Full Press Release Details
Midatech will host a conference call and live Q&A session today (Tuesday 4 April 2017) at 1400 BST / 0900 EDT for analysts and investors to discuss the Annual Results. Dr Jim Phillips, Chief Executive Officer, and Nick Robbins-Cherry, Chief Financial Officer, will participate. Dial-in details are: UK: +44 1452 555 566, US: +1 86 69 66 94 39, ID: 95480046.
The presentation will be available on Midatech's website shortly before the call, and a recording will be available shortly afterwards.
("Midatech", "Company" or "Group")
Audited financial results for the year ended 31 December 2016
Midatech Pharma (AIM: MTPH; Nasdaq: MTP), the international specialty pharmaceutical company focused on commercialising and developing products in oncology, immunology and other therapeutic areas, today announces its audited financial results for the twelve-month period ended 31 December 2016.
Financial highlights
Operational highlights including post period end highlights
1 Total gross revenues represents the full list price of products shipped to wholesalers and other customers before product returns, discounts, rebates and other incentives based on the sales price and grant revenue.
2 Statutory Revenue represents total gross revenue, excluding grant revenue and after deductions for product returns, discounts, rebates and other incentives.
Commenting on the Annual Results for 2016, Midatech's Chairman, Rolf Stahel, said: "Midatech has made significant progress in 2016 and continued to lay down sound foundations for future growth both across the commercial side of the business and with the exciting pipeline of drugs in development.
"Our operations in the US have the potential to deliver double-digit top-line growth in 2017 and our fully integrated R&D pipeline with two platform technologies continues to progress well with several clinical milestones expected in 2017.
"With the funds raised in November we have continued to invest in the pipeline, manufacturing and commercial platforms, all supporting the development of the Company towards future profitability. We look forward to another successful year of growth in 2017"
For more information, please contact:
Tel: +44 (0)1235 841575
Panmure Gordon (UK) Limited (Nominated Adviser and Broker)
Freddy Crossley / Duncan Monteith
Tel: +44 (0)20 7886 2500
Consilium Strategic Communications (Financial PR)
Mary Jane Elliott / Ivar Milligan / Cameron Standage
Tel: +44 (0)20 3709 5700
Email: midatech@consilium-comms.com
Westwicke Partners (US Investor Relations)
Tel: +1 339 970 2843
Email: chris.brinzey@westwicke.com
About Midatech Pharma PLC
Midatech is an international specialty pharmaceutical company focused on oncology and other therapeutic areas with a US commercial operation marketing four cancer care supportive products, and co-promoting two others. Midatech's strategy is to internally develop oncology products and collaborate with partners in other therapy areas, and to drive growth both organically and through strategic acquisitions. The Company's R&D activities are supported by two breakthrough drug delivery technologies: Q-Sphera for sustained release and our proprietary gold nanoparticles. The Group, listed on AIM: MTPH and Nasdaq: MTP, employs c.110 staff in four countries. For further company information see: www.midatechpharma.com
Forward-Looking Statements
Certain statements in this press release may constitute "forward-looking statements" within the meaning of legislation in the United Kingdom and/or United States, including (without limitation) those regarding the Group's financial position, business strategy, products, plans and objectives of management for future operations, and any statement preceded or followed by, or including, words such as "target", "believe", "expect", "aim", "intend", "will", "may", "anticipate", "would" or "could", or negatives of such words. Any forward-looking statements are based on currently available competitive, financial and economic data together with management's views and assumptions regarding future events and business performance as of the time the statements are made and are subject to risks and uncertainties. We wish to caution you that there are some known and unknown factors that could cause actual results to differ materially from any future results, performance or achievements expressed or implied by such forward-looking statements.
Reference should be made to those documents that Midatech shall file from time to time or announcements that may be made by Midatech in accordance with the London Stock Exchange AIM Rules for Companies ("AIM Rules"), the Disclosure and Transparency Rules ("DTRs") and the rules and regulations promulgated by the US Securities and Exchange Commission, which contains and identifies other important factors that could cause actual results to differ materially from those contained in any projections or forward-looking statements. These forward-looking statements speak only as of the date of this announcement. All subsequent written and oral forward-looking statements by or concerning Midatech are expressly qualified in their entirety by the cautionary statements above. Except as may be required under the AIM Rules or the DTRs or by relevant law in the United Kingdom or the United States, Midatech does not undertake any obligation to publicly update or revise any forward-looking statements because of new information, future events or otherwise arising.
