Lombard Medical Technologies PLC : - Half Yearly Report

Lombard Medical Technologies PLC

Lombard Medical Technologies PLC

("Lombard Medical" or "the Company")

Interim results for the six months ended 30 June 2012

London, UK, 30 August 2012- Lombard Medical Technologies PLC (AIM:LMT), the specialist medical technology company focussed on innovative vascular products, today announces its unaudited interim results for the six months ended 30 June 2012.

Operational highlights

·      Demand for Aorfix™ increased 23% in the four main EU markets (UK, Germany, Italy and Spain) with 195 patients treated (H1 2011: 158 patients)

·      Total revenues increased 9% to £2.0m (H1 2011: £1.8m)

·      Aorfix™ sales increased 11% in the four main EU markets to £1.0m (H1 2011: £0.9m)

o  53% growth in Germany reflecting expansion of direct sales team

·      US regulatory approval submission on track; response to FDA including additional data analyses submitted in July 2012

·      High angle clinical data from US PYTHAGORAS trial presented in June 2012

o  Strong data despite extremely challenging patient group with high neck angles

·      Launch of AorflexTM delivery system in April

o  Encouraging clinician feedback from initial procedures

·      Key hire - appointment of Ian Ardill to the Board asChief Financial Officer in January 2012

o  Significant financial, medical device, business development and international experience

Financial highlights

·      Total commercial revenues increased 15% to £2.0m (H1 2011: £1.7m)

·      £3.0m raised from issue of convertible loan notes to Invesco in March 2012

·      Operating loss reduced by £0.6m to £4.4m (H1 2011: £5.0m)

·      Loss after taxation for the period steady at £4.4m (H1 2011: £4.4m)

·      Cash of £5.2m as at 30 June 2012 (30 June 2011: £12.1m)

Commenting on the results, Simon Hubbert, Chief Executive of Lombard Medical, commented:

"During the period we made significant progress against a number of objectives set out at the start of the year and reported double digit commercial revenue growth despite weakness in the Eurozone and challenging market conditions. In Europe we launched our AorflexTM delivery system which has been well received by clinicians and reported sales growth of +50% in Germany. Our submission for AorfixTM is with the regulators and we continue to anticipate US approval later this year."

About Lombard Medical

Lombard Medical Technologies PLC (AIM: LMT), is a medical device company focused on device solutions for the $1.2 billion dollar per annum abdominal aortic aneurysm (AAA) repair market. AAAs are a balloon-like enlargement of the aorta which, if left untreated, may rupture and cause death. Approximately 4.5 million people are living with AAAs in the developed world and each year 600,000 new cases are diagnosed. The market for endovascular stent grafts for this application is expected to grow to $1.6 billion by 2015. The Company's lead product, Aorfix™, is an endovascular stent graft which has been specifically designed to solve the problems that exist in treating complex tortuous anatomy which is often present in advanced AAA disease. Aorfix™ is currently being commercialised in the EU, and has been submitted to the FDA for approval in the US.

The Company is headquartered in Oxfordshire, with operations in Ayrshire and Phoenix, USA.

Further background on the Company can be found atwww.lombardmedical.com .

For further information:

Lombard Medical Technologies PLC	Tel: [phone]
Simon Hubbert, Chief Executive Officer Ian Ardill, Chief Financial Officer
Canaccord Genuity Limited Jamie Adams / Mark Dickenson / Lucy Tilley	Tel: [phone]
FTI Consulting Simon Conway / Susan Stuart / Victoria Foster Mitchell	Tel: [phone]

Chief Executive's Review

In the first half of 2012 the Company continued to make significant progress against our strategic objectives to secure US FDA approval of Aorfix™, increase product adoption in Europe and advancement of next generation Aorfix™ products.  Demand for Aorfix™ increased 23% with 195 patients treated in the four main EU markets (UK, Germany, Italy and Spain) compared to 158 in the same period last year.  US approval, if received this year as anticipated, will trigger receipt of the second tranche of £14.2 million (£13.6 million net of expenses) from the fundraising completed in May 2011. The Company also launched its new Aorflex™ delivery system and is on track to introduce an expanded size range for Aorfix™ in Europe in Q1 2013.

Revenue

Total company revenue grew 9% to £2.0m (H1 2011: £1.8m). Total revenues consist of commercial revenues, which increased 15% to £2.0m (H1 2011: £1.7m), and US clinical trial revenues, which decreased 81% to £0.0m (H1 2011: £0.1m), following the cessation of trial enrolment in 2011. 

