Small Cap Wrap: Month: June 2012

AIM Breakfast - Archive

19 June 2012

This week: New vision for UVEL, Forbiden allows the use of edits and a step forwards for Advanced.

Very few disruptions over the last week, with the FTSE closing at 5,480 points having opened at 5,435 points, though the AIM All Share closed 10 points lower at 673 points. Greece’s political and economic drama continued to develop during the week, and other news announced included an increase in the cost of borrowing for Spain (with the 12 and 18 month bond jumping to 5.1 per cent) from 3 per cent in May) and the UK inflation rate falling to 2.8 per cent. The week ahead sees UK unemployment figures, UK retail sales and the US rates decision all being announced.

If you would like to unsubscribe, please email enquiries@hybridan.com with “unsubscribe me”.

Disclaimer- This document, which does not constitute research, has been issued by Hybridan LLP for information purposes only- please refer to the disclaimer in full below.

ASW Full Year Results, AMEI Divestment, CFC Loan Notes, CAP Order Win, ETX Launch of Phase I trial, FBT FORscene wins sports deals, FIP FIP’s Diurnal €4.2m EU programme and Mesuro £700k of funding, HAL Green Technology expands to Indonesia, HYR Contract Win, IDG Contract Win, IGE Interims, IDH Launch of hypertension assays, IVO Investment in healthcare company, LID Launch of LiDCOrapid, NGG First generation of animal biomarker products for development of brain disorder diagnostics, ODX Collaboration deal, OMPp two acquisitions, POS Two Majors Join Project, PEBI Board Changes, PRX XX Sale to Upsher-Smith, QIH Full year results, RENE Interim Data, SID Interim Results, SCE Pre-Close Trading Statement and Issue of Shares, SUN Distribution Agreement and AGM Statement, THAL CapEx, TRT Distribution Agreement for Saudi Arabia, TSTL Trading Update, UVEL Proposed listing on US OTC, VIY Placing.

Advanced Computer Software (LON:ASW 53.5p/ £190.7m)
Advanced Computer Software, which provides software and IT services to the UK health, care and business sectors, has reported strong revenue growth of 10 per cent in its final results for the year ending February 2012. Underlying EBITDA rose by 9 per cent while strong cash conversion of 105 per cent helped net debt drop to £1.1m (2011: £31.2m). The Company has good revenue visibility, with future contracted revenues of £110m.

African Medical Investments (LON:AMEI 1.25p/£4.03m)
African Medical Investments which operates in the African healthcare sector, announced that it has agreed the sale of its wholly owned subsidiary, AMI Aviation Services (Pty) Ltd, for US$1.3m. African Medical has signed an agreement with Hotline Holdings (Proprietary) Limited to sell its entire interest in AMI Aviation, being 100 per cent of the equity and the loan account, with effect from 31 May 2012. The primary asset of AMI Aviation is a Dassault Falcon 20F-5BR medical evacuation jet and associated medical equipment. The total consideration is US$1.3m. Losses attributable to AMI Aviation since commencement of operations in March 2011 to the date of disposal totaled approximately US$2.4m. The transaction will result in an impairment loss to African Medical of approximately US$1.17m to be recognised in the results for the year ended 29 February 2012. The disposal is in accordance with the Board’s strategy of consolidating the Company’s portfolio of specialist private hospitals and improving its financial performance. In particular, the proceeds will be invested in the Company’s current portfolio of specialist hospitals and will facilitate the roll out of further medical facilities in targeted markets in sub-Saharan Africa.

China Food Company (LON:CFC 24.25p/ £17.33m)
China Food Company, the Chinese manufacturer of cooking and dipping sauces, has announced that, following approval by the majority of C Loan Note holders, it has been agreed to roll the C Loan Note into the A Loan Note. The Company currently has £1.38m of C Loan Notes outstanding and £2m of A Loan Notes, which are repayable on 3 November 2012. The C Loan Note has a conversion price of 50p and a coupon of 8.0 per cent per annum. These terms have been amended to reflect those of the A Loan Notes that carry a coupon of 10 per cent and are convertible at 32p per ordinary share. The Company has also reiterated that it remains in discussion with potential buyers of the animal feed business and expects to update shareholders shortly.

