
per share of 0.47p)
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Cash balance of £1,849,000 at 31 January 2012 (H1
2011: £1,068,000)
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Operational Highlights
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Significant revenues are being generated from our key
service areas: LabSkinTM (our skin equivalent model),
clinical operations and microbiology services
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Interest in our technology platforms (particularly
LabSkinTM) and services provided continues to
increase as business development activity expands
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Further evolution of the technology offerings
continues to drive revenue opportunities
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Completed integration of Leeds Skin into the Group
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Change of name to Evocutis plc from Syntopix Group
plc in October 2011
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* Operating loss before share-based payment charge,
acquisition costs, depreciation and amortisation
Dr Stephen Jones, Chief Executive Officer, commented:
"The significant increase in revenue over the first
half of the year reflects the progress we are now starting
to make in commercialising our new and existing technology
platforms. As previously announced, we have continued
to invest in the development and validation of these
platforms and we fully expect to realise the commercial
benefit of these initiatives throughout the next 12 months.
This is a very exciting time for Evocutis as the
Group continues to attract a very healthy interest from the
skin care industry for its unique technology
offerings."
For further information, please contact:
Media enquiries:
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Abchurch Communications
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Sarah Hollins / Adam Michael / Jamie Hooper
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Tel: +44 (0) 20 7398 7719
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The interim results will be available electronically on the
Group's website: www.evocutis.com.
Notes to editors
About Evocutis plc
With a rich portfolio of new product opportunities,
Evocutis offers antimicrobial and dermatological expertise
to the cosmetic, consumer healthcare and pharmaceutical
industries. Being uniquely able to combine research
for laboratory testing, advanced skin models and clinical
testing, Evocutis offers a complete service for the
development of skin care products and ingredients. Through
research and testing we enable our clients to advance the
discovery of skin care products that actually work.
Offering high quality contract research services, Evocutis
specialises in Human Skin Microbiology, tissue culture
systems and Human Volunteer and Clinical Dermatology
Research. Unique characteristics of its colonised full
thickness model of human skin (LabSkin™) allow rapid, cost
effective screening of, for example, anti-ageing,
anti-inflammatory and antimicrobial ingredients and
products for use on skin. Additionally, the clinical, human
volunteer testing facility that is housed on-site provides
rapid, bespoke evaluation of dermatological products.
When it comes to advanced laboratory and clinical
evaluations of skincare products for the health
and cosmetic markets, the Evocutis focus is
simple: intelligent and specialised R&D input.
For further information, please see www.evocutis.com
About LabSkin™
LabSkin™ is an animal-replacement technology, that emulates
living skin tissue and is a high value research and product
testing tool for the cosmetic and healthcare industries. It
is a full thickness human skin model, comprised of both
dermal and epidermal layers, and is produced exclusively
and reproducibly on site at Evocutis from primary human
cells (keratinocytes & fibroblasts). The model exhibits a
fully differentiated epidermal layer, which provides a
completely dry surface for tailored testing requirements.
LabSkin™ is highly versatile, and alongside its
antimicrobial model, Evocutis is developing models to test
anti-ageing and moisturising products. The antimicrobial
LabSkin™ model allows testing using pathogenic
microorganisms which would not be possible in human
clinical studies. In addition, methods have been developed
to allow LabSkin™ to be inoculated with skin washings taken
directly from human skin, thus providing a step-change in
the quality of data possible from a laboratory model.
By benchmarking activity against best-in-class products,
the activity of new ingredients and formulations can be
assessed for several antimicrobial endpoints, including
immediate kill, rate of kill and residual activity.
Recent research indicates that our natural microflora is an
integral part of our skin and makes a significant
contribution to skin health. LabSkin™ provides a
unique living skin surface which is validated for microbial
applications and can simultaneously provide information on
irritation, penetration, barrier function and skin
structure.
Chairman's and Chief Executive Officer's Report
Introduction
We are pleased to report the interim results for the six
months ended 31 January 2012. This is the first full
reporting period when the benefit of the acquisition of
Leeds Skin Centre for Applied Research Limited can be seen
in the Group's results. During this period, we
have generated significantly increased revenues, primarily
from the delivery of high quality contract research
services. These revenues have been generated using our
proprietary LabSkinTM technology (a full thickness human
skin model produced exclusively by Evocutis), as well as
from fees associated with clinical and microbiology
dermatology research. Additionally, SYN1113, our lead
compound for the treatment of acne, continues to attract
interest; especially in its patented formulation designed
to enhance speed of penetration and efficacy.
LabSkinTM technology
The ability of LabSkinTM to be colonised with
microorganisms, therefore reflecting true-life conditions
of the skin surface, is attracting significant interest
from many companies, but particularly ones who have
products and brands associated with the treatment of
dandruff, body odour and acne. The Group continues to
develop the utility of this aspect of LabSkinTM and its
application for studying prebiotic product claims which was
announced in November 2011.