CHAIRMAN AND CHIEF EXECUTIVE'S STATEMENT
We have made significant progress in 2016 and laid down sound foundations for future growth both across the commercial side of the business and with the exciting pipeline of drugs in development.
Midatech has continued to make good progress in 2016 in research and development of its niche cancer therapies including some potentially ground-breaking new therapies for brain cancer and liver cancer using our GNP-enabled technology platforms and know-how.
This has also been a year of strong revenue growth, with the successful launch of Zuplenz , alongside growing traction within our wider product base, and the reorganisation and optimisation of our US operation. We have brought in new management talent and new national accounts positions to allow us greater contact with hospital consortia, giving formulary access capabilities that did not exist before.
Total gross revenues for 2016 were 9.2m, in line with market expectations, up 510% from 1.51m in 2015 and an increase of 88% from 4.9m for the pro-forma combined Midatech and pre-acquisition DARA BioSciences, Inc. businesses in 2015.
Statutory Revenue was also up, by 718%, to 6.4m from 0.8m in 2015. Loss after tax was up significantly to 20.2m from 10.1m in 2015. However, 2016 included a full year of Midatech US costs and a one-off charge of 11.4m in respect of our Oravig product, discussed below. Cash balance at year end was 17.6m, an increase of 1.4m (including exchange gains) on 2015, thanks to the oversubscribed fundraise completed in Q4 2016, discussed below.
Strategy and path to profitability
Our primary objective is to grow our innovative product related revenues and launch our new products for rare cancers so that we can create value for our shareholders through a profitable and self-sustaining business with the resultant benefit to patients and clinicians.
Our strategic priorities are to grow revenues from the products we already have (which alone have the potential to allow the business to achieve profitability) and to take our three key R&D investment programmes efficiently through drug development and into commercialisation.
As part of this strategy, a significant step was completion of the latest investment in our Bilbao facility, enabling the manufacture of our sustained release products on a larger scale. This means we will be able to manufacture in-house most of our own products to clinical stage, i.e. human studies, and in some cases to early commercial scale. Following a recent, successful inspection by the Spanish Medicines Agency, AEMPS, we await the issuance of a revised licence that will allow us to manufacture products based on both of our platform technologies for use in humans.
Commercialised products
The US business, with the addition of Zuplenz , continued to perform well after its reorganisation in the first quarter of 2016, and we met our revenue targets for the year. We continue to look for ways to increase our access to the US market, such as co-promotional deals of the type we have recently signed with R-Pharm, where they will be co-promoting our products into places that we don't currently have the capacity to call on, potentially doubling our reach into the US market.
Sales of our Oravig product, acquired as part of the DARA deal, have been disappointing, particularly in the latter part of the year. We were therefore required to write down the value of that asset. However, total sales of our other products, in aggregate, have outperformed our expectations, compensating for any shortfall in revenue from Oravig, such that the US business overall is doing well against expectations. Accounting standards do not permit us to reassess the book value of these other assets upwards where performance exceeds expectations.
Our EU based R&D operation is very much focussed on our three, lead research and development programmes, each of which could transform the business, both in terms of saving lives and in driving revenue growth and future profitability. Each has the potential to achieve highly significant revenue that would transform our financial performance.
Our Q-Octreotide programme for the treatment of acromegaly and carcinoid syndrome is preparing for a short phase of first in-man bioequivalence clinical trials in 2017 to take the product to market. Over the last year, we have completed the formulation of the product (which is a new version of an existing drug, requiring less clinic time and is easier to use) and completed pre-clinical testing. Now, we hope to follow an expedited route to get the product registered and filed over the next two years, requiring a small number of clinical trials.
The product would be entering a global market for the chronic treatment of acromegaly and metastatic carcinoid syndrome, worth an estimated $2 billion per year. The revised manufacturing licence for our Spanish facility opens the way for our first in-man study of Q-Octreotide in 2017.
MTX110 is a treatment for DIPG, a rare childhood brain cancer for which there is currently no satisfactory treatment. Patients' average survival time is just 7-9 months. Following unsolicited requests from treating physicians, the treatment has been made available on a compassionate use basis. We look forward this year to taking that programme into pivotal clinical trials which we hope will lead to successful regulatory filing and approval.
