Post on 07-Apr-2022
Cyprotex Confidential
2
Cyprotex PLCLatest News – Increased Confidence!
Cyprotex PLC’s most recent RNS was released on 6th November 2008, as follows:
Cyprotex PLC(“Cyprotex“ or “the Company“)
Cyprotex PLC (LSE: CRX), the drug discovery services and information group, announces a trading update on its performance-to-date in calendar year to 2008.
Progress for the ten months to the end of October has been encouraging. The group produced a net profit in both the second and third quarters of 2008, and the Directors expect the same positive trend to continue into the fourth quarter. As a result the Directors expect 2008 full year net profits (including significant adjustments for non-recurring costs associated with the recent board restructuring) to be in excess of the current market expectations.
The Company announces that it will hold an investor call on 11th November 2008 at 16.30 (GMT). The call can be accessed by dialing into conference call telephone number: 0800-358-8171 and following the instructions to input pass code number: 329475 followed by #.
A presentation to accompany and support the call has been updated and will be available on the Company's website: www.cyprotex.com on the morning of the conference call.
For further information:
Cyprotex Confidential
3
Cyprotex PLCIdeally Positioned for Growth
• High-tech, high margin services for the pharmaceutical industry
• Over 200 international customers incl. half the top ten global giants
• Key beneficiary of industry-wide slowdown/trend toward outsourcing
• Profitable, strong balance sheet and cash generative for past two quarters
• Enjoying strong organic growth and high operational gearing
• Strengthened Management and Board
Cyprotex Confidential
4
Cyprotex PLCSpecialist Outsourcing for the Pharmaceutical Industry
• Unique industrial-scale laboratory facility - offering “virtual human” screening in a test tube
• Our customers can select drug candidates with better safety and efficacy profiles, with less likelihood of clinical failure
• Pharmaceutical sector to increase outsourcing and expand available market by 20% pa going forward
• Now targeting complementary/high potential acquisitions• An Ethical investment
Cyprotex Confidential
5
Management ChangesStrengthening the Board
• New Chief Executive Officer – Dr Anthony Baxter appointed June 2008
• New Non-Executive Chairman – Mr Steve Harris appointed Sept. 2008
• Chief Financial Officer – Russell Gibbs
• Nikolas Sofronis – Non-Executive Director
• David Evans – Non-Executive Director
• New Non-Executive Directors with sector experience being identified
Cyprotex Confidential
6
Steve Harris – Non-Executive Chairman Background
An experienced Non-Executive director with a range of
private and public companies in the life science sector
Current Positions :• Non-Executive Chairman of AIM-listed Proteome Sciences PLC• Non-Executive Chairman of LSE-listed Sinclair Pharma PLC• Non-Executive Chairman of Myotec Therapeutics Limited • Advanced Medical Solutions PLC – Non-Executive Director• Phynova plc – Non-Executive Director
Cyprotex Confidential
7
Dr Anthony Baxter – Chief Executive OfficerBackground
Over 25 years experience at Board level, in management and
research within the pharmaceutical, biotech, chemistry service and
instrumentation industries, principally in the areas of drug discovery,
medicinal chemistry, combinatorial chemistry and genomics positions :
Past Executive and Academic Positions:
• CEO deltaDOT Ltd 2005-2008• Founder and CEO Argenta Discovery Ltd 2000 -2005• CSO Oxford Asymmetry Intl. PLC 1995 -2000• Research Manager Ciba Central Research 1990 -1995• Team Leader Glaxo Group Research 1983 -1990• PhD Synthetic Chemistry Univ. Salford
Cyprotex Confidential
8
Service OfferingCEO Review as of June 2008
Positives Issues• Diverse range of services• Good customer retention• Excellent customer
satisfaction for services offered
• Focus on delivery of high quality services
• Excellent gross margins (~80%)… incremental sales quickly convert to cash
• Offering is a little ‘tired’• Lack of resources has
prevented the launch of new products & services
Action Points• Introduce new offerings
(e.g. new transporters, better Metabolite ID); after consultation with clients
Cyprotex Confidential
9
Service OfferingCEO Review
• New QTRAP 5500 Mass Spec. (£250K) ordered and will be operational in Jan 2009 – this will enable much more sensitive analyses to be performed
• New CYP2C8 assay developed and marketed• New metabolite ID / synthesis offering developed with
