Syntopix Group plc - Preliminary results for the financial year ending 31 July 2009
07 Jan 2010
Syntopix Group plc (AIM: SYN), the speciality research group focused on topical antimicrobial innovations for products in the medicine and consumer healthcare markets, today announces preliminary results for the financial year ending 31 July 2009.
Highlights
Second 12 month exclusive evaluation agreement signed with a major consumer healthcare company
Continued collaboration with Procter & Gamble under joint development agreement
Positive clinical results for lead dermatological compound in Phase II cosmetic study of acneic skin
Turnover increased by 34.8% to £190,000 (2008: £141,000) following further commercial agreements entered into during the year with operating losses reduced by 17.5% to £1.29m
Planned equity issue during the current financial year in order to fully progress commercial opportunities
Dr Stephen Jones, Chief Executive Officer, commented: "I am delighted to report on a year of continued progress for Syntopix Group. The Group has now established links with two of the world's largest consumer healthcare companies from which we envisage generating revenue streams in the near future. The successful Phase II cosmetic study completed after the year end is a significant milestone for the Group and will contribute to Syntopix entering into further commercial agreements.
"The Group is now focussing strategically on the commercial development of its three leading products which each have multiple potential applications in skincare, hair care and oral care."
For further information, please contact:
Syntopix Group plc
Dr Stephen Jones, Chief
Executive Officer
+44 (0)845 125 9204
www.syntopix.com
Zeus Capital Ltd
Ross Andrews
/ Bobby Fletcher Tel: +44(0)161 831 1512
www.zeuscapital.co.uk
Media enquiries:
Abchurch Communications
Sarah Hollins /
Simone Elviss
Tel: +44 (0) 20 7398 7728
simone.elviss@abchurch-group.com
Notes to editors:
Syntopix is a specialised research and development business, focusing on topical antimicrobial innovations for products in consumer healthcare and pharmaceutical markets. The Group was founded in 2003 as a spin-out from the University of Leeds by Dr Jon Cove and Dr Anne Eady, two of the world's leading experts in skin microbiology.
The Group's development focus is on its three leading, core compounds SYN0126, SYN1113 and SYN0017. Each has multiple potential uses across a number of large consumer healthcare markets including skincare, hair-care and oral health. Syntopix has developed strong working relationships with a number of major consumer healthcare companies including Proctor & Gamble and is now actively seeking to out-license these products to commercial partners.
Syntopix has a robust pipeline, with a growing library of over 2,200 compounds. Its strategy is to seek to reduce the risks and costs of drug discovery and development by discovering novel uses for known compounds and combinations of compounds, which have established safety profiles. The Group adopts an ongoing filing process that has resulted in 22 core patents/applications.
The Group is based at the Institute of Pharmaceutical Innovation in Bradford, giving access to the expertise in skin biology, formulation and toxicology at the universities of Bradford and Leeds.
Syntopix' shareholders include Techtran Group Limited (a subsidiary of IP Group plc), The Wellcome Trust Limited, University of Leeds Limited and Ridings Early Growth Investment Company Limited. Syntopix joined the AIM market of the London Stock Exchange in March 2006.
Chairman's and Chief Executive Officer's Statement
Introduction
The Group's strategy is to deliver clinically proven formulations to the cosmetic and consumer markets which will enable Syntopix to gain early revenue streams whilst providing 'ownable technologies' to our partners. During the year, the Board is pleased to report that the Group has achieved increased revenues of £190,000 from £141,000 in 2008 following entry into further commercial agreements. The Group continues to strengthen its relationships with potential partners and its key customers. Following close control of overheads, operating costs have been reduced, resulting in a lower operating loss this year of £1,292,000 (2008: £1,567,000).
In April 2009, the Group signed its second 12 month exclusive evaluation agreement with a major consumer healthcare company in the field of oral healthcare. The Group received an initial upfront payment at the commencement of this agreement and will receive further payments for any compounds chosen for additional evaluation.
In July 2008, Syntopix entered into a joint development agreement with Procter & Gamble, the world's largest consumer products company. Under this agreement, the Group will jointly investigate the use of its novel antimicrobial technology with the objective of improving the efficacy of one of Procter & Gamble's major brands.
Markets and opportunities
The Group's opportunities are principally in the areas of acne, oral hygiene and hair care, targeting both the medicine and consumer healthcare markets.
The prescription market for dermatological disease treatments is currently in excess of $11 billion, with the market for acne representing over $2.5 billion of these sales. The medicated skin care market is worth an additional $10 billion with sales for acne treatments in excess of another $1 billion. 51% of those who suffer from acne do not seek medical help and the Group is therefore developing compounds suitable for exploitation within the cosmetic, over-the-counter and prescription medicine markets.
