MELBOURNE, Australia and MENLO PARK, Calif., July 12, 2007 (PRIME NEWSWIRE) -- ChemGenex Pharmaceuticals Limited (ASX:CXS) (Nasdaq:CXSP) advises that interim financial reports for the Six Months Ended December 31, 2006, which accompany this release, have been lodged on a form 6-K with the SEC.
These reports are also available on the Company's website www.chemgenex.com and on the Australian Stock Exchange website www.asx.com.au.
Your directors submit their report for the half-year ended 31 December 2006.
DIRECTORS
The names of the company's directors in office during the half-year and until the date of this report are as below. Directors were in office for this entire period unless otherwise stated.
Mr. Brett Heading BCom LLB (Hons) ASIA, Non-Executive Chairman
Dr. Gregory Collier BSc (Hons) PhD, Chief Executive Officer & Managing Director
Mr. Kevin Dart, Non-Executive Director (Resigned February 8, 2007)
Mr. Roger Byrne LLB, Non-Executive Director (Resigned February 8, 2007)
Dr. Elmar Schnee B.Com, M.Mktg, Non-Executive Director
Dr. Dennis Brown BSc MA PhD, Executive Director
Mr. Patrick Burns BA LLB (Hons), Non-Executive Director
Mr. Peter Bradfield LLB, Non-Executive Director (Resigned 8 February, 2007)
Dr. Denis Wade BSc (Med) PhD, Non-Executive Director (Appointed 5 December, 2006 and resigned 8 February, 2007)
Mr. Daniel Janney BA MBA, Non-Executive Director (Appointed 13 February, 2007)
Dr. Geoff Brooke MBBS MBA, Non-Executive Director (Appointed 13 February, 2007)
REVIEW AND RESULTS OF OPERATIONS
A review and results of operations is contained in the Managing Directors Report and elsewhere throughout this Half Yearly Report. The financial result of the operations was a loss of $ 5,626,435 (2005: loss $4,535,407) after providing for income tax of $387,992 (2005: $nil).
AUDITOR'S INDEPENDENCE DECLARATION
In accordance with section 307C of the Corporations Act 2001, we have obtained a declaration of independence from our auditors Ernst and Young, a copy of which is attached to this report.
Signed in accordance with a resolution of the directors.
Dr. G. Collier
Managing Director
Melbourne,
22 February, 2007
INCOME STATEMENT
HALF-YEAR ENDED 31 DECEMBER 2006 CONSOLIDATED
2006 2005
$ $
---------------------------------------------------------------------
REVENUES
Research revenue 231,967 1,498,875
Finance income 311,055 131,277
-------------------------------
543,022 1,630,152
Research expenditure (3,644,652) (3,734,205)
-------------------------------
GROSS LOSS (3,101,630) (2,104,053)
Other income 233,222 153,928
Administration costs (544,198) (526,194)
Employee costs (1,093,243) (1,346,282)
Scientific advisory board
costs (61,301) (45,758)
Patent costs (296,429) (269,020)
Legal costs (17,295) (45,883)
Depreciation (135,719) (137,175)
Travel expenses (135,850) (161,101)
Accounting and audit costs (86,000) (53,869)
LOSS BEFORE INCOME TAX (5,238,443) (4,535,407)
-------------------------------
Income tax expense (387,992) --
-------------------------------
NET LOSS ATTRIBUTABLE TO
MEMBERS OF CHEMGENEX
PHARMACEUTICALS LIMITED (5,626,435) (4,535,407)
===============================
Basic loss per share (cents
per share) (3.71) (3.95)
Diluted loss per share
(cents per share) (3.71) (3.95)
Balance Sheet
CONSOLIDATED
AS AT AS AT
31 DECEMBER 2006 30 JUNE 2006
$ $
---------------------------------------------------------------------
CURRENT ASSETS
Cash and Cash Equivalents 9,884,651 15,553,696
Trade and Other Receivables 0 79,011
Prepayments 323,584 71,974
--------------------------------
TOTAL CURRENT ASSETS 10,208,235 15,704,681
NON-CURRENT ASSETS
Plant and equipment 200,189 328,820
Goodwill 16,931,750 16,931,750
--------------------------------
TOTAL NON-CURRENT ASSETS 17,131,939 17,260,570
--------------------------------
TOTAL ASSETS 27,340,174 32,965,251
--------------------------------
CURRENT LIABILITIES
Trade and Other Payables 1,583,991 1,621,865
Derivatives 98,444 --