Revenue in the main four EU markets (UK, Germany, Italy and Spain) grew 11% to £1.0m (H1 2011: £0.9m).  This revenue growth does not fully represent the increase in case numbers as distributors in Spain and Italy reduced their inventory holding in response to government austerity measures. We are confident that we have seen the majority of this inventory effect and we therefore expect to see higher sales in the EU in H2 2012.

Sales in Germany were strong with growth of 53% reflecting the impact of the expanded direct sales team put in place in 2011 whilst sales in the UK grew by 6%.  UK growth was hampered by a later than expected launch in April of the new Aorflex™ delivery system and by a reduction in the number of UK centres performing Endovascular Aortic Repair in line with Government policy of creating specialist centres.  The new Aorflex™ delivery system is now fully available in Europe and has received encouraging clinician feedback. Continued adoption of this enhanced delivery device is expected to positively impact Aorfix™ sales in the second half. In France we continue to work with the regulatory authorities to achieve reimbursement approval for Aorfix™.

Commercial Aorfix™ revenues outside of the main European markets increased by 11% driven largely by strong growth in Latin America whilst commercial sales from our Lombard Medical Scotland facility increased 33%.

Aorfix™ Regulatory Approval in the US

The US is the largest market in the world for the endovascular repair of abdominal aortic aneurysms ("EVAR") and is estimated to be currently worth over $600m.  FDA approval to sell Aorfix™ in the US is therefore a key value driver for the Company.

The Company is seeking the US approval for Aorfix™ to include a label indication for the treatment of patients with angulations at the neck (top) of the aneurysm of up to 90 degrees.  If achieved, this would give Aorfix™ the broadest label for such a device on the US market and the only endovascular stent graft licensed for use in high angle (>60 degrees) cases.  Such a high angle indication can already be found on the European label for Aorfix™.  It is estimated that approximately 30% of all patients have some tortuosity either at the neck of the aneurysm or in the iliac arteries, and it is to this segment of patients that Aorfix™ is targeted with its uniquely flexible design.

In January 2012 the final clinical module for US approval was accepted for review by the FDA. The FDA also gave approval for 50 additional patients to be treated with Aorfix™ under a 'continued access' programme allowing clinical trial sites to continue using Aorfix™ while the PMA (Premarket approval) is being reviewed. As announced in May 2012 the FDA requested further analysis of the existing data set which was submitted in July 2012. The FDA has since carried out audits of our US facility in Arizona and 3 clinical trial sites in H1 2012 with no major findings.

Aorfix™ Clinical Results in the US

In June the company announced the high angle clinical data results from the US PYTHAGORAS trial.  The unique data set, presented at the Society of Vascular Surgery (SVS) Annual Meeting on 7-9 June in the USA by Dr Mark Fillinger of Dartmouth Hitchcock Medical Centre, featured results from the world's first multi-centre, controlled EVAR (Endovascular Aortic Repair) clinical trial studying patients with angles greater than 60 degrees.  205 patients were recruited in the trial and the data resulted from 143 patients with highly-angulated aortic necks (angles between 60 and 110 degrees).  Treatment of this patient group is not indicated in any stent grafts currently available in the USA. Data on the 62 patients in the "roll-in" group (angles under 60 degrees) had been presented in November 2011.

The data showed that Aorfix™ performed well in extreme, more difficult to treat, aortic neck angulations.  Outcomes such as freedom from major adverse events (MAEs, as defined by the SVS) at 30 days and 365 days, were significantly lower than in patients undergoing open surgical repair (81.1% vs. 56.4% p<0.0001 and 75.5% vs. 54.5% p<0.0001 respectively).  Although not tested in the trial, Dr Fillinger noted that the outcomes were similar to EVAR trials of other stent grafts in much less severe anatomy.

RoW Aorfix™ Update

In Japan we continue to work with our experienced distribution partner, which is in dialogue with the Japanese PMDA ('Pharmaceuticals and Medical Devices Agency') to achieve regulatory approval for AorfixTM, which we anticipate will be granted around 12 months after US approval.

New Product Development

Lombard Medical has made progress across two new product development projects in line with our continuous commitment to providing innovative endovascular solutions which meet clinicians' needs and improve patient outcomes.