The third key programme is a new treatment for liver cancer. After having tested a large number of drug and targeting agent constructs, built around our gold nanoparticle platform, in 2016 we were able to identify a combination that appears to have a significant impact on liver cancer cells, while sparing the healthy tissues in the body. Levels of chemotherapy that, without our technology can be lethal to animals, have been exceptionally well tolerated when targeted using our nanoparticle system, while clearly showing strong anti-tumour activity. We are now taking that product forward to prepare it for clinical trials by 2018.
We have now exited the legacy insulin programme following the clinical trial readout in Q2 2016. The negative result has no impact on our cancer focus, however, and the learnings of the insulin programme have been applied - our current nanotechnology formulations are suitable for injection/infusion, but we do intend to develop alternative, novel forms for oral administration.
In Q4 2016 we concluded the first round of fundraising since the Group's IPO in 2014, culminating in a significantly oversubscribed offer which allowed the Company to raise 16.7m before costs. The additional capital will be used to fund the ongoing development of our R&D pipeline products and growth of the commercial business with a view to achieving sustainable profitability.
Midatech delivered against its business plan in 2016.
We are aware of increased scrutiny on pricing in the US but we do not expect it to have a significant impact on our product portfolio. As a business, we are not overly exposed to the potential implications of the UK leaving the EU. We earn revenues mainly in US dollars and our expenses are largely in Sterling or Euros, so the net effect of Brexit-related currency movements has had a generally positive impact on reported revenue and net assets. US and other non-EU pharmaceutical businesses operate successfully in Europe and we expect to continue to do so, however, through our operation in Bilbao, Spain, we are well established within the ongoing European Union.
We are well placed to deliver attractive further growth: our existing products give us the future opportunity to become profitable (even without further products coming to market), we have a strong management team and an exciting pipeline with the capability to increase our revenues substantially over the next five to ten years as those products come to market.
Thanks to the motivation, talent and hard work of our colleagues, we are optimistic that the business can continue to deliver strong revenue growth in preparation for the launch of our new products, currently in development, as they come to market over the coming years.
On behalf of the Board, we would like to thank all of Midatech staff, investors, clinicians and patients for their support in 2016.
| Rolf Stahel | Dr Jim Phillips |
| Chairman | Chief Executive Officer |
Midatech Pharma plc (the "Company") was incorporated as a company on 12 September 2014 and is domiciled in England. The Midatech Group was formed on 31 October 2014 when Midatech Pharma plc acquired the entire issued share capital of Midatech Limited and its wholly owned subsidiaries. The Group was expanded when, on 8 December 2014, the Company acquired the entire issued share capital of UK based Q Chip Limited ("Q Chip"), a pharmaceutical development company. Q Chip was subsequently renamed Midatech Pharma (Wales) Limited ("MPW"). On 4 December 2015, the Company acquired the entire issued share capital of U.S. based, DARA BioSciences, Inc. ("DARA"), an oncology supportive care pharmaceutical company. DARA was subsequently renamed Midatech Pharma US, Inc. ("MPUS").
The MPUS business brought with it a portfolio of five cancer supportive care products and an established commercial platform in the U.S. market with a field sales organisation. To supplement this acquisition, on 24 December 2015, the Company acquired Zuplenz (ondansetron), a marketed anti-emetic oral soluble film from Galena Biopharma, Inc. (Nasdaq: GALE) for the prevention of chemotherapy-induced nausea and vomiting, radiotherapy-induced nausea and vomiting, and post-operative nausea and vomiting.
The Company was admitted to the London Stock Exchange's Alternative Investment Market ("AIM") on 8 December 2014, raising 32.0m before costs in new capital. On 4 December 2015, following the DARA acquisition, American Depositary Receipts ("ADRs") with each ADR representing the right to receive two ordinary shares, were admitted to trading on the NASDAQ Stock Market LLC trading platform ("NASDAQ").
On 28 October 2016, the Company announced that at a General Meeting, shareholders had approved the issuance of 15,157,044 new ordinary shares following a substantially oversubscribed Placing to new and existing institutional shareholders and additional Open Offer. This raised proceeds of 16.67m before expenses and the new shares were admitted to AIM on 31 October 2016.