Provision for Employee
Entitlements 170,974 153,105
Provision for Income Tax 375,984 --
Deferred revenue 7,950 185,372
--------------------------------
TOTAL CURRENT LIABILITIES 2,237,343 1,960,342
--------------------------------
NON-CURRENT LIABILITIES
Provision for Employee
Entitlements 31,128 --
--------------------------------
TOTAL NON-CURRENT LIABILITIES 31,128 --
--------------------------------
TOTAL LIABILITIES 2,268,471 1,960,342
--------------------------------
NET ASSETS 25,071,703 31,004,909
================================
EQUITY
Issued Capital 99,952,042 99,892,615
Reserves 12,568,085 12,934,283
Accumulated losses (87,448,424) (81,821,989)
--------------------------------
TOTAL EQUITY 25,071,703 31,004,909
================================
Cash Flow Statement
HALF-YEAR ENDED 31 DECEMBER 2006 CONSOLIDATED
2006 2005
$ $
--------------------------------------------------------------------
CASH FLOWS FROM OPERATING ACTIVITIES
Government grant received 70,000 --
Proceeds from research revenue 60,000 1,576,276
Payments to suppliers and
employees (6,162,439) (5,917,241)
-------------------------------
NET CASH FLOWS USED IN OPERATING
ACTIVITIES (6,032,439) (4,340,965)
CASH FLOWS FROM INVESTING ACTIVITIES
Interest received 311,055 131,227
Payments for property plant and
equipment (7,088) (8,699)
-------------------------------
NET CASH FLOWS FROM INVESTING
ACTIVITIES 303,967 122,528
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issue of shares 90,000 --
Transaction costs of previous
issue of shares (30,573) --
-------------------------------
NET CASH FLOWS FROM FINANCING
ACTIVITIES 59,427 --
NET DECREASE IN CASH HELD (5,669,045) (4,218,437)
Cash at beginning of financial
year 15,553,696 8,511,952
-------------------------------
CLOSING CASH CARRIED FORWARD 9,884,651 4,293,515
===============================
Statement of Changes in Equity
Reserves
Issued Capital Asset FX
Capital Profits Revaluation Translation
$ $ $ $
---------------------------------------------------------------------
At 30 June,
2005 84,592,891 648,540 150,447 --
Loss for six
months to
31 December,
2005 -- -- -- --
------------------------------------------------
Total income/
(expense)
for the
period -- -- -- --
Share-based
payments -- -- -- --
------------------------------------------------
At 31 December,
2005 84,592,891 648,540 150,447 --
Loss for the
six months to
30 June, 2006 -- -- -- --
------------------------------------------------
Total income/
(expense) for
the period -- -- -- --
Issue of share
capital (i) 15,723,021 -- -- --
Less cost of
issue (423,297) -- -- --
Share-based
payments -- -- -- --
------------------------------------------------
At 30 June,
2006 99,892,615 648,540 150,447 --
Foreign Exchange
Translation -- -- -- (417,428)
Loss for six
months to
31 December,
2006 -- -- -- --
------------------------------------------------
Total income/
(expense)
for the period -- -- -- (417,428)
Issue of share
capital (ii) 90,000 -- -- --
Less cost of
issue (iii) (30,573) -- -- --
Share-based
payments -- -- -- --
------------------------------------------------
At 31 December,
2006 99,952,042 648,540 150,447 (417,428)
================================================
Option Equity Accumulated Total
Premium Options Losses Equity
$ $ $ $
---------------------------------------------------------------------
At 30 June,
2005 10,866,878 428,962 (71,452,270) 25,235,448
Loss for six
months to
31 December,
2005 -- -- (4,535,407) (4,535,407)
---------------------------------------------------
Total income/
(expense)
for the
period -- -- (4,535,407) (4,535,407)
Share-based
payments -- 309,963 -- 309,963
---------------------------------------------------
At 31
December,
2005 10,866,878 738,925 (75,987,677) 21,010,004
Loss for the
six months to
30 June, 2006 -- -- (5,834,312) (5,834,312)
---------------------------------------------------
Total income/
(expense) for