The first project is focused on improving clinicians' experience during Aorfix™ stent graft delivery.  The new delivery system, Aorflex™, launched in April, introduces a number of enhanced features with clear clinical benefits.  Initial clinician feedback has been extremely encouraging with greater adoption expected in the second half of 2012. Regulatory approval in the US will be sought following receipt of FDA approval for the current AorfixTM device and delivery system.

The Company has also made significant progress towards expanding the size range of Aorfix™, which will address patients with AAA who have aortic neck diameters either too large or too small for the current product size range. This is estimated to be up to 25% of the total AAA patient population. Custom built devices in larger and smaller sizes will be available from Q1 2013.

Additional Financing

In March the Company secured an additional £3 million financing through the issue of convertible loan notes to Invesco, the Company's largest shareholder, providing additional resources to continue moving ahead with Aorfix™ and driving sales in Europe beyond Q3 2012.

Board Appointment

Lombard Medical appointed Ian Ardill to the Board as Chief Financial Officer in January 2012.  Ian has significant financial, business development and international experience and was previously Finance Director for over six years at Biocompatibles International plc, a listed medical technology company.

Outlook

The Company achieved double digit commercial revenue growth across key markets in Europe and RoW territories despite operating against a backdrop of challenging market conditions in Europe. The second half of the year will be an important period for the Company during which we anticipate further revenue growth, US FDA approval of Aorfix™ and receipt of the second tranche of funds (£14.2 million before expenses). These funds will be used to launch AorfixTM in the US; expand production capacity to meet anticipated demand and pursue key development projects.

Principal Risks and Uncertainties

The PrincipalRisks and Uncertainties faced by the Company remain as reported on page 18 of the Annual Report for the year ended 31 December 2011.

Financial Review

Total revenues for the period increased 9% to £2.0m (H1 2011: £1.8m). 

Total revenues consisted of commercial revenues, which increased 15% to £2.0m (H1 2011: £1.7m), and US clinical trial revenues, which decreased 81% to £0.0m (H1 2011: £0.1m), following the cessation of trial enrolment in 2011. 

Worldwide commercial Aorfix™ revenues increased by 11% to £1.6m (H1 2011: £1.4m), with growth in the UK and Germany offset by declines in Spain and Italy resulting from the reduction of distributor inventory levels in those countries.  There was net growth in the Rest of World, distributor markets.  Other commercial revenues increased by 33% to £0.4m (H1 2011: £0.3m) due to the increase in OEM revenues generated by the Company's Prestwick facility.

The gross profit of £0.6m (H1 2011: £1.0m) represented a gross margin of 30% (H1 2011: 53%).  The margin was affected by a number of issues in the period: lower production volumes following a stock build in 2011 and a temporary decline in production yields; initial unanticipated costs from the transfer of the AorflexTM delivery system into production; and the impact of high overhead levels carried forward in stock from 2011.

Selling, marketing and distribution expenses increased by 31% to £1.4m (H1 2011: £1.1m) due to increases in sales and marketing headcount and provisions made against some older debtor balances.

Research and development expenditure decreased by 23% to £2.5m (H1 2011: £3.2m) as clinical and regulatory expenditure reduced on the AorfixTM clinical trial and Aorfix™ development project expenditure was restricted in order to conserve cash.

Administrative expenses decreased by 34% to £1.1m (H1 2011: £1.6m).  A share option credit of £0.3m (H1 2011: charge of £0.0m) was accounted for, reflecting the directors' anticipation of US approval for AorfixTM in the fourth quarter of 2012; the share option performance criteria require approval by the end of the third quarter of 2012.  The remainder of the decrease in administrative expenses was due to the H1 2011 costs of the Board reorganisation.

Finance costs of £0.1m (H1 2011: £nil) were incurred as a result of the accounting for the effective interest payable on the convertible loan notes. 

The tax credit of £0.1m (H1 2011: £0.6) consisted of an estimate of £0.3m for the R&D tax credit arising in the period (H1 2011: £0.4m), plus an adjustment of £0.2m for an overestimate of the R&D tax credit in the prior year accounts (H1 2011: £0.2m for an underestimate).

The loss and total comprehensive expense for the period remained at £4.4m (H1 2011: £4.4m).

The net cash outflow from operating activities decreased by 12% to £5.1m (H1 2011: £5.8m) principally due to the lower loss before tax of £4.5m (H1 2011: £5.0m) and decreased working capital requirements of £0.5m (H1 2011: £0.9m).

Net cash used in investing activities remained at £0.1m (H1 2011: £0.1m).

