REG - Provexis PLC - Half-year Report
31/12/2021 07:00
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RNS Number : 1127X Provexis PLC 31 December 2021
Prior to publication, the information contained within this announcement was
deemed by the Company to constitute inside information as stipulated under the
UK Market Abuse Regulation. With the publication of this announcement, this
information is now considered to be in the public domain.
31 December 2021
Provexis plc
UNAUDITED INTERIM RESULTS FOR SIX MONTHS TO 30 SEPTEMBER 2021
Provexis plc ("Provexis" or the "Company"), the business that develops,
licenses and sells the proprietary, scientifically-proven Fruitflow®
heart-health functional food ingredient, announces its unaudited interim
results for the six months ended 30 September 2021.
Highlights
· Long term strategic co-operation framework agreement for
Fruitflow secured with By-Health in November 2021, with exclusive supply and
distribution rights for By-Health to commercialise Fruitflow in China and
Australia.
· Planned launch by By-Health, a circa £5bn listed Chinese dietary
supplement business, of a number of Fruitflow based products in the Chinese
market is progressing well. Potential sales volumes remain at a significant
multiple of existing Fruitflow sales.
· By-Health continues to work on an extensive regulatory submission to
the Chinese State Administration for Market Regulation (SAMR) for Fruitflow,
seeking to establish a new permitted health function claim for foods such as
Fruitflow that can demonstrate an anti-platelet effect, addressing the
aberrant blood clots which can lead to heart attacks and strokes.
· By-Health has made a significant investment in eight separate
studies in China, at its sole expense, in support of the Fruitflow based
products which it plans to launch in China. The five studies which have been
completed by By-Health showed excellent results in use for Fruitflow, and
provide strong evidence for By-Health in its regulatory submissions to the
SAMR for Fruitflow.
· The Company and its commercial partner DSM remain in constructive
negotiations, working towards a new agreement for Fruitflow for the period
after 31 December 2022.
· Fruitflow has been recognised in a further five published
scientific journals over the past eighteen months, two of them in the context
of COVID-19; the Frontiers in Nutrition journal stated that nutraceuticals
such as Fruitflow may serve as a 'safe antiplatelet prophylactic treatment for
those at high risk of COVID-19'.
· Total revenue for the period £211k, 11% behind the prior six
month period (2020: £237k), primarily due to short term lockdowns and other
COVID-19 disruptions in some of the growing markets for Fruitflow in the Asia
Pacific region.
· The Company's Fruitflow+ Omega-3 direct selling business accounted
for £76k of total revenue, a 34% increase in this business relative to the
prior six month period (2020: £57k). A new production run of Fruitflow+
Omega-3 capsules was completed in July 2021.
· Loss from operations reduced to £145k, 29% lower than the prior
six month period (2020: £202k).
· Cash £982k at 30 September 2021 (30 September 2020: £156k). The
Company raised £1.0m from a placing in December 2020.
Provexis Chairman Dawson Buck and CEO Ian Ford commented:
'We were delighted to announce a supply and distribution agreement for
Fruitflow with By-Health in November 2021, which follows our extensive work
with By-Health over the last five years. The agreement will take full effect
from 1 January 2023.
By-Health currently expects to be in a position to complete the last of its
eight studies in 2022, and it will file its regulatory submission to the SAMR
for Fruitflow at the appropriate time, seeking to obtain a new permitted
health function claim for foods such as Fruitflow that can demonstrate an
anti-platelet effect. If By-Health is successful in obtaining a new permitted
health function claim, it is currently expected that this would result in some
significant orders for Fruitflow, potentially at a multiple of current total
sales values.
Fruitflow is well placed to play an important role in the Chinese
cardiovascular health market under the permitted health function claim
legislation, and we look forward to working closely with By-Health seeking to
maximise the commercial success of this agreement for the benefit of both
companies.
The Company and DSM have had a strong long-term relationship, with the shared
interest of both companies being to maximise the commercial returns that can
be achieved from Fruitflow. The total projected annual sales value of the
prospective sales pipeline for Fruitflow continues to stand at a substantial
multiple of existing annual sales.
The Alliance Agreement with DSM dates back to June 2010, with a contractual
term which runs to 31 December 2022. By default from 1 January 2023 the
agreement: (i) permits DSM to continue to sell Fruitflow to its existing
customers, on the basis that a royalty on Fruitflow sales, fixed at favourable
market conditions, will remain payable to the Company; and (ii) permits the
Company to sell Fruitflow as an ingredient directly to third parties, outside
the existing profit sharing arrangements.
