PIL
31/03/2016 16:49
ANNREP
NOT PRICE SENSITIVE
REL: 1649 HRS Promisia Integrative Limited
ANNREP: PIL: Audited Annual Report 31 December 2015
ANNUAL REPORT OF THE CHAIRMAN AND CHIEF EXECUTIVE
The Chairman and Chief Executive have pleasure in presenting the Annual
Report for Promisia Integrative and its subsidiaries ("the Group") for the
year ended 31 December 2015.
Promisia Integrative Group Results
The Group incurred a loss of $956,000, including non-cash expenses of $64,000
which includes interest expenses of $54,266, for the year ended 31 December
2015 (2014: $758,000 loss). While disappointing, the loss was not unexpected
due to the costs associated with building sales and product development.
Highlights from 2015
Significant increase in sales revenue
Revenue from sales of Arthrem(R) was $407,524 in fiscal 2015, representing an
88% improvement on the $216,800 recorded in the previous year. This increase
in sales since June 2015, after the preliminary positive results from
clinical trial of Arthrem(R) were made public in late May 2015, boosted
income and set the platform for growth in 2016 and beyond. In the second half
of the year sales increased by just over 150% when compared with sales in the
second half of the 2014 year. Arthrem(R) is now sold through over 600
pharmacies in New Zealand or can be purchased directly from the company's
website.
The planned commencement of direct marketing of Arthrem(R) in the US did not
proceed in 2015. The website required further expenditure of approximately
$50,000 to become fully functional. The company is now fully trained in
managing its automated digital marketing e-commerce platform rather than
using external parties. Changes to the digital marketing messages can be made
instantaneously from New Zealand as required. This measure is expected to
result in significant ongoing savings and improved marketing outcomes.
Publication of Arthrem(R) Clinical Trial Results
The results of the Otago University 12-week double blind, randomised,
placebo-controlled clinical trial were published in December in the
international peer reviewed journal, Clinical Rheumatology. The abstract from
the paper can be viewed using the following link:
http://link.springer.com/article/10.1007%2Fs10067-015-3110-z
Now that Arthrem(R) is clinically proven to be safe and effective in the
management of osteoarthritis symptoms, medical professionals are more likely
to recommend it as a treatment option for osteoarthritis. Publication of the
results also enables Promisia to register Arthrem(R) as a listed
complementary medicine in Australia.
Research and Development and New Product Expenditure
As noted in the 2014 Annual Report the company received funding for 6 months
of salary cost for a post graduate scientific intern to work on new product
development. The focus of the R&D programme in 2015 was the development of a
canine arthritis formulation and other therapeutic applications of Promisia's
proprietary extract. The objective of the formulation for canines is to be
100% palatable. A very small percentage of canines have found the bitterness
of the extract unpalatable.
During the year the company received grant income of $69,000 from Callaghan
Innovation to support its R&D work.
In 2016 the R&D focus will be on finalising the formulation and delivery form
of the canine product for osteoarthritis along with rigorous testing of this
product so that it is backed by robust scientific data.
Successful Rights Issue
In December 2015, Promisia raised $1,690,000 through a successful 6 for 10
rights issue at a price of 1 cent per share. The majority of these funds will
be used to market Arthrem(R) in New Zealand, Australia and the United States.
The cash issue resulted in the issue of 169 million new fully paid shares and
a number of new shareholders joining the share register.
The company thanks all shareholders who supported the cash issue.
Management
The company's management team was strengthened with the appointment of Liam
Harker in the role of research scientist. Liam's academic work has focused
extensively on the development and commercialisation of new technologies in
bioscience.
Dividend
The Company does not intend to pay a dividend until sustainable recurring
profits have been realised.
Outlook for 2016
While pleased with progress made last year the board and management of
Promisia are expecting to achieve significant growth in sales of Arthrem(R)in
New Zealand, and commencement of sales in Australia and the United States,
In New Zealand increased advertising commenced in February and is already
lifting sales on those achieved for the same time last year. The Company is
in the process of applying for registration in Australia as a listed
complementary medicine and is completing the necessary regulatory hurdles. In
the United States the 'business to customer' sales model based on the US
website has commenced.
A second major objective for the year is to complete development and
regulatory compliance of an arthritis treatment for canines and launch the
new product in New Zealand, Australia and the United States as soon as
possible. The pet market is significant and many dogs develop osteoarthritis,
some at a very early age.
The directors thank the shareholders for their support and look forward to
growing the company in 2016.
CO Daily Chief Executive
End CA:00280126 For:PIL Type:ANNREP Time:2016-03-31 16:49:54