Net cash flows from financing activities were £2.8m (H1 2011: £12.2m); the net proceeds of the issue of the convertible loan notes.  In H1 2011, the Company received £13.0m before expenses of £0.8m from the first tranche of the £27.2m, two-tranche placing and subscription approved by shareholders in May 2011.

The Directors continue to manage the Company's cash position closely in view of the impact of the timing of FDA approval on its on-going cash requirements. They believe that the current cash balance and anticipated cash flows in the remainder of the year will be sufficient to fund the Company beyond approval of Aorfix™, anticipated in the fourth quarter of 2012, and into the second quarter of 2013. Fourth quarter approval of Aorfix™will release the second trancheof funds, (£14.2m before expenses), from the May 2011 fundraising. The Directors hold regular discussions with the Company's major shareholders on the management of the cash position in the event of a delay in FDA approval and have also considered additional, potential sources of funding that support the going concern basis in the event of a delay in FDA approval beyond the end of 2012. In light of these considerations, the Board regards it as appropriate that these interim financial statements are prepared on a going concern basis.  

Consolidated Statement of Comprehensive Income
for the six months ended 30 June 2012 (unaudited)

		6 months ended  30 June 2012	6 months ended  30 June 2011	Year   ended  31   December  2011
	Note	£'000	£'000	£'000
Revenue	2	1,974	1,818	4,012
Cost of sales		(1,384)	(863)	(2,035)
Gross profit		590	955	1,977
Selling, marketing and distribution expenses		(1,405)	(1,072)	(2,895)
Research and development expenses		(2,490)	(3,226)	(6,571)
Administrative expenses		(1,072)	(1,632)	(3,107)
Total operating expenses		(4,967)	(5,930)	(12,573)
Impairment provision - investment		-	-	(850)
Operating loss		(4,377)	(4,975)	(11,446)
Finance income - interest receivable		18	4	59
Finance costs		(137)	-	-
Loss before taxation	2	(4,496)	(4,971)	(11,387)
Taxation	3	145	586	1,282
Loss and comprehensive expense for the period		(4,351)	(4,385)	(10,105)
Basic and diluted loss per ordinary share (pence)
From continuing operations	4	(21.58)	(0.18)	(0.31)

		30 June 2012	30 June 2011	31 December 2011
	Note	£'000	£'000	£'000
Assets
Intangible assets		2,255	2,296	2,275
Property, plant and equipment		681	242	608
Financial assets - available for sale		-	850	-
Non-current assets		2,936	3,388	2,883
Inventories		2,629	2,104	2,312
Trade and other receivables		1,265	1,448	1,465
Taxation recoverable		1,295	1,300	1,150
Cash and cash equivalents		5,188	12,117	7,545
Current assets		10,377	16,969	12,472
Total assets		13,313	20,357	15,355
Liabilities
Borrowings	5	(183)	-	-
Trade and other payables		(2,559)	(2,489)	(2,972)
Current liabilities		(2,742)	(2,489)	(2,972)
Borrowings	5	(2,478)	-	-
Non-current liabilities		(2,478)	-	-
Total liabilities		(5,220)	(2,489)	(2,972)
Net assets		8,093	17,868	12,383
Equity
Capital and reserves attributable to equity holders of the Company							Capital and reserves attributable to equity holders of the Company
Called up share capital	6	28,189	28,189	28,189
Share premium account	6	47,451	47,432	47,451
Other reserves	6	11,437	11,118	11,118
Accumulated loss		(78,984)	(68,871)	(74,375)
Total equity		8,093	17,868	12,383

		6 months ended 30 June 2012	6 months ended 30 June 2011	Year ended 31 December 2011
	Note	£'000	£'000	£'000
Net cash outflow from operating activities	7	(5,077)	(5,787)	(10,010)
Cash flows from investing activities
Interest received		18	4	59
Purchase of property, plant and equipment		(141)	(103)	(526)
Net cash flows used in investing activities		(123)	(99)	(467)
Cash flows from financing activities
Proceeds from issue of ordinary shares		-	13,004	13,004
Share issue expenses		-	(815)	(796)
Proceeds from issue of convertible loan note		3,000	-	-
Convertible loan notes issue expenses		(157)	-	-
Net cash flows from financing activities		2,843	12,189	12,208
(Decrease)/increase in cash and cash equivalents		(2,357)	6,303	1,731
Cash and cash equivalents at beginning of period		7,545	5,814	5,814
Cash and cash equivalents at end of period		5,188	12,117	7,545