The Company and DSM have started and remain currently engaged in constructive
negotiations working towards a new agreement. The commercial terms of the
negotiations remain confidential between the two parties, and the Company will
provide shareholders with a further update in due course.
The Company has developed a strong, long lasting and wide-ranging patent
portfolio for Fruitflow, and it owns four outright patent families for
Fruitflow which have a truly global footprint. The Company also holds other
valuable intellectual property and trade secrets for the technology. The
intellectual property for Fruitflow is of fundamental importance to the
Company and its current and future commercial partners, to include DSM and
By-Health, and it underpins the numerous commercial opportunities which the
Company and its partners are pursuing for Fruitflow.
The Company would like to thank its customers and shareholders for their
continued support, and the Board remains positive about the outlook for
Fruitflow and the Provexis business for the second half of the financial year
and beyond.'
For further information please contact:
Provexis plc Tel: 07490 391888
Ian Ford, CEO enquiries@provexis.com
Dawson Buck, Non-executive Chairman
Allenby Capital Limited (Nominated Adviser and Broker) Tel: 020 3328 5656
Nick Naylor / Liz Kirchner (Corporate Finance)
Matt Butlin (Sales and Corporate Broking)
Chairman and CEO's statement
The Company has had an active first six months of the year, seeking to enhance
further the commercial prospects of its innovative, patented Fruitflow®
heart-health ingredient.
On 4 November 2021 the Company announced that it had entered into a supply and
distribution agreement for Fruitflow with By-Health, which followed the
Company's extensive work with By-Health over the last five years.
By-Health is seeking to obtain a new permitted health function claim in China
for foods such as Fruitflow that can demonstrate an anti-platelet effect,
addressing the aberrant blood clots which can lead to heart attacks and
strokes. If By-Health is successful in obtaining a new permitted health
function claim, it is currently expected that this would result in some
significant orders for Fruitflow, potentially at a multiple of current total
sales values.
In the six months ended 30 September 2021 total revenues were £211k, 11%
behind the prior six month period (2020: £237k), reflecting:
· A decrease in the net income received from the Company's Alliance
Agreement with DSM, which fell by 21% to £135k in the period (2020: £172k);
· An increase in revenue, net of sales rebates, from the Company's
Fruitflow+ Omega-3 business, including the Company's website
www.fruitflowplus.com (http://www.fruitflowplus.com) , Amazon UK, Holland
& Barrett, and the Company's distributor for Fruitflow+ Omega-3 in China
through the CBEC channel. This business grew by 34% to £76k in the period
(2020: £57k); and
· Amounts of £Nil received in the period for Fruitflow+ nitrates
development products, compared to amounts of £8k in the prior period.
The decrease in net income received from the Company's Alliance Agreement with
DSM was primarily due to short term lockdowns and other COVID-19 disruptions
in some of the growing markets for Fruitflow in the Asia Pacific region,
leading to more erratic demand in the short term.
An increasing number of further commercial projects have been initiated by DSM
with prospective customers, including some prospective customers which are
part of global businesses, and the total projected annual sales value of the
prospective sales pipeline for Fruitflow continues to stand at a substantial
multiple of existing annual sales.
Loss from operations for the period was £145k, 29% lower than the prior
period (2020: £202k).
Underlying operating loss for the period (before share based payments of £28k
(2020: £107k), as set out on the face of the Consolidated Statement of
Comprehensive Income) was £117k, 22% higher than the prior six month period
(2020: £95k).
By-Health Co., Ltd.
On 4 November 2021 the Company announced that it had entered into a supply and
distribution agreement (the 'Agreement') for Fruitflow with By-Health, a
listed Chinese dietary supplement business with a market capitalisation of
approximately £5 billion.
The Agreement, which followed the Company's extensive work with By-Health over
the last five years, will take full effect from 1 January 2023 and it gives
By-Health exclusive supply and distribution rights to commercialise Fruitflow
in Mainland China, Hong Kong, Macau, Taiwan and Australia (the 'Territories').
Under the Agreement:
· Provexis will be responsible for the manufacture, supply and sale of
its Fruitflow heart-health functional food ingredient to By-Health, and it
will contribute scientific expertise necessary for successful
commercialisation.
· By-Health will be responsible for the manufacture, marketing, and
sale of Fruitflow based functional food and dietary supplement finished
products in the Territories, through By-Health's extensive sales network.
Dietary supplement products such as Fruitflow are required to be authorised by
the relevant Government authorities in each of the Territories in respect of
health claims.
· By-Health will also have exclusive rights to act as the
distributor of Fruitflow as an ingredient in the Territories, selling
Fruitflow as an ingredient to other businesses in the Territories which wish
to use Fruitflow to manufacture and sell their own Fruitflow based finished
products in the Territories.