Key performance indicators
| 2016 | 2015 | Change | ||||||||||
| Total gross revenues (1) | 9.21 | m | 1.51 | m | +510 | % | ||||||
| Statutory Revenue | 6.38 | m | 0.78 | m | +718 | % | ||||||
| US revenue | 5.60 | m | 0.56 | m | +900 | % | ||||||
| US revenue as % of Statutory Revenue | 88 | % | 72 | % | n/a | |||||||
| R&D costs | 6.68 | m | 5.92 | m | +13 | % | ||||||
| R&D as % of operating costs (2) | 35 | % | 60 | % | n/a | |||||||
| Loss from operations before intangible asset impairment charges and acquisition and listing costs and acquisition expenses (2) | ( 19.17m) | ( 9.93m) | +93 | % | ||||||||
| Net cash inflow/(outflow) for the year | 0.97 | m | ( 14.17m) | n/a | ||||||||
| Average headcount | 84 | 74 | +13 | % |
Midatech's KPIs have historically been focused on the key areas of cash management, operating results and R&D spend. These areas continue to be critical to the business, however, Midatech's US commercial operation is increasingly important and KPIs in this area are now included. Additional financial and non-financial KPIs, including further KPIs in respect of the research and development programmes and commercial operation, will be formalised in due course.
For the year ended 31 December 2016, Midatech generated consolidated total gross revenues(1) of 9.21m (2015: 1.51m), an increase of 510% on the prior year and in-line with the upper end of market expectation. Statutory Revenue for the year also increased, by 718%, to 6.38m (2015: 0.78m).
As part of the DARA deal, Midatech acquired the sales and marketing rights to five products, including Oravig , for the treatment of oral thrush, a common side effect of chemotherapy. Whilst overall performance of the MPUS business has been good, sales of Oravig has been disappointing and, as a result, the value of this element of the acquired intangible assets has become impaired, resulting in a charge of 11.41m to the Income Statement. It is unfortunate that accounting standards do not permit an impairment to be offset by any increase in the value of other intangibles, however, the performance of the other products, including Zuplenz , has enabled us to support the carrying value of goodwill in the MPUS business.
Net cash inflows for the year were 0.97m (2015: outflow of 14.17m) reflecting the share issue in October 2016 where 15.57m was raised after costs. Stripping out the share issue proceeds, the adjusted outflow of 14.14m was in line with the forecast for the year. Cash management continues to be a major focus for the Board and senior management.
Cost of sales has increased commensurately with product sales to 0.67m (2015: 0.07m) reflecting both a full year of commercial operations and continued growth in sales.
Research and development expenditure
Research and development costs increased on the previous year to 6.68m (2015: 5.92m) reflecting significant, ongoing investment in Midatech's R&D programmes. Activities in the year included:
Distribution costs, sales and marketing
Prior to the acquisition of DARA/MPUS in December 2015, Midatech did not classify any of its costs as specifically relating to distribution, sales or marketing. With a full year of commercial operations in the US, distribution costs, sales and marketing has increased significantly to 9.52m (2015: 0.37m). This includes amortisation of intangible assets acquired as part of the acquisition of DARA/MPUS resulting in a charge of 3.38m (2015: 0.23m).
Administrative costs
Midatech's administrative costs also increased on the prior year to 9.22m (2015: 7.93m), largely due to the inclusion of a full year of US commercial operations (2015: included listing and acquisition expenses of 2.99m). The increase in 2016 administrative costs was driven by consolidation of the US commercial business for a full year added 4.38m to administrative costs (2015: 0.33m) including 1.10m associated with the departure of three former senior executives.
As noted above, write down by 11.41m of the product sales and marketing rights of our Oravig product following disappointing sales performance, particularly during the latter part of 2016.
During the year, the average number of staff employed grew by 13% to 84 (2015: 74) and the payroll cost increased by 66% to 7.49m (2015: 4.52m)., including 1.1m relating to former, senior DARA management who left during 2016.
The total cash expenditure on property plant and equipment in 2016 was 1.35m (2015: 0.92m), principally reflecting investment in Midatech's sustained release ("SR") platform technology in advance of the Q-Octreotide first in-man clinical trial scheduled for early 2017. Midatech's manufacturing facility in Bilbao, Spain was expanded to enable the in-house production of Q-Octreotide and additional equipment was purchased for our SR development facility in Cardiff, UK.