Clean Air Power (LON:CAP 12.5p/£16.89m)
The developer of Dual-Fuel(TM) combustion technology that enables heavy-duty diesel engines to operate on a combination of diesel and natural gas has won an additional order from supermarket retailer J Sainsbury PLC for 25 units of Clean Air Power’s Genesis EDGE Dual-Fuel retrofit system, expanding Sainsbury’s fleet of Dual-Fuel trucks to 50. The Dual-Fuel engines, which substantially cut fuel costs and carbon emissions, have seen substantial growth in sales, with a total of 170 orders for both the Genesis system and European OEM product so far in the year to 31 December 2012, compared to a total of 70 systems orders during the whole of 2011.

e-Therapeutics (LON:ETX 34.5p / £47.65m)
e-Therapeutics, the biotechnology company with a proprietary platform in network pharmacology, has announced the start of the Phase I trial of its compound ETS2101 as a treatment for cancer. The trial, to be conducted in California, will enrol up to 24 patients with primary brain cancer (glioma) or cancer that has spread to the brain from other sites. Successive cohorts of patients will receive increasing doses of ETS2101. The primary objective is to evaluate safety and determine an appropriate dose for Phase II development. First findings are expected in late 2012 and final results during 2013.  The brain cancer trial is one of two studies in the phase I programme for ETS2101. A second, larger trial will start shortly in the UK and will evaluate the drug in patients with a wide variety of tumour types. The decision to support a focused brain cancer trial in parallel with a broader phase I study reflects the particularly interesting data obtained from work with glioma cell lines and the ability of ETS2101, unlike many current cancer drugs, to cross the blood-brain barrier. ETS2101 (dexanabinol) is a synthetic cannabinoid previously studied in trauma patients. Its anti-cancer potential was identified by e-Therapeutics’ network pharmacology platform.

Forbidden Technologies (LON:FBT 21.5p/£18.61m)
After licensing its FORscene Cloud editing platform to YouTube in December, Forbidden Technologies has made further progress in its announced intention to enter the relatively high value sports sector. The Company has licensed FORscene for third parties to use to edit dozens of concurrent high definition sports video streams this summer. The finished videos are to be distributed through third party websites for viewing by the public across several continents. In addition, a major US TV network is using FORscene in a broadcast sports workflow. Stephen Streater, CEO, Forbidden Technologies, says: “FORscene’s scaleability and ability to edit content as it arrives in real time are well suited to sport. These applications demonstrate FORscene’s exceptional capabilities in a major sports project.”

Fusion IP (LON:FIP 46.5p/£33.87)*
University commercialisation company which turns university research into business announced that its portfolio company, Diurnal, is a major partner in a new EU collaborative research programme for the Treatment of Adrenal Insufficiency in Neonates (TAIN). The programme will, for the first time, create a regulatory approved paediatric version of hydrocortisone, specifically for neonates and infants who suffer from the rare disease adrenal insufficiency. Peter Grant, Fusion IP added: “This is a prestigious award for Diurnal who will be taking a leading role in this project. With potentially over EUR1.6M in EU contribution being allocated to Diurnal over the timeframe of the project, successful completion of the TAIN project will highlight Diurnal’s capabilities in orphan drug development.” Mesuro, the Cardiff University spin-out which sells RF testing equipment and device measurement services to the semiconductor industry, separately announced that it has completed a £700k funding round to expand overseas sales of its revolutionary RF testing equipment. Fusion IP invested £300k in the round and as a result its shareholding is 46.5 per cent. Sales of over £800k have been delivered to customers in the first half of the year, including the Company’s first sale to Japan, a key milestone for the Company.