	Share Capital	Share Premium	Other Reserves	Accumulated Loss	Total Equity
	£'000	£'000	£'000	£'000	£'000
At 1 January 2011	26,331	37,101	11,118	(64,530)	10,020
Loss and total comprehensive expense for the period	-	-	-	(4,385)	(4,385)
Share-based compensation	-	-	-	44	44
Issue of ordinary shares	1,858	11,146	-	-	13,004
Share issue expenses	-	(815)	-	-	(815)
At 30 June 2011	28,189	47,432	11,118	(68,871)	17,868
Loss and total comprehensive expense for the period	-	-	-	(5,720)	(5,720)
Share-based compensation	-	-	-	216	216
Share issue expenses	-	19	-	-	19
At 31 December 2011	28,189	47,451	11,118	(74,375)	12,383
Loss and total comprehensive expense for the period	-	-	-	(4,351)	(4,351)
Share-based compensation	-	-	-	(258)	(258)
Equity component of convertible loan notes (net of issue costs)	-	-	319	-	319
At 30 June 2012	28,189	47,451	11,437	(78,984)	8,093

1    Basis of Preparation of Interim Financial Information

The unaudited interim financial statements have been prepared in accordance with International Financial Reporting Standards and International Accounting Standards (collectively IFRS) as adopted by the EU including those applicable to accounting periods ending 31 December 2012 and the accounting policies set out in Lombard Medical Technologies PLC's Annual Report for the year ended 31 December 2011.  These interim financial statements have been prepared in accordance with International Accounting Standard 34 "Interim Financial Reporting". They do not include all the statements required for full annual financial statements, and should be read in conjunction with the consolidated financial statements of the Group as at 31 December 2011.

The financial information contained in this interim financial statement is unaudited and does not constitute statutory accounts as defined in section 434 of the Companies Act 2006.  The financial information for the year ended 31 December 2011 has been extracted from the Group's published financial statements for that year.  Those accounts that have been delivered to the Registrar of Companies were audited and the audit report was unqualified and did not contain a statement under section 498 of the Companies Act 2006.

The interim financial statements have been prepared on the going concern basis, which assumes that the Group will continue in operational existence for the foreseeable future.

The Group is developing its technologies for the marketplace and seeking regulatory approval in the United States for Aorfix and as such absorbs cash until sufficient funds from products sold are generated. The group agreed £27.2m of funding in May 2011, £13.0m of which was received in 2011 with the remaining £14.2m due on FDA approval of its AorfixTM product. The group has submitted all the required modules to the FDA and anticipates approval to be granted by the end of 2012. In these circumstances the directors are confident that the £14.2m would support the going concern basis of preparation of these financial statements.

The Directors have also given specific consideration to the impact if FDA approval is delayed beyond the end of 2012 and have prepared detailed cash flow forecasts on this basis.  The plans supporting these forecasts extend the sufficiency of the group's current available funding into the second quarter of 2013.  Additionally, the Directors have identified specific assets the sale of which may be possible and also hold regular discussions with major shareholders on how to manage the position in the event of a delay. Although these sources of funding are not certain, they have the potential to provide a further extension in the cash runway to support the going concern basis of preparation of these financial statements.

Based on the above, the Directors consider the going concern assumption to be appropriate and therefore the going concern basis has been adopted in the preparation of these financial statements.

2    OperatingSegment Analysis

The Group operates one segment being the Cardiovascular Devices and Medical Fabrics segment in accordance with reports used by the chief operating decision makers identified as the executive board members who take operating decisions.

Revenue by destination:	6 months ended 30 June 2012	6 months ended 30 June 2011	Year ended 31 December 2011
	£'000	£'000	£'000
United Kingdom and Europe	1,672	1,476	3,294
United States of America	29	123	153
Rest of World	273	219	565
	1,974	1,818	4,012

3    Taxation on Loss on Ordinary Activities

	6 months ended 30 June 2012	6 months ended 30 June 2011	Year ended 31 December 2011
	£'000	£'000	£'000
UK research and development claim:
- for the current year	360	430	1,150
- for the prior year	(215)	170	171
	145	600	1,321
Overseas taxation charge	-	(14)	(39)
	145	586	1,282

4    Loss per Share

Basic loss per share is calculated by dividing the loss attributable to ordinary shareholders by the weighted average number of ordinary shares.  The diluted earnings per ordinary share are identical to those used for the basic earnings per ordinary share as the exercise of share options and warrants would have had the effect of reducing the loss per ordinary share and are therefore not dilutive.

