DEESIDE, Flintshire, U.K., Oct. 23, 2003 (PRIMEZONE) -- Provalis PLC: At todays Annual General Meeting of Provalis plc (LSE:PRO) (Nasdaq:PVLS), the Medical Diagnostics and Pharmaceuticals Group, Frank Harding, Chairman, made the following statement.
"Our results to 30th June 2003 were presented in the first week of September. They demonstrated that 2003 had been a strong year for Provalis, with progress being made by both our medical diagnostic and pharmaceutical businesses. Sales by medical diagnostics increased substantially on the back of Glycosal(R)'s penetration of the key US diabetes market, and pharmaceutical's sales and profits grew significantly, led in particular by those of our anti-arthritis drug Diclomax(R). The Group managed its cash aggressively, reduced its operating loss substantially and reported its first year of net profit, albeit following the recognition of an exceptional profit from the variation of the distribution agreement with Dr Falk Pharma.
Group sales in the first quarter were just over GBP3m, lower than both expectations and the GBP3.5m in the same period last year. However, it should be remembered that the first quarter last year was dominated by the one-off sales of Glycosal(R) instruments and test cartridges to Abbott Laboratories of approximately GBP0.4m. Although our cash position remains healthy, with cash above expectations, we do anticipate that this sales shortfall will affect the result for the first half of the year.
Sales by the pharmaceutical business were marginally below those of the same quarter last year. The remainder of the year should, however, see sales growth, helped by the launches during November of Diclomax(R) onto the Irish market and a new, high strength, version of Salofalk(R) onto both the UK and Irish markets.
We are in discussions with several companies concerning the acquisition, or in-licensing, of new products for the pharmaceutical business, some of which are at an advanced stage. We are also pursuing innovative co-marketing deals on products, particularly for the Ireland market. We hope to make further announcements on these initiatives later in the year.
As mentioned in our Preliminary Results, medical diagnostic's sales to its distributors, particularly of Glycosal(R) cartridges, were slower in July and August, and although they picked up again in September, overall sales for the first quarter are below expectations and those of last year. This is not that surprising given the sales last year to Abbott.
More encouragingly, our distributors have reported to us that they themselves have had stronger Glycosal(R) sales in the July to September period than in the previous 3 months, with approximately 1,000 instruments placed in the US alone and the important repeat orders for test cartridges continuing to build steadily. Much of this demand was supplied from stock held within the extended supply chain which is comprised of our distributors and their multiple sub-distributors. Outside the US, our distributors have also informed us that Glycosal(R) has been introduced into India during October and is continuing its roll-out in Japan, both significant diabetes markets.
Overall, the Board expects the success of Glycosal(R) to continue and we are anticipating increased shipments from October onwards.
Good progress has been made towards completing the development of G5, our new, fully automated diagnostic test platform, which will initially be used in HbA1c testing. The first instruments came off the production line in the Far East in the last week, and are to go through extensive quality and operational validation before being prepared for the multi-stage clinical trials to be carried out in readiness for our US FDA, and other, regulatory submissions. An introduction day for the product will be held for industry analysts and technical press in the next few months.
Our key goals for the future remain clear:
- To maximise sales by, and profits from, our medical diagnostic and pharmaceutical businesses;
- To complete the development of G5, to secure robust product supply and obtain US FDA, and other, regulatory approvals, and to commence marketing of G5 during calendar 2004; and
- To identify and complete the acquisition or licensing-in of new products for our pharmaceutical business.
Achievement of these goals will further Provalis' progress towards becoming a stable, significant and growing diversified healthcare company.
A further update on Provalis' progress will be given at the announcement of our interim results, which are due in March 2004".
All resolutions proposed at the AGM were duly passed.
END
Provalis' Internet Website ; http://www.provalis.com
"Safe Harbor" Statement under the US Private Securities Litigation Reform Act of 1995: Statements in this announcement that relate to future plans, expectations, events, performances and the like are forward-looking statements as defined in the US Private Securities Litigation Reform Act of 1995. Actual results of events could differ materially from those described in the forward-looking statements due to a variety of factors. Such factors include, among others: the viability of the Group's products, which are at various stages of development; the generation of sufficient operating cash flow by the Group's pharmaceutical and medical diagnostic businesses to finance the ongoing development of these businesses as well as the Group's research and development activities; the success of the Group's research and development strategy and activities; uncertainties related to future clinical trial results and the associated regulatory process; the execution and success of collaborative agreements with third parties; availability and level of reimbursement for the Group's products from government health administration authorities or other third-party payors; the rate of net cash utilisation within the Group and, hence, the Group's possible need for additional capital in the short, medium and/or long term; the Group's intellectual property position and the success of patent applications for its products and technologies; the Group's dependence on key personnel; general business and economic conditions; the impact of future laws, regulations and policies; stock market trends in the Group's sector; and other factors beyond the Group's control that may cause the Group's available capital resources to be used more quickly than expected. These and other factors that could affect the Company's future results are more fully described in its filings with the US Securities and Exchange Commission, in particular the latest 20-F filing, copies of which are available from the Company Secretary at the Company's registered address.
Notes to Editors
Provalis plc (LSE:PRO and NASDAQ:PVLS) is a diversified healthcare company with two operating businesses:-
- Medical Diagnostics - develops and sells to world markets medical diagnostic products for chronic disease management. The division's principle products are Glycosal(R) and Osteosal(R) in the areas of diabetes and steoporosis respectively.
- Pharmaceuticals - sells and markets its own, and third party, branded, prescription medicines in the UK and Ireland to GPs and hospitals through its own regionally managed sales force. The division's principle product is Diclomax(R), a medicine for use in the treatment of musculo-skeletal disorders, and it also sells products in the areas of gastroenterology, osteoporosis, migraine and dermatology.
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