Home' Acrux Annual Report : Acrux Annual Report 2017 Contents Directors' report continued
The consolidated loss before tax was $0.094 million primarily attributable to a non-cash impairment loss of $10.680 million (2016: profit
$18.092 million). The consolidated loss after tax was $0.243 million (2016 profit: $12.981 million).
Revenue for the financial year decreased by $4.6 million (16.1%) to $23.9 million (2016: $28.6 million). Royalty revenue from Axiron®
decreased 10% to $22.8 million (2016: $25.3 million) reflecting a decline in Axiron® global sales by Eli Lilly and Company. On a constant
currency basis royalty revenue from Axiron® declined 6.1% or $1.4 million. No milestone revenue was received for the financial year
compared to milestone revenue of US$2.0 million received from Gedeon Richter for Lenzetto® approvals in Europe during the prior
financial year. Interest on cash deposits was $0.6 million (2016: $0.5 million).
Total expenses for the financial year were $24.028 million (2016: $10.465 million) comprising of: a) a non-cash (pre-tax) loss of
$10.680 million in relation to the impairment of Axiron® capitalised development costs, and b) operational expenditure of $13.348 million.
The impairment loss is a result of a re-assessment of the estimated future discounted cash flows from the Axiron® product utilising current
market data for the Testosterone market in the United States and the generic market penetration since 6 July 2017.
Total operating expenditure for the financial year increased by 27.6% to $13.3 million (2016: $10.5 million). The increase represents
progression of and increased investment in research and development (R&D). The R&D is consistent with our announced strategy to
commercialise topical generic opportunities.
Employee benefits increased to $4.3 million (2016: $3.6 million) reflecting the increased resources required for our development pipeline.
Remaining expenses totalled $9.0 million (2016: $6.9 million), with increases in external research and development costs of $1.8 million
for contract manufacturer engagement and API procurement for the manufacture of exhibit batches. In addition, professional fees of
$1.2 million were incurred associated with the execution of our IP strategy. These increases were partially offset by lower royalty payments
to Monash Investment Trust of $0.1 million (2016: $1.0 million). Foreign exchange loss of $0.5 million was incurred (2016: $0.8 million).
Income tax expense of $0.149 million (2016: $5.111 million) was recorded for the financial year. The reduction on the prior financial
year is attributable to the lower operating profit (excluding the impairment loss) and the reversal of the deferred tax liability associated with
the impaired portion of Axiron® capitalised development costs not being realised as initially contemplated. Further details of the income tax
expense are provided at Note 1(j) of the Financial Report.
Cash received from licensing agreements for the financial year was $21.8 million (2016: $28.2 million, which included a Lenzetto®
milestone receipt of USD$2.0 million). Royalties received from Axiron® were down 16% to $21.5 million reflecting lower sales generated by
Eli Lilly and Company. The Company paid $10.7 million to suppliers and employees (2016: $7.9 million) as a consequence of increased
investment in our R&D pipeline. Interest received on cash reserves was $0.6 million (2016: $0.5 million) due to higher average cash
reserve balances during the financial year. This is consistent with the Company's strategy of preserving cash to fund the development
of our generic portfolio. Income tax payments increased to $6.3 million from $4.3 million in the prior financial year primarily attributable
Capital expenditure was $0.6 million, up 166.9% on the prior financial year as the Company carried out upgrades on existing equipment
and improved our internal analytical and testing capabilities.
Cash reserves at the end of the period were $34.0 million (2016: $29.4 million).
There were no changes to contributed equity during the financial year.
The number of outstanding employee share options on issue at the date of this report was 4,774,000 (30 June 2016: 4,794,000),
representing 2.9% of the Company's issued share capital. Further details of share based payments are provided in Note 16 of the Financial
Report which follows the Directors' Report.
16 | Acrux Annual Report 2017
Links Archive Acrux Annual Report 2016 Navigation Previous Page Next Page