· Provexis and By-Health will seek to collaborate on research and
development projects which may result in the development and approval of
Fruitflow as a drug, for potential sale and distribution in the Territories.
The Agreement, which will take full effect from 1 January 2023, commenced on 4
November 2021 and it has a term of ten years, subject to extension and
termination clauses.
When the Agreement was signed, Felix Zhang MSc PhD, who is now Executive
Director, By-Health Research; and Global Director R&D, commented that:
'The strong science behind Fruitflow fits very well with our 'science-based
nutrition' strategy, which focusses on strong science-backed evidence to
support health claims which are of benefit to consumers. We look forward to
progressing our work with Fruitflow, in partnership with Provexis, towards
future significant commercialisation in China and Australia.'
By-Health has since launched a Personalised Customised Vitamin Concept
Product, as further detailed at: www.by-health.com/news-4429
(http://www.by-health.com/news-4429) .
Regulatory progress in China - new permitted health function claim
The Company has previously announced it has been working with By-Health to
support the planned launch of a number of Fruitflow based products in the
Chinese market, with potential volumes at a significant multiple of current
Fruitflow sales.
The planned launch of Fruitflow based products in the Chinese market has been
progressing well. Clinical studies conducted in China are typically required
to obtain the necessary regulatory clearances in China, and a significant
investment in eight separate Fruitflow studies has been undertaken at
By-Health's expense.
Five studies have been successfully completed in China, and two clinical
studies and one animal study are currently ongoing.
The five completed studies showed excellent results in use for Fruitflow, and
they provide strong evidence for its efficacy on platelet functions. The
Chinese regulatory system for functional health food ingredients such as
Fruitflow is governed by the State Administration for Market Regulation
(SAMR), China's top market regulator, and it is based on a defined list of 27
permitted health function claims which brand owners are permitted to use on
product labels.
Health function claims are based on test methods and criteria that have been
systematically evaluated and verified, and it is currently envisaged that the
existing list of 27 permitted health function claims might be reduced to a
revised list of 24 permitted claims. The SAMR provides the possibility of
adding new health function claims to the list, as long as the claim can be
evaluated and verified by the SAMR.
Under SAMR regulations functional health foods need to indicate a relationship
between a food or nutrient and a consequent health improvement which falls
under one of the permitted health function claims. This relationship must be
supported by scientific tests which are performed by the SAMR.
SAMR certified functional health foods are required to use a blue cap / blue
hat logo on their product packaging, which identifies products as approved
functional health foods.
By-Health's regulatory clearance preparations for Fruitflow were originally
focussed on obtaining blue cap health claim status for some Fruitflow based
products in China, under the existing 27 permitted health function claim
structure.
By-Health is now working on an extensive regulatory submission to the SAMR for
Fruitflow, seeking to establish a new permitted health function claim for
foods such as Fruitflow that can demonstrate an anti-platelet effect,
inhibiting platelet function and conferring beneficial effects for people who
are at risk of platelet hyperactivity-associated thrombosis - the aberrant
blood clots which lead to heart attacks and strokes.
By-Health has recently updated its website www.by-health.com/en/aboutus
(http://www.by-health.com/en/aboutus) stating that it has completed: 'Research
comprehensively in the cardiovascular health area. We have developed a new
product made with Fruitflow®, popularly known as 'natural Aspirin'. It helps
to maintain normal platelet aggregation.'
By-Health currently expects to be in a position to complete the last of its
eight studies in 2022, and it will file its regulatory submission to the SAMR
for Fruitflow at the appropriate time seeking to obtain a new permitted health
function claim which would be in addition to the currently defined list of 27
(reducing to 24) permitted claims. Subject to the timing the new anti-platelet
claim, if approved, would therefore represent the 28th - or the 25th -
permitted health function claim in China.
If By-Health is successful in obtaining a new permitted health function claim
for functional health foods such as Fruitflow that can demonstrate an
anti-platelet effect, it is currently expected that this would result in some
significant orders for Fruitflow, potentially at a multiple of current total
sales values.
Market opportunity
A study backed by scientists from the National Center for Cardiovascular
Diseases in China which was updated in 2020
(www.ncbi.nlm.nih.gov/pmc/articles/PMC7008101/#
(http://www.ncbi.nlm.nih.gov/pmc/articles/PMC7008101/) ) stated that:
· the prevalence of Cardiovascular Disease ('CVD') in China has been
increasing continuously since 2006, with approximately 290 million patients in
China who now have CVD; and
· two in five deaths in China are attributed to CVD, with CVD
remaining the leading cause of death in 2016.