the period -- -- (5,834,312) (5,834,312)
Issue of share
capital -- -- -- 15,723,021)
Less cost of
issue -- -- -- (423,297)
Share-based
payments -- 529,493 -- 529,493
---------------------------------------------------
At 30 June,
2006 10,866,878 1,268,418 (81,821,989) 31,004,909
Foreign
Exchange
Translation -- -- -- (417,428)
Loss for six
months to
31 December,
2006 -- -- (5,626,435) (5,626,435)
---------------------------------------------------
Total income/
(expense)
for the period -- -- (5,626,435) (6,043,863)
Issue of share
capital -- -- -- 90,000
Less cost of
issue -- -- -- (30,573)
Share-based
payments -- 51,230 -- 51,230
---------------------------------------------------
At 31 December,
2006 10,866,878 1,319,648 (87,448,424) 25,071,703
===================================================
(i) In May 2006 Chemgenex Pharmaceuticals Limited announced a programme of share issues to provide working capital and to continue the company's ongoing research activities-
* On May 18, 2006 16,700,000 ordinary shares were issued at 43
cents each. This issue was ratified by an Extraordinary
General Meeting of shareholders held on 16 June, 2006.
* On 1 June, 2006 1,665,170 ordinary shares were issued at 43
cents under a Share Placement Programme offered to all
shareholders
* On 16 June, 2006 18,200,000 ordinary shares were issued at 43
cents per share following approval by an Extraordinary General
Meeting of shareholders held on 16 June, 2006.
ii) On 21 December, 2006 300,000 ordinary shares were issued after options granted at the Annual General Meeting of 21 November, 2003 were exercised. Under the terms approved by share holders these options were exercised at 30 cents each and the 300,000 shares issued raised $90,000.
iii) Costs associated with the May 2006 issue not processed until after 30 June, 2006.
Notes to the Half-Year Financial Statements
31 DECEMBER 2006
1. CORPORATE INFORMATION
ChemGenex Pharmaceuticals Limited is a company limited by shares incorporated in Australia whose shares are publicly traded on the Australian Stock Exchange ("ASX") and are traded as Level 2 American Depository Receipts ("ADRs") on the NASDAQ Stock Market.
The nature of the operations and principal activities of the Group are described in note 3.
The financial report of ChemGenex Pharmaceuticals Limited (the Company) for the half-year ended 31 December, 2006 was authorised for issue in accordance with a resolution of the directors on 22 February, 2007.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The half-year financial report does not include all notes of the type normally included within the annual financial report and therefore cannot be expected to provide as full an understanding of the financial performance, financial position and financing and investing activities of the consolidated entity as the full financial report.
The half-year financial report should be read in conjunction with the Annual Financial Report of ChemGenex Pharmaceuticals Limited as at 30 June 2006.
It is also recommended that the half-year financial report be considered together with any public announcements made by ChemGenex Pharmaceuticals Limited and its controlled entities during the half-year ended 31 December 2006 in accordance with the continuous disclosure obligations arising under the Corporations Act 2001.
(a) Basis of Preparation
The half-year financial report is a general-purpose financial report, which has been prepared in accordance with the requirements of the Corporations Act 2001, applicable Accounting Standards including AASB 134 "Interim Financial Reporting" and other mandatory professional reporting requirements.
The half-year financial report has been prepared in accordance with the historical cost convention.
The financial report is presented in Australian dollars.
For the purposes of preparing the half-year financial report, the half-year has been treated as a discrete reporting period.