Movement in total assets
Total assets saw a reduction from 64.0m at 31 December 2015 to 56.7m at 31 December 2016. This was principally the result of the net effect of impairment and amortisation charges on product right intangible assets of 15.0m, and a 4.8m foreign exchange gain arising on US denominated intangible assets as set out in note 10. Property plant and equipment increased by 0.8m mainly as a result of the manufacturing facility in Bilbao, noted above. Cash and cash equivalents, increased by 1.4m as a result of the cash from the fundraise that completed in October 2016 being greater than net cash used in operating and investing activities during the year.
Movement in total liabilities
Total liabilities saw a reduction from 17.2m at 31 December 2015 to 11.0m at 31 December 2016. This was principally the result of the reduction of the 6.5m deferred tax liability as at 31 December 2015 to nil at 31 December 2016. This reduction has been driven by the impairment and amortisation charges on product right intangible assets and the recognition of a deferred tax asset in respect of losses set against any remaining deferred tax liability. Furthermore, the derivative financial liability reduced by 1.2m as a result of the share options and warrants acquired with Midatech Pharma US lapsing during 2016 and the reduction in the share price as described in more detail in the notes to the financial statements.
Other comprehensive income
Other comprehensive income comprises 3.23m (2015: 0.40m) foreign exchange gain arising on retranslation of Midatech Pharma US operations.
Net cash outflow from operating activities for the year was 13.09m (2015: 12.42m). There was, however, a net cash inflow from financing activities of 15.26m (2015: outflow of 0.22m) which, along with the capital expenditure in the year, resulted in a net cash inflow for the year of 0.97m (2015: outflow of 14.17m). This saw the year end cash balance increase to 17.61m (2015: 16.18m).
As noted above, 15,157,044 new ordinary shares were issued on 28 October 2016 to subscribers in a Placing and additional Open Offer. This raised proceeds of 16.67m before expenses and the new shares were admitted to AIM on 31 October 2016. In addition, on 1 July 2016, 74,908 new ordinary shares were issued to former shareholders of Q Chip as the second and final tranche of deferred consideration shares for that acquisition. No other new shares were issued during the year.
As at 31 December 2016 Midatech Pharma plc had in issue 48,699,456 Ordinary Shares of 0.005 pence each.
| Note | 2015 | 2016 | 2014 | |||||||||||||
| '000 | '000 | '000 | ||||||||||||||
| Gross sales | 3 | 8,659 | 914 | 25 | ||||||||||||
| Grant revenue | 547 | 600 | 132 | |||||||||||||
| Total gross revenues | 9,206 | 1,514 | 157 | |||||||||||||
| Revenue | 3 | 6,376 | 775 | 25 | ||||||||||||
| Grant revenue | 547 | 600 | 132 | |||||||||||||
| Total revenue | 6,923 | 1,375 | 157 | |||||||||||||
| Cost of sales | (667 | ) | (70 | ) | - | |||||||||||
| Gross profit | 6,256 | 1,305 | 157 | |||||||||||||
| Research and development costs | (6,684 | ) | (5,920 | ) | (3,639 | ) | ||||||||||
| Distribution costs, sales and marketing | 4 | (9,523 | ) | (374 | ) | - | ||||||||||
| Administrative costs | 4 | (9,222 | ) | (7,929 | ) | (4,405 | ) | |||||||||
| Impairment of intangible assets | 10 | (11,413 | ) | - | (1,800 | ) | ||||||||||
| Loss from operations before intangible asset impairment charges, listing costs and acquisition expenses | (19,173 | ) | (9,927 | ) | (6,952 | ) | ||||||||||
| Impairment of intangible assets | (11,413 | ) | - | (1,800 | ) | |||||||||||
| Listing and acquisition expenses - included in administrative costs | - | (2,991 | ) | (935 | ) | |||||||||||
| Loss from operations | 4 | (30,586 | ) | (12,918 | ) | (9,687 | ) | |||||||||