In December 2020 the World Health Organisation reported
(www.who.int/news/item/09-12-2020-who-reveals-leading-causes-of-death-and-disability-worldwide-2000-2019
(http://www.who.int/news/item/09-12-2020-who-reveals-leading-causes-of-death-and-disability-worldwide-2000-2019)
): 'Heart disease has remained the leading cause of death at the global level
for the last 20 years. However, it is now killing more people than ever
before. The number of deaths from heart disease increased by more than 2
million since 2000, to nearly 9 million in 2019. Heart disease now represents
16% of total deaths from all causes. More than half of the 2 million
additional deaths were in the WHO Western Pacific region.' The WHO Western
Pacific region includes China.
By-Health's long-term goal of science-based nutrition is to achieve
'comprehensive intervention for human health' (www.by-health.com/en/aboutus
(http://www.by-health.com/en/aboutus) ), and Fruitflow is well placed to
provide such intervention in the Chinese cardiovascular health market.
DSM Nutritional Products
The Company's Alliance partner DSM Nutritional Products ('DSM') has continued
to develop the market for Fruitflow in all global markets. More than 100
regional consumer healthcare brands have now been launched by direct customers
of DSM, and a number of further regional brands have been launched through
DSM's distributor channels.
An increasing number of further commercial projects have been initiated with
prospective customers, including some prospective customers which are part of
global businesses, and the total projected annual sales value of the
prospective sales pipeline for Fruitflow continues to stand at a substantial
multiple of existing annual sales.
The Company's alliance agreement with DSM dates back to June 2010, with a
contractual term which runs to 31 December 2022.
By default from 1 January 2023 the alliance agreement: (i) permits DSM to
continue to sell Fruitflow to its existing customers, on the basis that a
royalty on Fruitflow sales, fixed at favourable market conditions, will remain
payable to the Company; and (ii) permits the Company to sell Fruitflow as an
ingredient directly to third parties, outside the existing profit sharing
arrangements.
The Agreement for Fruitflow announced in November 2021 between the Company and
By-Health falls under (ii) above, with the Company set to sell Fruitflow as an
ingredient directly to By-Health from 1 January 2023; 100% of the Company's
sales of Fruitflow to By-Health will accrue directly to the Company, and the
Company will retain all of the resulting profits.
The Company and DSM have started and remain currently engaged in constructive
negotiations working towards a new agreement. The commercial terms of the
negotiations remain confidential between the two parties, and the Company will
provide shareholders with a further update in due course.
Supply chain
Fruitflow is currently produced by outsourced third party manufacturers in
Europe, and it is intended that the Company will have direct access to these
manufacturers for its sales of Fruitflow to third parties. The Company and the
third party manufacturers are actively engaged in some ongoing production
capacity planning, looking at the steps required to scale-up the production of
Fruitflow to meet the anticipated increase in demand.
Fruitflow+ dietary supplement products
Fruitflow+ Omega-3 is available to purchase from the Company's subscription
focussed e-commerce website www.fruitflowplus.com
(http://www.fruitflowplus.com) , Amazon UK and Holland & Barrett.
The Fruitflow+ Omega-3 business grew by 34% to £76k in the period to 30
September 2021 (2020: £57k), reflecting further growth in subscriber numbers
on the www.fruitflowplus.com (http://www.fruitflowplus.com) website which
currently stand at a further new all-time high level.
In November 2020 the Company announced it had entered into a distribution
agreement with a company which is now acting as the distributor for Fruitflow+
Omega-3 in China, exclusively through the Chinese Cross-Border e-commerce
('CBEC') channel. A first test order was placed by the distributor in the year
ended 31 March 2021.
The distribution agreement in China is separate but wholly complementary to
the Company's work with By-Health, with the CBEC regulations enabling the
distributor to sell Fruitflow+ Omega-3 in China now, prior to the health
function claim which By-Health is seeking to secure.
The Company's Fruitflow+ Omega-3 direct selling business has been operating
largely as normal throughout the COVID-19 pandemic, and a further new
production run of Fruitflow+ Omega-3 capsules was completed in July 2021 thus
ensuring continued supply of the product.
The Company is seeking to expand further its commercial activities with
Fruitflow+ Omega-3 and other Fruitflow+ combination products, and it is
currently in dialogue with some other potential international direct selling
customers.
Scientific journal publications
1. In September 2020 Fruitflow was recognised in a review article by the
Frontiers in Nutrition journal
www.frontiersin.org/articles/10.3389/fnut.2020.583080/full
(http://www.frontiersin.org/articles/10.3389/fnut.2020.583080/full) which
stated that nutraceuticals such as Fruitflow may serve as:
'A safe antiplatelet prophylactic treatment for those at high risk of COVID-19
who may also be at increased risk of thrombotic complications and an
alternative to pharmacological compounds that may cause greater risk of
bleeding.'