(b) Summary of significant accounting policies
The half-year consolidated financial statements have been prepared using the same accounting treatment as used in the annual financial statements for the year ended 30 June 2006. Australian Accounting Standards and Interpretations that were mandatory for adoption by the Group from 1 July 2006 had no impact on this half-year financial report.
3. DIVIDENDS PAID AND PROPOSED
No dividends have been paid or proposed during the six months ended December 31, 2006. (2005: Nil).
4. CONTINGENT ASSETS AND LIABILITIES
Since the last annual reporting date, there has been no material change of any contingent liabilities or contingent assets.
5. SEGMENT INFORMATION
The economic entity performs biotechnology research.
Following the acquisition of ChemGenex Therapeutics Inc. in June 2004 the economic entity's operations have been conducted in Australia and the United States of America.
Discovery and clinical research activities in oncology are managed at the Group's American offices in Menlo Park, California.
Discovery into metabolic syndrome and depression are managed from the Group's corporate head office at Geelong, Victoria, Australia.
Australia United States Total
of America
Half year to 31 December,
2006 $ $ $
Revenue
Research revenue 231,967 -- 231,967
Other revenue 233,222 -- 233,222
Inter-segment sales -- 2,271,382 2,271,382
--------------------------------------
Total segment revenue 465,189 2,271,382 2,736,571
Unallocated income and
eliminations 214,793 (2,175,120) (1,960,327)
--------------------------------------
Total consolidated revenue 679,982 96,262 776,244
Result
Segment result (5,414,743) (211,692) (5,626,435)
Inter-segment elimination 2,271,382 (2,271,382) --
--------------------------------------
Net loss for the period (3,143,361) (2,483,074) (5,626,435)
Australia United States Total
of America
Half year to 31 December,
2005 $ $ $
Revenue
Research revenue 1,498,875 -- 1,498,875
Other revenue 153,928 -- 153,928
Inter-segment sales -- -- --
--------------------------------------
Total segment revenue 1,652,803 -- 1,652,803
Unallocated income and
eliminations 131,248 29 131,277
--------------------------------------
Total consolidated revenue 1,784,051 29 1,784,080
Result
--------------------------------------
Segment result and net
loss for the period (2,150,452) (2,384,955) (4,535,407)
6. SUBSEQUENT EVENTS
On 8 February, 2007 Charter Pacific Corporation, at that time the Company's largest shareholder, announced the sale of 28,100,000 shares in ChemGenex Pharmaceuticals Limited to institutional investors including interests associated with Alta Partners and GBS Venture Partners.
On 8 February, 2007 the Company announced a placement of 17,056,377 shares at 62 cents and 5,685,459 options to interests associated with Alta Partners and GBS Venture Partners. The share issue will raise $10,574,954 in equity capital. The options will have an exercise price of 75 cents each and will expire 5 years from issue.
On 8 February, 2007 the Company announced a rights issue to eligible share holders of shares at 62 cents and 5 year options at an exercise price of 75 cents. Details of this rights issue will be provided to shareholders in due course.
Following the share transfer on 8 February, 2007 the Company accepted the resignation of the following directors- Kevin Dart, Roger Byrne, Peter Bradfield and Denis Wade.
On February 8, 2007 the Company announced that Daniel Janney and Geoff Brooke would become directors of the Company. These appointments became effective on 13 February, 2007.
Director's Declaration
DECLARATION
In accordance with a resolution of the directors of ChemGenex Pharmaceuticals Limited, I state that:
In the opinion of the directors:
(a) the financial statements and notes of the consolidated entity:
(i) give a true and fair view of the financial position as at
31 December 2006 and the performance for the half-year
ended on that date of the consolidated entity; and
(ii) comply with Accounting Standard AASB 134 "Interim Financial
Reporting" and the Corporations Regulations 2001; and
(b) there are reasonable grounds to believe that the company will be able to pay its debts as and when they become due and payable.
On behalf of the Board
Dr. G. Collier Managing Director Melbourne. 22 February, 2007