| Finance income | 6 | 1,337 | 1,691 | 8 | ||||||||||||
| Finance expense | 6 | (73 | ) | (5 | ) | (161 | ) | |||||||||
| Loss before tax | (29,322 | ) | (11,232 | ) | (9,840 | ) | ||||||||||
| Taxation | 7 | 9,160 | 1,133 | 1,018 | ||||||||||||
| Loss for the year attributable to the owners of the parent | (20,162 | ) | (10,099 | ) | (8,822 | ) | ||||||||||
| Other comprehensive income: | ||||||||||||||||
| Items that will or may be reclassified subsequently to profit or loss when specific conditions are met: | ||||||||||||||||
| Exchange gains/(losses) arising on translation of foreign operations | 3,228 | 399 | (151 | ) | ||||||||||||
| Total other comprehensive income/(loss), net of tax | 3,228 | 399 | (151 | ) | ||||||||||||
| Total comprehensive loss attributable to the owners of the parent | (16,934 | ) | (9,700 | ) | (8,973 | ) | ||||||||||
| Loss per share | ||||||||||||||||
| Basic and diluted loss per ordinary share - pence | 8 | (56p | ) | (36p | ) | (98p | ) |
| Company Number 09216368 | Note | 2016 | 2015 | 2014 | ||||||||||||
| Assets | '000 | '000 | '000 | |||||||||||||
| Non-current assets | ||||||||||||||||
| Property, plant and equipment | 9 | 2,766 | 1,984 | 1,516 | ||||||||||||
| Intangible assets | 10 | 31,172 | 41,339 | 13,094 | ||||||||||||
| Other receivables due in greater than one year | 17 | 448 | 387 | 425 | ||||||||||||
| 34,386 | 43,710 | 15,035 | ||||||||||||||
| Current assets | ||||||||||||||||
| Inventories | 19 | 817 | 459 | - | ||||||||||||
| Trade and other receivables | 17 | 2,439 | 2,496 | 462 | ||||||||||||
| Taxation | 1,439 | 1,201 | 841 | |||||||||||||
| Cash and cash equivalents | 18 | 17,608 | 16,175 | 30,325 | ||||||||||||
| 22,303 | 20,331 | 31,628 | ||||||||||||||
| Total assets | 56,689 | 64,041 | 46,663 | |||||||||||||
| Liabilities | ||||||||||||||||
| Non-current liabilities | ||||||||||||||||
| Borrowings | 21 | 1,620 | 1,508 | 1,488 | ||||||||||||
| Deferred tax liability | 24 | - | 6,547 | 354 | ||||||||||||
| 1,620 | 8,055 | 1,842 | ||||||||||||||
| Current liabilities | ||||||||||||||||
| Trade and other payables | 20 | 8,407 | 7,084 | 2,341 | ||||||||||||
| Borrowings | 21 | 538 | 442 | 491 | ||||||||||||
| Derivative financial liability - equity settled | 22 | 400 | 1,573 | - | ||||||||||||
| 9,345 | 9,099 | 2,832 | ||||||||||||||
| Total liabilities | 10,965 | 17,154 | 4,674 | |||||||||||||
| Issued capital and reserves attributable to owners of the parent | ||||||||||||||||
| Share capital | 25 | 1,002 | 1,002 | 1,001 | ||||||||||||
| Share premium | 26 | 47,211 | 31,643 | 31,643 | ||||||||||||
| Merger reserve | 26 | 53,003 | 52,803 | 37,776 | ||||||||||||
| Shares to be issued | 26 | - | 200 | 800 | ||||||||||||
| Foreign exchange reserve | 26 | 3,618 | 390 | (9 | ) | |||||||||||
| Accumulated deficit | 26 | (59,110 | ) | (39,151 | ) | (29,222 | ) | |||||||||
| Total equity | 45,724 | 46,887 | 41,989 | |||||||||||||
| Total equity and liabilities | 56,689 | 64,041 | 46,663 |
The financial statements were approved and authorised for issue by the Board of Directors on April 3, 2017 and were signed on its behalf by:
Chief Financial Officer
The notes form an integral part of these consolidated financial statements
| Note | 2016 | 2015 | 2014 | |||||||||||||
| '000 | '000 | '000 | ||||||||||||||
| Cash flows from operating activities | ||||||||||||||||
| Loss for the year | (20,162 | ) | (10,099 | ) | (8,822 | ) | ||||||||||
| Adjustments for: | ||||||||||||||||
| Depreciation of property, plant and equipment | 9 | 772 | 501 | 321 | ||||||||||||
| Amortisation of intangible fixed assets | 10 | 3,583 | 236 | 1 | ||||||||||||
| Loss on disposal of fixed assets | - | - | 89 | |||||||||||||
| Net interest (income)/expense | 6 | (1,264 | ) | (1,686 | ) | 153 | ||||||||||