Onyx Scientific• New Mass Spec about to be ordered which will improve
throughput 2x on the lab triple quads
Results after 4 months
Cyprotex Confidential
10
Customers & SalesCEO Review
Positives Issues• Large customer base
(184 MSA’s) provides ‘core’ revenue of c.£3.3m per year and growing
• Recent signing of large strategic deal with mid sized European pharma(started May 2008) proceeding well –expected revenue >£1.5m per year
• New client is now a material % of revenues
• Lack of revenue visibility month to month
• About 35% of business is ‘overflow’ work from ‘big’pharma / biotech
• Low penetration of European market
but also…
Cyprotex Confidential
11
Customers & Sales (continued)CEO Review
Issues Action Points• No formal account
management in place• Lack of commercial focus
to bring in new customers
• Too much reliance on existing customers
• New sales team and no Commercial head
• Lack of scientist input in sales process
• Exceed expectations for 2008 revenues (budget for 2008 is £4.7M)
• Hire a Chief Commercial Officer to lead sales team (already identified)
• Greater focus on business development of new customers
but also…
Cyprotex Confidential
12
Customers & Sales (continued)CEO Review
Action Points Action Points• Improve account
management process• Reduce reliance on
‘overflow’ work• Secure 2 more large
‘strategic’ deals• Secure more
‘collaborative’ deals• Reduce reliance on
‘overflow’ work
• Significant investment / improvement in marketing (stands, literature, training)
• Target European pharma/ biotech / Agrichemmore actively
• Training of scientists to support business development activity
Cyprotex Confidential
13
Customers & Sales (continued)CEO Review
Results after 4 months• RNS last week announced year end turnover and profits
to be increased over previous management expectations• Search for CCO ongoing (1 offered)• Improved activity of Bus Dev group has resulting in 10
new customers since July, 36 on going negotiations with potential new customers and existing customers placing larger orders
• Month by month revenue visibility improved to 45%• Marketing improved – new stands, brochures, e-mail
flyers. Website currently under review• Study Managers (5) now trained and encouraged to
support Bus Dev activities
Cyprotex Confidential
14
StaffCEO Review
Positives Issues• Highly committed and
talented workforce• Key staff have been with
CRX for over 6 years• Excellent retention rate• Relative ease of
recruitment of new staff• Macclesfield is in a
pharma (AZ) hub within the larger Manchester area
• Career development for exceptional staff
• Attracting specialist staff to Macclesfield
Action Points• Career development
plans will beimplemented for all staff
Cyprotex Confidential
15
StaffCEO Review
Results after 4 months
• Mentoring system for all new staff has commenced• Training manual for all staff involved in sales started• Company meetings for all staff held quarterly
Cyprotex Confidential
16
Investor CommunicationsCEO Review
Positives Issues• Large shareholders are close
to the company and supportive of new impetus
• Limited news flow to market
• Lack of broker research• Website gossip
Action Points• Quarterly update dial-in
calls for all investors• Increased institutional
visits to increase demand
Cyprotex Confidential
17
Investor CommunicationsCEO Review
• Quarterly meetings with shareholders organised• Research note written in July by our NOMAD• News flash from NOMAD published today• Personal visits to company by institutional and private
investors welcomed and updates given to all investors by Management team
Results after 4 months
Cyprotex Confidential
18
Cyprotex PLCCompany Overview
• Cyprotex provides outsourced ADMET (Absorption, Distribution, Metabolism, Excretion, & Toxicity) screening of drug candidates to the global pharmaceutical & biotech industry
• ADMET screening - in vitro tests used to predict how a drug will be behave in vivo (i.e. in living bodies) - All drug candidates are tested at some point in their development.
• Highly automated process driven by proprietary software and state-of-the-art laboratory facilities
• Cyprotex offers high-throughput (Cloe Screen), bespoke (Cloe Select) and predictive (Cloe Predict) services
• Business model provides very high operational gearing
Cyprotex Confidential
19
Cyprotex PLCMarket Review
• In excess of 85% of ADMET tests are still performed internally by pharmaceutical & biotech companies themselves – yet it is not a core competence
• But the external market for outsourced ADMET presently addressed by Cyprotex is estimated to be worth over $600M is now growing >20%p.a.