Additionally, the Group believes there is a major global demand for antimicrobial compounds in the consumer healthcare market. The oral hygiene market is worth over $24 billion per annum. Statistics show that in the USA alone, around 74% of the population have an episode of gingivitis each year and the three leading brands of oral healthcare products each have annual sales in excess of $1 billion. Similarly the hair care market has global sales of $20 billion and statistics show that, for this market, 50% of the world's population have dandruff at some stage each year. The Group is discovering and developing antimicrobial compounds for the treatment of these types of widespread conditions to take advantage of these large market opportunities.
Strategy
The global markets the Group has identified are significant but, due to the restrictive cost of discovering safe compounds, there has historically been a lack of innovation. In addition, many of the antimicrobial compounds presently in use are increasingly linked to concerns about environmental toxicity and/or bacterial resistance.
Syntopix's approach is to identify and develop cost-effective alternative compounds and methodologies which overcome these problems and which reduce the high risks and costs of early compound discovery. At the same time, the Group aims to reduce the lead-time to market normally associated with conventional product development.
The Group is discovering antimicrobial compounds and synergistic combinations of compounds that already have a history of use in man. This reduces much of the risk associated with developing new compounds and speeds up the process of getting the compounds to market. Therefore these types of compounds are an attractive commercial proposition for the Group's key customers and potential partners.
The strategy therefore continues to focus upon leveraging the Group's antimicrobial compound library and intellectual property portfolio and expanding its opportunities into broader areas within dermatological and consumer healthcare markets.
In order for the Group to fully progress the above strategy, the Directors of Syntopix believe that it is appropriate for the Group to seek further funding through an equity share issue and are confident that this can be successfully achieved in the near future.
Product development
During the year Syntopix has added selectively to its library of potential development candidates, which is now in excess of 2,200 compounds. The Group has continued to use its screening process and has shown that approximately 30% of these compounds exhibit antimicrobial activity against the key organism which causes acne, Propionibacterium acnes.
Additionally, the Group has expanded its screening programmes to include the identification of antimicrobial compounds for use in consumer healthcare applications including oral care, other wound care, body odour and fungal infections. The Group is also using more sophisticated screening processes to assess the fitness-for-purpose of candidate compounds for different applications. The Group now offers bespoke compound assessments for customers with specific requirements.
Syntopix has made tremendous progress in moving its lead compounds from research into clinical development and has completed its second Phase II proof-of-concept human-use study in 70 subjects with acneic skin. Two Syntopix preparations were investigated: SYN 0126 in combination with (a) SYN0040, and (b) SYN0040 with SYN0854. These compounds can be used in cosmetic or medicinal products. The study had positive (an existing marketed product) and negative (vehicle) controls and the products were used once a day for eight weeks. SYN0126 in the presence of SYN0040 had a significant effect on both non-inflamed and total lesions after two weeks of treatment, which became highly significant after eight weeks. For both Syntopix treatments, almost 50% of the subjects had their spot count reduced by at least 33% after eight weeks. This level of efficacy, from compounds suitable for incorporation into cosmetic or over-the-counter medicines, compares very favourably to prescription medicines used to treat acne.
Additionally, the Group's proprietary laboratory screening techniques have identified a highly potent compound (SYN1113) that has great potential for the treatment of acne and because it is coloured green, and is a 'natural' compound, it offers huge consumer appeal. Plans are being prepared to test this compound in a human-use study in 2010.
Both of these opportunities are attracting considerable attention from major healthcare and skincare companies.
Intellectual property
The Group's intellectual property portfolio is critical for its success in licensing compounds and continues to grow and become more focused. The Group adopts an ongoing filing process that has resulted in 22 core patents/applications. Of these, nine are granted in the UK, three are published applications and ten are awaiting publication. Overall, the Group's portfolio has a total of 41 patents/applications across key international territories. Each case in the portfolio is continually evaluated for commercial opportunity.
Outlook
The Group is committed to developing safe and effective products for use in both medicinal and consumer healthcare markets by continuing to seek new uses for its antimicrobial expertise and through expansion of the commercial potential of its compounds. Syntopix's strategy and approach to identifying new antimicrobial compounds has created innovative opportunities for its commercial partners in the global consumer healthcare market.
The Group continues to invest in its discovery pipeline to fuel its development programmes, and take the most promising candidates into human use studies. To maximise the value of the Group's portfolio, it now needs to develop the most promising compounds into product candidates. The Board is very confident that these studies will deliver data that will convince potential partners that Syntopix's compounds have a commercial future in the treatment of dermatological and consumer healthcare conditions. The funds raised from the planned issue of equity during the current period will be used to enable the Group to fulfil and deliver this strategy.
Additionally, the agreements that have been signed with two of the world's largest consumer healthcare companies and the discussions we are having with other potential licensees, validates the Group's belief that the antimicrobial compounds within its portfolio, have a broad range of applications in these very large commercial markets. The Group enters the current year with a cash balance of £894,000 and is extremely optimistic that further beneficial commercial opportunities will result from the Syntopix programmes over the next twelve months.
R H Adams, Chairman
S P Jones, Chief Executive Officer
7 January 2010
The full text of this announcement is available on RNS.