| Impairment of product and marketing rights | 14 | 11,413 | - | - | ||||||||||||
| Impairment of IPRD | 14 | - | - | 1,800 | ||||||||||||
| Gain on bargain purchase | 13 | (165 | ) | - | ||||||||||||
| Share based payment expense | 5 | 203 | 170 | - | ||||||||||||
| Taxation | 7 | (9,160 | ) | (1,133 | ) | (1,018 | ) | |||||||||
| Cash flows from operating activities before changes in working capital | (14,615 | ) | (12,176 | ) | (7,476 | ) | ||||||||||
| Increase in inventories | (237 | ) | (62 | ) | - | |||||||||||
| (Increase)/Decrease in trade and other receivables | (242 | ) | (1,540 | ) | 761 | |||||||||||
| Increase in trade and other payables | 358 | 711 | 466 | |||||||||||||
| Cash used in operations | (14,736 | ) | (13,067 | ) | (6,249 | ) | ||||||||||
| Taxes received | 1,650 | 646 | 794 | |||||||||||||
| Net cash used in operating activities | (13,086 | ) | (12,421 | ) | (5,455 | ) | ||||||||||
| Investing activities | ||||||||||||||||
| Purchases of property, plant and equipment | (1,347 | ) | (922 | ) | (1,030 | ) | ||||||||||
| Purchase of intangibles | (19 | ) | (3 | ) | - | |||||||||||
| Acquisition of subsidiary, net of cash acquired | 12 | - | 1,867 | 115 | ||||||||||||
| Acquisition of business, net of cash acquired | 13 | - | (2,528 | ) | - | |||||||||||
| Interest received | 164 | 53 | 8 | |||||||||||||
| Net cash used in investing activities | (1,202 | ) | (1,533 | ) | (907 | ) | ||||||||||
| Financing activities | ||||||||||||||||
| Interest paid | (74 | ) | (5 | ) | (48 | ) | ||||||||||
| Payments to finance lease creditors | (69 | ) | (49 | ) | (48 | ) | ||||||||||
| Repayment of borrowings | (235 | ) | (165 | ) | (346 | ) | ||||||||||
| New bank loan | 65 | - | - | |||||||||||||
| Loan finance raised | - | - | 890 | |||||||||||||
| Share issues net of costs | 18 | 15,568 | - | 33,852 | ||||||||||||
| Net cash generated from/(used in) financing activities | 15,255 | (219 | ) | 34,300 | ||||||||||||
| Net increase/(decrease) in cash and cash equivalents | 967 | (14,173 | ) | 27,938 | ||||||||||||
| Cash and cash equivalents at beginning of year | 16,175 | 30,325 | 2,387 | |||||||||||||
| Exchange gains on cash and cash equivalents | 466 | 23 | - | |||||||||||||
| Cash and cash equivalents at end of year | 18 | 17,608 | 16,175 | 30,325 |
The notes form an integral part of these consolidated financial statements.
| Share capital | Share premium | Merger reserve | Shares to be issued | Foreign exchange reserve | Accumulated deficit | Total equity | ||||||||||||||||||||||
| '000 | '000 | '000 | '000 | '000 | '000 | '000 | ||||||||||||||||||||||
| At 1 January 2016 | 1,002 | 31,643 | 52,803 | 200 | 390 | (39,151 | ) | 46,887 | ||||||||||||||||||||
| Loss for the year | - | - | - | - | - | (20,162 | ) | (20,162 | ) | |||||||||||||||||||
| Foreign exchange translation | - | - | - | - | 3,228 | - | 3,228 | |||||||||||||||||||||
| Total comprehensive loss | - | - | - | - | 3,228 | (20,162 | ) | (16,934 | ) | |||||||||||||||||||
| Transactions with owners | ||||||||||||||||||||||||||||
| Shares issued on 31 October 2016 - note 18 | - - | 16,673 | - - | - - | - - | - - | 16,673 | |||||||||||||||||||||
| Costs associated with share issue - note 18 | (1,105 | ) | (1,105 | ) | ||||||||||||||||||||||||
| Share option charge | - | - | - | - | - | 203 | 203 | |||||||||||||||||||||
| Shares issued as deferred consideration for business combination | - | 200 | (200 | ) | - | - | - | |||||||||||||||||||||
| Total contribution by and distributions to owners | - | 15,568 | 200 | (200 | ) | - | 203 | 15,771 | ||||||||||||||||||||
| At 31 December 2016 | 1,002 | 47,211 | 53,003 | - | 3,618 | (59,110 | ) | 45,724 |
| Share capital | Share premium | Merger reserve | Shares to be issued | Foreign exchange reserve | Accumulated deficit | Total equity | ||||||||||||||||||||||