2. In January 2021 a review article was published by the influential
journal Medical Hypotheses, a leading peer-reviewed journal which advances new
discussion and innovation in medical treatments.
The article www.sciencedirect.com/science/article/pii/S0306987720333715
(http://www.sciencedirect.com/science/article/pii/S0306987720333715) , titled
'Platelet hyperactivity in COVID-19: Can the tomato extract Fruitflow® be
used as an antiplatelet regime?' was written by Professor Asim K Duttaroy, who
was the original inventor of Fruitflow, and Dr Niamh O'Kennedy, Provexis plc's
Chief Scientific Officer.
3. In January 2021 a review article was published in the MDPI journal
Nutrients www.mdpi.com/2072-6643/13/1/144/htm
(http://www.mdpi.com/2072-6643/13/1/144/htm) .
The article, titled the 'Role of Gut Microbiota and Their Metabolites on
Atherosclerosis, Hypertension and Human Blood Platelet Function' was written
by Professor Asim K Duttaroy and it noted that emerging data suggest a strong
relationship between microbiota-derived compounds and an increased risk of
CVD, with widely accumulated data also indicating that Fruitflow may be useful
in the primary prevention of CVD. The article concluded that there is a
'strong possibility of finding new approaches to treat or prevent CVD' with
further scientific work required seeking to develop novel preventative or
therapeutic regimes.
4. In June 2021 a further review article was published in the MDPI journal
Nutrients www.mdpi.com/2072-6643/13/7/2184/htm
(http://www.mdpi.com/2072-6643/13/7/2184/htm) .
The article, titled 'Dietary Antiplatelets: A New Perspective on the Health
Benefits of the Water-Soluble Tomato Concentrate Fruitflow®' concluded that:
'Platelets have multifaceted functions which generate a complicated set of
interactions with other vascular cells, leading to many roles outside
haemostasis. As our understanding of the role of platelet activation in
response to - and in complicating - inflammatory and infectious illnesses
grow, it becomes more apparent that platelet-targeted treatments are necessary
outside the field of CVD. Dietary antiplatelets such as Fruitflow® can help
provide suitably gentle and safe yet efficacious treatments to improve public
health in response to a wide range of health challenges.'
5. In December 2021 a pilot study was published in the BMC Nutrition journal
https://bmcnutr.biomedcentral.com/articles/10.1186/s40795-021-00485-5
(https://bmcnutr.biomedcentral.com/articles/10.1186/s40795-021-00485-5) .
The study, titled 'Evaluation of the equivalence of different intakes of
Fruitflow in affecting platelet aggregation and thrombin generation capacity
in a randomized, double-blinded pilot study in male subjects' concluded that
it may be pertinent to personalise the daily intake of Fruitflow® depending
on individual platelet response.
The publication of these five articles is a significant opportunity for the
Company and DSM to promote Fruitflow further across scientific, trade customer
and consumer channels.
Intellectual property
The Company is responsible for filing and maintaining patents and trade marks
for Fruitflow as part of the Alliance Agreement with DSM, and patent coverage
for Fruitflow now includes the following patent families which are all owned
outright by Provexis:
Patent family Developments in the period from Oct-21 to Dec-21
Improved Fruitflow / Fruit Extracts
Improved Fruitflow / Fruit Extracts, with patents granted by the European A Patent has proceeded to grant in the Philippines.
Patent Office in January 2017 and September 2020. Broad national coverage has
been secured.
The patent has been granted in eleven other major territories to include China
and USA.
Applications are at a late stage of progression in a further eight global
territories, with potential patent protection out to November 2029.
Antihypertensive (blood pressure lowering) effects
This patent was originally developed in collaboration with the University of A Canadian patent application has proceeded to grant.
Oslo, and it has now been granted for Fruitflow in Europe, the US and three
other major territories. Patent applications are being progressed in a further
three major territories to include the US and China, with potential patent
protection out to April 2033.
In August 2020 the Company announced it had agreed to purchase the background
and joint foreground blood pressure lowering IP owned by Inven2 AS, the
technology transfer office at the University of Oslo, and Provexis now owns
these important patents outright, with the licensing option originally held by
Inven2 having been cancelled.
Fruitflow with nitrates in mitigating exercise-induced inflammation and for
promoting recovery from intense exercise
Patents have been granted around Europe and in the US, Australia, Brazil,
China, Hong Kong, Israel, Japan, South Korea, the Philippines, New Zealand and
Mexico. Further patent protection is being sought in six territories, with
potential patent protection out to December 2033.