Additionally, the LabSkinTM technology was validated for
use in supporting anti-ageing claims, which allows the
customer to benchmark the activity of new ingredients and
products prior to expensive human-use studies, thereby
de-risking the development process.
In the next six months we will aim to establish the
applicability of LabSkinTM in understanding the action and
efficacy of sunblock and skin whitening treatments.
The contacts that Evocutis have made and extensive
discussions held, over the last six months, have confirmed
the uniqueness of the offering and we believe that there
are no commercially available equivalents to several
applications of the LabSkin™ technology.
Laboratory and Clinical Services
The skin microbiology expertise, coupled with the database
of over 3,200 antimicrobial compounds, continue to support
the LabSkinTM and research services which underpin the
Group. We believe that the Group is unique in that it
can offer bespoke clinical services (using human
volunteers) with support from a microbiology department.
Evocutis has conducted several studies of this kind over
the last six months.
The Group continues to invest in the services it can offer
and in January 2012 we announced that a state-of-the-art
histology laboratory is now available to support our
services. This laboratory allows interactive, real-time
experimentation which provides customers with innovative
and valuable data to support their product development.
Commercial agreements
During the period, the Group has continued its ongoing
collaboration work with Sinclair IS Pharma for the
potential commercialisation of a product containing
delmopinol.
SYN1113, our lead anti-acne compound, which has been
formulated in a patent protected formulation, continues to
attract interest and is currently being evaluated by major
cosmetics companies with worldwide brands. We remain
confident that it is a valuable component of the
Group's portfolio, but are disappointed with the rate
of progress of licensing this opportunity. . The
Group believes that further commercial progress can be made
with the synergistic combination of SYN0269 with SYN0693
but a decision to progress with this will be dependent upon
the commercial interest and success of SYN1113.
Income statement
A summary of the Group's results is set out below. This
shows the growth of the Group during the period and the
reduction in the losses being incurred.
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Six months
ended
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Six months
ended
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Year
ended
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|
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31 January
|
31 January
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31 July
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|
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2012
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2011
|
2011
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£'000
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£'000
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£'000
|
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Revenue
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344
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161
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227
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Adjusted operating loss*
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(346)
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(542)
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(1,086)
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Operating loss
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(446)
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(559)
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(1,219)
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Loss for the period
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(373)
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(507)
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(1,079)
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* Operating loss before share-based payment charge,
acquisition costs, depreciation and amortisation
Balance sheet
The accounting period to 31 January 2012 ends with the
Group having net assets of £3,081,000 (H1 2011:
£1,289,000). The Group has no external borrowings and
cash reserves of £1,849,000 (H1 2011: £1,068,000).
Cash
Cash balances have decreased in the period by £467,000 with
the principal elements of the movement being:
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Six months
ended
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Six months
ended
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Year
ended
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|
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31 January
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31 January
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31 July
|
|
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2012
|
2011
|
2011
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£'000
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£'000
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£'000
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Net cash from operations
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(530)
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(668)
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(1,122)
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Net cash used in investing activities
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(30)
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(1)
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(169)
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Issue of share capital
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-
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-
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1,850
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Repayment of short term loans
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-
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-
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(92)
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Tax received (net of tax paid)
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93
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-
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112
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Movement during the period
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(467)
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(669)
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579
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The Group continues to manage its operational expenditure
prudently and plans its research and development programme
to ensure that it continues to have sufficient cash
resources for the foreseeable future.
Taxation
The Group continues to qualify for Research and Development
tax credits and the financial statements contain a debtor
of £47,000 (H1 2011: £160,000) in respect of research
costs.
Principal risks and uncertainties
A detailed explanation of the principal risks and
uncertainties faced by the Group and the steps taken to
manage them is set out in Evocutis plc's 2011 Annual
Report and Accounts. The principal risks and
uncertainties are summarised as follows:
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Risks that the Group will not achieve commercial
success
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Risk that the Group's intellectual property will
not be adequately protected
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Risk that the Group cannot attract or retain key
staff
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There have been no significant changes in the nature of
these risks that will affect the next six months of the
financial year.
Outlook
Even at this early stage of the commercialisation of the
Group's technologies, considerable interest has been
shown by a number of large, multinational cosmetics and
personal care companies. This has reinforced our
confidence in the market opportunity, and the uniqueness of
our offering. The focus for the business is to continue to
accelerate the commercialisation and continue to invest in
the development of the technologies, which should lead to
significant growth in revenues and improvement in
profitability. I look forward to updating shareholders on
our progress at regular intervals.
Thomas
Bannatyne
Dr Stephen Jones
Chairman
Chief Executive Officer
22 March 2012
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