| '000 | '000 | '000 | '000 | '000 | '000 | '000 | ||||||||||||||||||||||
| At 1 January 2015 | 1,001 | 31,643 | 37,776 | 800 | (9 | ) | (29,222 | ) | 41,989 | |||||||||||||||||||
| Loss for the year | - | - | - | - | - | (10,099 | ) | (10,099 | ) | |||||||||||||||||||
| Foreign exchange translation | - | - | - | - | 399 | - | 399 | |||||||||||||||||||||
| Total comprehensive loss | - | - | - | - | 399 | (10,099 | ) | (9,700 | ) | |||||||||||||||||||
| Transactions with owners | ||||||||||||||||||||||||||||
| Shares issued on exercise of share options | 1 | - | - | - | - | - | 1 | |||||||||||||||||||||
| Shares, warrants and share options issued as consideration for a business combination - 4 December 2015 | - | - | 14,427 | - | - | - | 14,427 | |||||||||||||||||||||
| Share option charge | - | - | - | - | - | 170 | 170 | |||||||||||||||||||||
| Shares issued as deferred consideration for business combination | - | - | 600 | (600 | ) | - | - | - | ||||||||||||||||||||
| Total contribution by and distributions to owners | 1 | - | 15,027 | (600 | ) | - | 170 | 14,598 | ||||||||||||||||||||
| At 31 December 2015 | 1,002 | 31,643 | 52,803 | 200 | 390 | (39,151 | ) | 46,887 |
| Share capital | Share premium | Merger reserve | Shares to be issued | Foreign exchange reserve | Accumulated deficit | Total Equity | ||||||||||||||||||||||
| '000 | '000 | '000 | '000 | '000 | '000 | '000 | ||||||||||||||||||||||
| At 1 January 2014 | - | 21,018 | - | - | 142 | (20,400 | ) | 760 | ||||||||||||||||||||
| Loss for the year | - | - | - | - | - | (8,822 | ) | (8,822 | ) | |||||||||||||||||||
| Foreign exchange translation | - | - | - | - | (151 | ) | - | (151 | ) | |||||||||||||||||||
| Total comprehensive loss | - | - | - | - | (151 | ) | (8,822 | ) | (8,973 | ) | ||||||||||||||||||
| Issue of Midatech Limited shares -pre-share for share exchange | - | 3,202 | - | - | - | - | 3,202 | |||||||||||||||||||||
| Transfer to merger reserve on the merger of Midatech Pharma plc and Midatech Limited - 31 October 2014 | - | (24,220 | ) | 24,220 | - | - | - | - | ||||||||||||||||||||
| Transfer of A Preference shares from liability to equity (28 October 2014) and subsequent conversion to Deferred shares - 8 December 2014 | 1,000 | - | - | - | - | - | 1,000 | |||||||||||||||||||||
| Issue of shares to settle A Preference share accrued dividend - 8 December 2014 | - | 994 | - | - | - | - | 994 | |||||||||||||||||||||
| Shares issued as consideration for a business combination - 8 December 2014 | - | - | 13,556 | - | - | - | 13,556 | |||||||||||||||||||||
| Shares to be issued as consideration for a business combination - 8 December 2014 | - | - | - | 800 | - | - | 800 | |||||||||||||||||||||
| Issue of shares on placing - 8 December 2014 | 1 | 32,000 | - | - | - | - | 32,001 | |||||||||||||||||||||
| Costs associated with share placing | - | (1,351 | ) | - | - | - | - | (1,351 | ) | |||||||||||||||||||
| Total contribution by and distributions to owners | 1,001 | 10,625 | 37,776 | 800 | - | - | 50,202 | |||||||||||||||||||||
| At 31 December 2014 | 1,001 | 31,643 | 37,776 | 800 | (9 | ) | (29,222 | ) | 41,989 |
The notes form an integral part of these consolidated financial statements.
Midatech Pharma plc (the "Company") is a company domiciled in England. The Company was incorporated on 12 September 2014.
The Company is a public limited company, which has been listed on the Alternative Investment Market ("AIM"), which is a submarket of the London Stock Exchange, since 8 December 2014.
In addition, since 4 December 2015 the Company has American Depository Receipts ("ADRs") registered with the US Securities and Exchange Commission ("SEC") and is listed on NASDAQ.
Basis of preparation