Fruitflow for air pollution
The use of Fruitflow in protecting against the adverse effects of air An Indonesian patent application has been accepted for grant.
pollution on the body's cardiovascular system.
Laboratory work has shown that Fruitflow can reduce the platelet activation
caused by airborne particulate matter, such as that from diesel emissions, by
approximately one third.
A US patent has granted; an Indonesian patent application is proceeding to
grant; and there are pending applications in 15 jurisdictions (including the
US where a further application has been filed) which extends potential patent
protection for Fruitflow out to November 2037.
Outlook
We were delighted to announce a supply and distribution agreement for
Fruitflow with By-Health in November 2021, which follows our extensive work
with By-Health over the last five years. The agreement will take full effect
from 1 January 2023.
By-Health currently expects to be in a position to complete the last of its
eight studies in 2022, and it will file its regulatory submission to the SAMR
for Fruitflow at the appropriate time, seeking to obtain a new permitted
health function claim for foods such as Fruitflow that can demonstrate an
anti-platelet effect. If By-Health is successful in obtaining a new permitted
health function claim, it is currently expected that this would result in some
significant orders for Fruitflow, potentially at a multiple of current total
sales values.
Fruitflow is well placed to play an important role in the Chinese
cardiovascular health market under the permitted health function claim
legislation, and we look forward to working closely with By-Health seeking to
maximise the commercial success of this agreement for the benefit of both
companies.
The Company and DSM have had a strong long-term relationship, with the shared
interest of both companies being to maximise the commercial returns that can
be achieved from Fruitflow. The total projected annual sales value of the
prospective sales pipeline for Fruitflow continues to stand at a substantial
multiple of existing annual sales.
The Alliance Agreement with DSM dates back to June 2010, with a contractual
term which runs to 31 December 2022. By default from 1 January 2023 the
agreement: (i) permits DSM to continue to sell Fruitflow to its existing
customers, on the basis that a royalty on Fruitflow sales, fixed at favourable
market conditions, will remain payable to the Company; and (ii) permits the
Company to sell Fruitflow as an ingredient directly to third parties, outside
the existing profit sharing arrangements.
The Company and DSM have started and remain currently engaged in constructive
negotiations working towards a new agreement. The commercial terms of the
negotiations remain confidential between the two parties, and the Company will
provide shareholders with a further update in due course.
The Company has developed a strong, long lasting and wide-ranging patent
portfolio for Fruitflow, and it owns four outright patent families for
Fruitflow which have a truly global footprint. The Company also holds other
valuable intellectual property and trade secrets for the technology. The
intellectual property for Fruitflow is of fundamental importance to the
Company and its current and future commercial partners, to include DSM and
By-Health, and it underpins the numerous commercial opportunities which the
Company and its partners are pursuing for Fruitflow.
The Company would like to thank its customers and shareholders for their
continued support, and the Board remains positive about the outlook for
Fruitflow and the Provexis business for the second half of the financial year
and beyond.
Dawson
Buck Ian
Ford
Chairman CEO
Consolidated statement of comprehensive income Unaudited Unaudited Audited
Six months ended 30 September 2021 six months six months year
ended ended ended
30 September 30 September 31 March
2021 2020 2021
£ £ £
Notes
Revenue 211,195 237,075 505,330
Cost of goods (24,287) (20,728) (49,136)
Gross profit 186,908 216,347 456,194
Selling and distribution costs (24,170) (22,956) (48,689)
Research and development costs (140,866) (135,171) (303,898)
Administrative costs (including share based payment charges) (167,101) (262,104) (465,523)
R&D tax relief: receivable tax credit 650 1,590 2,460
Underlying operating loss (116,540) (95,480) (224,756)
Share based payment charges - share options (28,039) (28,039) (55,925)
Share based payment charges - blood pressure IP - (78,775) (78,775)
Loss from operations (144,579) (202,294) (359,456)
Finance income 40 87 113
Loss before taxation (144,539) (202,207) (359,343)
Taxation - - -