HaloSource Inc (LON:HAL 55p/£27.67m)
HaloSource, the US based clean water technology company, has entered into a major agreement with PT.Basuki Water Indonesia which marks the Company’s entry into Southeast Asia and is expected to generate minimum sales of US$ 0.5m in the first year. Basuki will have the exclusive right for three years to sell HaloSource’s line of natural biopolymers and innovative hybrids clean water and control erosion in different industries, HaloKlear, throughout Indonesia.Martin Coles, CEO of HaloSource said: “It is truly exciting for HaloSource to expand our reach into Indonesia with Basuki. This relationship is another proof point in our strategy to build strong partnerships with leading companies like Basuki that are able to successfully deploy our environmentally friendly technologies.” WidagdoBasuki, President Director for PT.Basuki Water Indonesia, announced: “We appreciate the commitment shown by the HaloSource to helping us address Indonesia’s substantial water treatment opportunity. With a population of over 238 million people, Indonesia is the world’s fourth most populated country in the world. Basuki is becoming a major player in the market to clean up water.”

Hydrodec (LON:HYR 10.38p/£42.56m)
Hydrodec, the oil recycling specialist, has been jointly awarded a material mandate from Mexico’s national electricity utility 900,000 litres of polychlorinated biphenyl (PCB) contaminated oil. System of Energy SA DE CV (SESA) was also awarded the mandate, which sees the exporting and processing at the Group’s plant in Young, Australia. This follows a competitive tender with the Federal Electricity Commission of Mexico, with the collaboration agreement seeing that SESA sources used oil from various locations in Mexico as a feedstock for the Group, whilst Hydrodec will re-refine the Mexican used oil at Young to produce high quality SUPERFINE(TM) transformer oil and base oil. The relevant export and import permits which are required for the transportation are expected in the third quarter of 2012. This is a significant win for Hydrodec, which last year supplied 3.1m litres of SUPERFINE(TM) into Mexico last year.

i-Design (LON:IDG 34.5p/£4.87m)
I-design, the leading developer and supplier of ATM and self-service marketing solutions for the banking industry, announced a contract win with FDR Limited, a branch of First Data Corporation (First Data), a global leader in electronic commerce and payment processing, to provide its marketing software solution, joono, increasing i-design’s total licensed ATM and self-service estate from 21,500 devices to circa 28,000 devices. This follows an announcement in early June that Barclays Bank PLC and Cardtronics, Inc, existing customers of the Company, have purchased 3,000 additional software licenses.

Image Scan Holdings (LON:IGE 2.12p/£1.62m)
Image Scan, specialists in the field of real-time 3D and 2D x-ray imaging for the security and industrial inspection markets, provided interims for the 6 months to 31 March 2012 in which revenue more than doubled to £1,760,000 (2011: £772,000), and a profit before tax for the period of £6,000 (2011: loss £266,000). Both Security and Industrials demonstrated growth during the period, though the split continued to weigh in favour of Security (£1.12m, whilst Industrial brought in £640,000). Increased expenditure on marketing pushed up the overheads figure to £653,000 (2011: £582,000). With the order intake in the year to date of £2m comprising £1.3m of security sales and £0.7m of industrial, the Company is now considering investing in its engineering and sales teams to support a growth strategy to potentially help strengthen the product range and open up new market opportunities.

Immunodiagnostic Systems Holdings (LON:IDH 289p/£82.08m)
Immunodiagnostic Systems Holdings, a leading producer of manual and automated specialist diagnostic testing kits, announced the launch of two new assays for aldosterone and renin on its IDS–iSYS immunoassay system, which makes IDS-iSYS the only fully automated system on the market on which this complementary pair of assays is available. Together they have a specific role in diagnosing the most prevalent form of secondary hypertension, primary aldosteronism (also called Conn’s syndrome).The availability of these assays on the IDS-iSYS system should yield productivity gains as run times are shorter as a consequence of being the only combined automated aldosterone and renin tests that can be performed simultaneously. The company believes that adoption of these tests will increase with the potential to more than double the number of laboratories performing these assays over a three year period. The CEO of Immunodiagnostic Systems Holdings, Ian Cookson, announced: “We are very pleased to announce the launch of our aldosterone and renin assays which expands the test menu available on our IDS–iSYS system, consistent with our strategy for building a compelling specialist immunoassay menu to drive future revenue growth. These tests are the first step in taking the IDS-iSYS into new and exciting areas of growing importance.”