Reconciliations of the losses and weighted average number of shares used in the calculations are set out below:

	6 months ended 30 June 2012	6 months ended 30 June 2011	Year ended 31 December 2011
	£'000	£'000	£'000
Loss for the period (£'000)	(4,351)	(4,385)	(10,105)
Weighted average number of ordinary shares ('000)	20,162	2,480,065	3,263,848
Basic and diluted loss per share (pence)	(21.58)	(0.18)	(0.31)

5    Borrowings

Convertible loan notes with a face value of £3m were issued to Invesco, the Company's largest shareholder, on 30 March 2012. The loan notes pay interest of 8% per annum, compounded annually and are repayable at the Company's discretion at any time until 1 July 2013. The loan notes are repayable or convertible at the holder's discretion at any time between 1 July 2013 and 1 September 2013 or on certain other events as noted in the shareholder circular dated 9 March 2012. In the case of conversion, the conversion share price is 140 pence per share.

At 30 June 2012, the amount outstanding comprised:

	£'000
Face value of convertible loan notes issued on 30 March 2012	3,000
Equity component	(337)
Issue costs relating to the liability element	(139)
Liability component on initial recognition at 30 March 2012	2,524
Interest expense	137
Interest paid	-
	2,661
Included in current liabilities	183

The outstanding liability on the convertible loan notes was valued at a discount rate of 18%, considered a market rate for an equivalent non-convertible loan and the excess liability has been treated as an equity component and credited to other reserves. 6    Equity On 27 March 2012 a general meeting of the Company approved a share consolidation of one new ordinary share of 20 pence for every 200 existing ordinary shares of 0.1 pence.  The Record Date for the consolidation was 27 March 2012 i) Share capital

	30 June 2012		30 June 2011		31 December 2011
	Number of shares 000s	Nominal Value £'000	Number of shares 000s	Nominal Value £'000	Number of shares 000s	Nominal Value £'000
Allotted, called up and fully paid
Ordinary shares of 20p each	20,162	4,032	-	-	-	-
Ordinary shares of 1p each	-	-	4,032,362	4,032	4,032,362	4,032
A deferred shares of 0.862p each	373,857	3,223	373,857	3,223	373,857	3,223
B deferred shares of 1p each	136,186	1,361	136,186	1,361	136,186	1,361
C deferred shares of 0.9 p each	2,174,695	19,573	2,174,695	19,573	2,174,695	19,573
		28,189		28,189		28,189

Rights - Ordinary Shares

Voting: in a show of hands every holder has one vote and in a poll each share has one vote.

Dividends: each ordinary share has the right to receive dividends.

Return on capital: each ordinary share has the right in a liquidation of the Company's assets.

Rights - Deferred Shares

Voting: deferred shares do not entitle the holders to attend or vote at any general meeting of the Company.

Dividends: deferred shares do not entitle the holder to receive any dividend or other distribution.

Return on capital: on a winding up the holders of deferred shares are only entitled to the amount paid up on each deferred share after the holders of the ordinary shares have received the sum of £1 million for each ordinary share.

ii) Share Premium Account

This consists of the proceeds from the issue of shares in excess of their par value less associated issue costs.

iii) Other Reserves

This arose on: the conversion of convertible preference shares to ordinary shares and represents the difference between the fair value of the preference shares and the nominal value of the ordinary shares issued; and the accounting for the equity component, net of issue costs, of the convertible loan notes issued in 2012.

	6 months ended 30 June 2012	6 months ended 30 June 2011	Year ended 31 December 2011
	£'000	£'000	£'000
Loss before taxation	(4,496)	(4,971)	(11,387)
Depreciation and amortisation of licences	88	65	143
Share-based compensation expense	(258)	44	260
Impairment provision - investment	-	-	850
Net finance income	119	(4)	(59)
Increase in inventories	(317)	(410)	(618)
Decrease/(increase) in receivables	200	(382)	(399)
(Decrease)/increase in payables	(413)	(115)	368
Net cash used in continuing operations	(5,077)	(5,773)	(10,842)
Research and development tax credits received	-	-	832
Overseas taxation	-	(14)	-
Net cash used in operating activities	(5,077)	(5,787)	(10,010)

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