Loss and total comprehensive expense for the period (144,539) (202,207) (359,343)
Attributable to:
Owners of the parent (130,164) (187,832) (341,007)
Non-controlling interests (14,375) (14,375) (18,336)
Loss and total comprehensive expense for the period (144,539) (202,207) (359,343)
Loss per share to owners of the parent
Basic and diluted - pence 3 (0.01) (0.01) (0.02)
Consolidated statement of financial position Unaudited Unaudited Audited
30 September 2021 30 September 30 September 31 March
2021 2020 2021
Notes £ £ £
Assets
Current assets
Inventories 107,640 80,997 60,576
Trade and other receivables 94,349 142,177 140,923
Corporation tax asset 14,610 13,090 13,960
Cash and cash equivalents 981,657 156,272 1,077,410
Total current assets 1,198,256 392,536 1,292,869
Total assets 1,198,256 392,536 1,292,869
Liabilities
Current liabilities
Trade and other payables (172,568) (169,248) (150,681)
Total current liabilities (172,568) (169,248) (150,681)
Net current assets 1,025,688 223,288 1,142,188
Total liabilities (172,568) (169,248) (150,681)
Total net assets 1,025,688 223,288 1,142,188
Capital and reserves attributable to
owners of the parent company
Share capital 2,210,822 2,070,822 2,210,822
Share premium reserve 18,675,221 17,767,071 18,675,221
Merger reserve 6,599,174 6,599,174 6,599,174
Retained earnings (25,931,132) (25,703,718) (25,829,007)
1,554,085 733,349 1,656,210
Non-controlling interest (528,397) (510,061) (514,022)
Total equity 1,025,688 223,288 1,142,188
Consolidated statement of cash flows Unaudited Unaudited Audited
30 September 2021 six months six months year
ended ended ended
30 September 30 September 31 March
2021 2020 2021
£ £ £
Cash flows from operating activities
Loss after tax (144,539) (202,207) (359,343)
Adjustments for:
Finance income (40) (87) (113)
Tax credit receivable (650) (1,590) (2,460)
Share-based payment charge - share options 28,039 28,039 55,925
Share-based payment charges - blood pressure IP - 78,775 78,775
Changes in inventories (47,064) (70,913) (50,492)
Changes in trade and other receivables 46,614 (2,459) (1,374)
Changes in trade and other payables 21,887 19,171 604
Net cash flow from operations (95,753) (151,271) (278,478)
Tax credits received - 16,202 16,202
Total cash flow from operating activities (95,753) (135,069) (262,276)
Cash flow from investing activities
Purchase of blood pressure IP - cash element - - (250)
Interest received - 6 201
Total cash flow from investing activities - 6 (49)
Cash flow from financing activities
Proceeds from issue of share capital - - 1,048,400
Total cash flow from financing activities - - 1,048,400
Net change in cash and cash equivalents (95,753) (135,063) 786,075
Opening cash and cash equivalents 1,077,410 291,335 291,335
Closing cash and cash equivalents 981,657 156,272 1,077,410
Consolidated statement of changes in equity Share Share Merger Retained Total equity Non- Total
30 September 2021 capital premium reserve earnings attributable to owners of controlling interests equity
the parent
£ £ £ £ £ £ £
At 31 March 2020 2,059,322 17,699,796 6,599,174 (25,543,925) 814,367 (495,686) 318,681
Share-based charges - share options - - - 28,039 28,039 - 28,039
Share-based charges - blood pressure IP - - - 78,775 78,775 - 78,775
Issue of shares 19 August 2020 - blood pressure IP 11,500 67,275 - (78,775) - - -
Total comprehensive expense for the period - - - (187,832) (187,832) (14,375) (202,207)
At 30 September 2020 2,070,822 17,767,071 6,599,174 (25,703,718) 733,349 (510,061) 223,288
Share-based charges - share options - - - 27,886 27,886 - 27,886
Issue of shares 19 August 2020 - blood pressure IP - (250) - - (250) - (250)
Issue of shares - placing 23 December 2020 133,333 865,417 - - 998,750 - 998,750
Issue of shares - placing 25 February 2021 6,667 42,983 - - 49,650 - 49,650
Total comprehensive expense for the period - - - (153,175) (153,175) (3,961) (157,136)
At 31 March 2021 2,210,822 18,675,221 6,599,174 (25,829,007) 1,656,210 (514,022) 1,142,188
Share-based charges - share options - - - 28,039 28,039 - 28,039
Total comprehensive expense for the period - - - (130,164) (130,164) (14,375) (144,539)
At 30 September 2021 2,210,822 18,675,221 6,599,174 (25,931,132) 1,554,085 (528,397) 1,025,688
1. General information, basis of preparation and accounting policies
General information
Provexis plc is a public limited company incorporated and domiciled in the
United Kingdom (registration number 05102907). The address of the registered
office is 2 Blagrave Street, Reading, Berkshire RG1 1AZ, UK.
The main activities of the Group are those of developing, licensing and
selling the proprietary, scientifically-proven Fruitflow® heart-health
functional food ingredient.