Imperial Innovations Group (LON:IVO 291.5p/ £290.48m)
Imperial Innovations, the technology commercialisation and investment group, has led a $28m funding round for Oxford Immunotec, alongside Invesco Perpetual and existing investors. Oxford Immunotec is a medical diagnostics company developing novel diagnostic tests in the field of immunological disease.  Spun out from the University of Oxford in 2002, Oxford Immunotec is an established international business, enjoying strong revenue growth.  Its lead product is the T-SPOT®TB test, an immunological blood test for the detection of latent tuberculosis (TB) infection.  This represents a huge opportunity, particularly in the US where certain professions have to undergo compulsory annual TB screenings and there are large populations of immunosuppressed patients, such as those with HIV or rheumatoid arthritis, for whom screening is mandated. In 2011, it increased its lab testing capacity by building a new CLIA (Clinical Laboratory Improvement Amendments) lab facility in Memphis, which allows US national coverage and rapid turnaround time. Oxford Immunotec will use the new funds to develop further its logistics, sales and delivery infrastructure in the US.  Innovations and Invesco Perpetual each invested $9.5m in this round, with existing investors including Clarus, New Leaf, DFJ Esprit, Wellington Partners, SPARK Ventures and the University of Oxford (OSEM) investing the remainder. Following the investment Imperial Innovations will hold a 7 per cent stake in Oxford Immunotec.

LiDCO Group (LON:LID 19.62p/£34.21m)
The UK-based hemodynamic monitoring company announced the formal launch of the LiDCOrapid monitor at the 59th Annual Meeting of the Japanese Society of Anaesthesiologists in Kobe. LiDCOrapid is a cardiac output monitor designed for use in the operating theatre for fluid and drug management. LiDCO said Japan is the second largest market in the world for hemodynamic monitoring, with a potential market value of $285m per annum.Dr Terry O’Brien, CEO of LiDCO, commented: “We recently announced that the LiDCOrapid monitor and associated disposable products were successfully approved by the Japanese Ministry of Health, Labour and Welfare (MHLW). This registration was very timely, allowing our partner Argon, to launch the monitor to Japanese anaesthesiologists attending their annual scientific meeting.”

NextGen Group (LON:NGG 79p/£11.45m)
NextGen Group, a London-listed diagnostics products developer, announced that it was launching its first generation of animal biomarker products for the development of brain disorder diagnostics. The new assay measures protein markers in rat cerebrospinal fluid and will expand the product offering of NextGen’s contract research subsidiary, NextGen Sciences Inc. Assays are used to discover biomarkers which are in turn used to identify the existence and progression of a disease, while biomarkers are used in clinical trials to aid in patient selection, to evaluate the effectiveness of a drug and in the development of companion diagnostics that will drive the growth of the personalised medicine market.”Assays that can discover biomarkers in animal models will enhance the drug development process within the pharmaceutical industry and could lead to reduced attrition in the drug development process.” said Barry McAleer, PhD, CEO of NextGen Sciences Inc. He also stated that the new products and those in development are attracting attention and the company is already in talks with potential clients. In 2010, the total global market for biomarkers was an estimated $13.5bn and is expected to grow to nearly $33.3bn by the end of 2015 (BCC Research).

