Announcement 28 August 2014
Below please find the H1 report 2014. The full report is available in the enclosed PDF file.
______________________________ The NeuroSearch Group posted an operating loss of DKK 10 million in H1 2014 (H1 2013: a profit of DKK 2 million) and a loss after tax of DKK 6 million (H1 2013: a profit of DKK 18 million). At 30 June 2014, cash and cash equivalents totalled DKK 84 million (30 June 2013: DKK 63 million). Events in Q2 and until today:
- On 8 August 2014 NeuroSearch was convicted of share price manipulation in violation of the rules of the Danish Securities Trading Act in an action brought by the Public Prosecutor for Special Economic and International Crime (SEIC). The company was concurrently ordered to pay a fine of DKK 5 million. The company's former CEO was convicted in a parallel action.
- On 18 August, NeuroSearch elected to appeal the decision of the City Court of Copenhagen to the Eastern High Court as the Board of Directors believes there is neither basis for convicting the company of share price manipulation, nor for imposing a fine of DKK 5 million. The Board of Directors further believes that it is in the interest of the company's shareholders that the matter be submitted to the High Court.
Against that background, management believes that clarification on the future of the company will have to wait until the outcome of the appeal is available. Information on when the High Court is going deal with the case has not yet been received. Update on the company’s assets The company is currently in the process of exploring the possibility of a controlled disposal of some of the remaining assets. The potential of a merger or a similar solution is also being investigated.
Clinical projects – NeuroSearch does not conduct any further development, but is trying to identify opportunities to divest the projects on an “as is” basis:
- Tesofensine for the treatment of obesity (completed Phase II)/NS2359 (completed Phase I)
- Seridopidine for the treatment of CNS disorders (completed Phase I)
- Ordopidine for the treatment of CNS disorders (completed Phase I)
Moreover the company has investments in:
- NsGene: 26.8%
- Atonomics: 17.4%
Licence agreements:
- Potential milestone payments from Teva Pharmaceuticals of up to DKK 55 million relating to the development of Huntexil®
- Potential payments from Saniona in the form of milestone payments and royalties and/or repayment of loan of EUR 340,000 (DKK 2.5 million) provided by NeuroSearch in connection with the transfer agreement entered into with Saniona in 2012
The value of the assets listed above is subject to substantial uncertainty as no established market exists for such assets. In addition, NeuroSearch calculated the value as of 31 December 2013 of its unrecognised tax losses carried forward at approximately DKK 1.8 billion, and deductible temporary differences at approximately DKK 0.5 billion, or a total of DKK 2.3 billion. Under certain conditions, the unrecognised tax assets may be exploited in full or in part by a potential buyer of NeuroSearch.
Outlook for 2014 In 2014, NeuroSearch expects an operating loss of approximately DKK 15 million, as the company has elected to retain the DKK 5 million provision for the fine imposed by the City Court of Copenhagen, although the decision has been appealed. This does not include any loss or profit arising out of a potential sale NeuroSearch's remaining assets. Allan Andersen CEO Contact person Allan Andersen, CEO, mobile+45 4016 3864