Basis of preparation
This condensed financial information has been prepared using accounting
policies consistent with International Financial Reporting Standards in the
European Union (IFRS).
The same accounting policies, presentation and methods of computation are
followed in this condensed financial information as are applied in the Group's
latest annual audited financial statements, except as set out below. While the
financial figures included in this half-yearly report have been computed in
accordance with IFRS applicable to interim periods, this half-yearly report
does not contain sufficient information to constitute an interim financial
report as that term is defined in IAS 34.
Use of non-GAAP profit measure - underlying operating profit
The directors believe that the operating loss before share based payments
measure provides additional useful information for shareholders on underlying
trends and performance. This measure is used for internal performance
analysis. Underlying operating loss is not defined by IFRS and therefore may
not be directly comparable with other companies' adjusted profit measures. It
is not intended to be a substitute for, or superior to IFRS measurements of
profit.
The interim financial information does not constitute statutory accounts as
defined in section 434 of the Companies Act 2006 and has been neither audited
nor reviewed by the Company's auditors James Cowper Kreston pursuant to
guidance issued by the Auditing Practices Board.
The results for the year ended 31 March 2021 are not statutory accounts. The
statutory accounts for the last year ended 31 March 2021 were approved by the
Board on 29 September 2021 and are filed at Companies House. The report of the
auditors on those accounts was unqualified, and did not contain a statement
under section 498 of the Companies Act 2006.
The interim report for the six months ended 30 September 2021 can be
downloaded from the Company's website www.provexis.com. Further copies of the
interim report and copies of the 2021 annual report and accounts can be
obtained by writing to the Company Secretary, Provexis plc, 2 Blagrave Street,
Reading, Berkshire RG1 1AZ, UK.
This announcement was approved by the Board of Provexis plc for release on 31
December 2021.
Going concern
The Directors are of the opinion that at 31 December 2021, the Group and
Company's liquidity and capital resources are adequate to deliver the current
strategic objectives and 2022 business plan and that the Group and Company
remain a going concern.
Accounting policies
The accounting policies applied are consistent with those of the annual
financial statements for the year ended 31 March 2021, as described in those
annual financial statements.
2. Segmental reporting
The Group's operating segments are determined based on the Group's internal
reporting to the Chief Operating Decision Maker (CODM). The CODM has been
determined to be the Board of Directors as it is primarily responsible for the
allocation of resources to segments and the assessment of performance of the
segments. The performance of operating segments is assessed on revenue.
The CODM uses revenue as the key measure of the segments' results as it
reflects the segments' underlying trading performance for the financial period
under evaluation. Revenue is reported separately to the CODM and all other
reports are prepared as a single business unit.
Unaudited Unaudited Audited
six months six months year
ended ended ended
30 September 30 September 31 March
2021 2020 2021
DSM Alliance Agreement 135,188 171,976 357,879
Fruitflow+ Omega-3 76,007 56,753 138,251
Fruitflow+ nitrates development products - 8,346 9,200
211,195 237,075 505,330
3. Earnings per share
Basic earnings per share amounts are calculated by dividing the profit
attributable to owners of the parent by the weighted average number of
ordinary shares in issue during the period.
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 would have
the effect of reducing the loss per share and is therefore anti-dilutive under
the terms of IAS 33 'Earnings per Share'.
Basic and diluted loss per share amounts are in respect of all activities.
There were 168,500,000 share options in issue at 30 September 2021 (2020:
193,500,000) that are currently anti-dilutive and have therefore been excluded
from the calculations of the diluted loss per share.
Unaudited Unaudited Audited
six months six months year
ended ended ended
30 September 30 September 31 March
2021 2020 2021
Loss for the period attributable to owners of the parent - £ 130,164 187,832 341,007
Weighted average number of shares 2,210,821,523 2,061,960,851 2,102,799,137
Basic and diluted loss per share - pence 0.01 0.01 0.02
4. Share capital and Total Voting Rights
At 31 December 2021, the date of this announcement, the Company's issued share
capital comprises 2,210,821,523 ordinary shares of 0.1 pence each, each with
equal voting rights. The Company does not hold any shares in treasury and
therefore the total number of ordinary shares and voting rights in the Company
is 2,210,821,523.
The above figure may be used by shareholders in the Company as the denominator
for the calculations by which they will determine if they are required to
notify their interest in, or change to their interest in, the share capital of
the Company under the FCA's Disclosure Guidance and Transparency Rules.
5. Cautionary statement
This document contains certain forward-looking statements with respect to the
financial condition, results and operations of the business. These statements
involve risk and uncertainty as they relate to events and depend on
circumstances that will incur in the future. Nothing in this interim report
should be construed as a profit forecast.
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