• Growth drivers include:• Pharmaceutical industry now embracing greater outsourcing in all areas • Industry moving to perform ADMET earlier in drug discovery to reduce attrition in later
clinical trials• First signs of mid-tier Pharma switching from overflow outsourcing of ADMET to strategic
partnerships to reduce internal overhead• Agrichem now screening chemicals to ensure they comply with regulatory body rules
Cyprotex Confidential
20
Cyprotex PLCProduct Offering
• ADMET has historically been performed manually, labour intensively, – this is expensive, time consuming & often low quality
• Cyprotex’s unique offering remains unchallenged on basis of:– Rapid turnaround– Exceptionally robust data– Highest industry capacity– Low cost without compromising quality
• This is achieved by high strategic investment in:– Custom built, proprietary automation and operating system– Significantly refined internal processes– State-of-the-art laboratory facilities– Unique data handling software
Cyprotex Confidential
21
Cyprotex PLCSample of Global Customers
Cyprotex Confidential
22
Cyprotex PLCRationale for Future Acquisition Strategy
• Cyprotex becomes preferred supplier for multiple services and ‘one-stop shopping’
• Diversification of services decreases risk and increases sales opportunities
• Major cross-selling opportunities through Cyprotex’s large installed customer base
• Rationalisation benefits to accrue through Group head-office, administrative function
• Management has core shareholder support to effect ambitious expansion plans
Cyprotex Confidential
23
Financial PerformanceSix Months to 30 June 2008
• Performance ahead of Management expectations• Revenues for the period rose by 33% to £2.25m (1H 2007: £1.69m)• Operating profit declared for the first time at £81k (1H: 2007 loss £428k)• Net Profit declared for first time at £56k (1H: 2007 loss £418k)• Fully diluted earnings per share at 0.04p (1H 2007: loss 0.31p)• Cash ‘in hand’ unchanged from comparable period at £276k (1H: 2007
£267k)
Cyprotex Confidential
24
Fund Raising Background and Reasons for the Placing
• Higher growth expectations• Improved shareholder confidence following appointment of Dr Anthony
Baxter• Build upon commercial sales infrastructure, laboratory efficiency and
capacity• Provide resources to respond to customer demands and opportunities• Provide confidence for customers to make longer-term outsourcing
commitments• Placing and Open Offer successfully completed on 26th August 2008,
raising £1m (gross). Cash-in-hand presently over £1.4m.
Cyprotex Confidential
25
Cyprotex PLCBusiness Evolution
• Increase market focus, appoint Chief Commercial Officer• Deepen relationships within global customer base• Focus on scientific input and value-added, while continuing to set
industry standards in high throughput ADMET screening• Broaden offering organically and through acquisition • Reduce historical dependence on ‘fee-for-service’ or ‘overflow’
activity• Heighten dependence on longer-term strategic and collaborative
agreements • Become an ‘integral part of the customers drug development
programme’
Cyprotex Confidential
26
Cyprotex15 Beech LaneMacclesfieldCheshireSK10 2DRUK
info@cyprotex.comwww.cyprotex.com
Appendices
Cyprotex Confidential
27
Summary Profit and Loss
Six months ended 30 June 2008 (£’000)
-
EBDASBP 190 (224) (152)EBITDA 202 (287) (232) (389)
(171)
Operating profit/(loss) 81 (428) (496)
Taxation credit - 34 64
Profit/(Loss) before taxation 56 (452) (543)
Turnover 2,246 1,685 3,626
2008 HY 2007 HY 2007 FY
Profit/(Loss) per ordinary share 0.04p (0.31)p (0.35)p
Loss for the year 56 (418) (479)
Net interest (payable)/ receivable (25) (24) (47)
2006 FY*
3,504
Staff costs (1,222) (1,149) (2,191) (2,072)
Gross profit 1,894 1,437 3,004 2971
Share based payment charge (13) (52) (64)
Depreciation (121) (141) (264) (352)
Other costs (457) (523) (981) (1,151)
(741)(20)
(761)101
(660)(0.48)p*
(137)
*restated on the adoption of IFRS from 1 January 2007
Cyprotex Confidential
28
Summary Cash Flow
Six months ended 30 June 2008 (£’000)
Net cash flow before financing 44 (130) (28)
Opening cash 301 455 455
Net cash flow (25) 188 (154)
2008 HY 2007 HY 2007 FY
Closing cash 276 267 301
Financing (net) (69) (58) (126)
2006 FY*
Interest (paid)/received (net) (25) (24) (47) (20)
Taxation received 0 0** 95
Capital expenditure (net) (6) (17) (33) (78)
(76)
690
455
(Outflow)/inflow from operations 75 (89) (43) (208)
147
(159)
(235)
*restated on the adoption of IFRS from 1 January 2007
**R&D tax credit of £95,000 received on 6 August 2007
Cyprotex Confidential
29
Summary Balance Sheet
As at 30 June 2008 (£’000)
Net assets
Cash
Debt
Net assets before net (debt)/cash
Current liabilities excluding debt
Current assets excluding cash
Fixed assets
2008 HY 2007 HY 2007 FY 2006 FY
1,250 1,472 1,365 1,422
1,018 844 843 944
(477) (398) (442) (387)
(730) (867) (799) (752)
276 267 301 455
1,791 1,918 1,766 1,979
1,337 1,318 1,268 1,682
Cyprotex Confidential
30
Fund Raising Details
• Placing and Open Offer successfully completed on 26th August 2008, raising £1m (gross).
• Subscribed by existing and new investors on a non-pre-emptive basis.• Placing of 40 million new ordinary shares of 0.1p each at 2.5p per
share• New Ordinary Shares comprise 22.39% of the enlarged entire issued
share capital• New Ordinary Shares admitted to trading on 1st September• Total cash-in hand at end August 2008 £1.2m