Omega Diagnostics Group (LON:ODX 12.5p/£10.65m)
Omega, the medical diagnostics company focussed on allergy, food intolerance and infectious disease, announced that, subsequent to entering into agreements providing worldwide exclusive access to two point-of-care (POC) tests for CD4 and Syphilis developed by the Burnet Institute in Melbourne, Australia, the Company has produced the first batch of prototype CD4 tests that have passed preliminary evaluation at the Burnet Institute.
Testing for the number of CD4 T-cells is a vital component for the management and care of people suffering from HIV and is required to determine when HIV patients should commence antiretroviral treatment (ART). In addition, the World Health Organisation (WHO) recommends patients are tested at least every 6 months thereafter to monitor their health during ART. The current market for monitoring of CD4 T-cells is dominated by flow cytometry, a technique which requires expensive laboratory-based equipment, well trained laboratory technicians and cold chain storage for reagents, all requiring the test to be carried out in centralised locations.  Given this diagnostic landscape, CD4 testing remains a bottleneck to commencing ART where HIV patients living in rural areas often have difficulty in accessing a clinic and where the time between testing and reporting results can often lead to a significant patient loss to treatment. The Burnet Institute has developed a POC CD4 test that meets this unmet need and, further to the exclusive licensing agreement entered into with the Company, Omega has manufactured a first small-scale batch of prototype devices.  The Company intends to complete the technology transfer in advance of the commercial launch of the POC CD4 test at the 19th International AIDS Conference in Washington DC on 22-27 July 2012.There is still further work to do, therefore, it is not expected that there will be any revenue impact in the current financial year to 31 March 2013. Subsequent to entering into the licensing agreement for CD4, the Company and the Burnet Institute have also signed an exclusive agreement providing Omega with access to a POC test for active syphilis infections.

One Media Publishing (LON:OMPP 3.95p/£ 1.92m)*
PLUS quoted consolidators and acquirers of music and video rights announced that it has acquired under license a pop video collection already offered for download sale via iTunes. The label OVOW has traded on iTunes for several years and has over 100 pop videos featuring performances by the Moody Blues, Phil Collins, Neil Sedaka, Dusty Springfield, Gene Pitney, Iggy Pop, Santana, Eric Clapton and Elton John to name just a few. Michael Infante Chairman and CEO said: “… we are very pleased to be working with more video content as the market `warms’ to downloading video for in home entertainment as opposed to physical media. We are as committed to expanding our content in the visual arena moving forward as we have been with our audio acquisitions.”  One Media separately announced the acquisition of a USD$400,000 income yielding music catalogue for the life of copyright the income stream of various music rights.

Plexus Holdings (LON:POS 106p / £87.71m)
Plexus Holdings, the oil and gas engineering services business and owner of the proprietary POS-GRIP(R) method of well head engineering, announced that Eni S.p.A, the Italian oil and gas major, and Oil States Industries Inc. a subsidiary of Oil States International Inc., a leading USA manufacturer of capital equipment, have both signed up as additional consulting partners to Plexus’ Joint Industry Project (JIP) to develop and commercialise a new and safer subsea wellhead, utilising Plexus’ patented POS-GRIP technology. This follows previous news releases dated 21 November 2011 and 6 January 2012 announcing that Maersk Oil North Sea UK Ltd, Shell International Exploration and Production B.V., Wintershall Noordzee B.V., SafeKick Ltd, Tullow Oil, and the UK entity of the world’s largest offshore drilling company all signed up as consulting partners to the JIP.  The JIP is focussed on developing a new subsea wellhead, the HGSS(TM), to address key technical issues and requirements highlighted by regulators following the Gulf of Mexico incident in April 2010. All members of the JIP will be contributing to the design and engineering process with the intention that they potentially become end-users and commercial partners once the wellhead has been fully built, tested and commercialised. The project is anticipated to take between 18-24 months from the initiation date at a cost of approximately £1.5m to £2m. Any intellectual property generated by the project will be owned by Plexus.

Port Erin Biopharma Investments (LON:PEBI 6.5p/£2.14m)
Port Erin, the investment company focused on investing in the biotechnology and biopharmaceutical sectors, informed that Galloway Limited purchased 500,000 Ordinary Shares at a price of 7 pence per share on 15 June 2012. Galloway is wholly owned by a trust in which Jim Mellon, Chairman of the Company, has a life tenancy. Denham Eke, a Director of the Company, is a director of Galloway Limited. Following this transaction, the total Ordinary Shares in which Jim Mellon has a beneficial interest is 3,941,000, representing 11.8 per cent of the issued ordinary share capital of the Company. The Company also announced that Tom Winnifrith had stepped down from the Board with immediate effect. Accordingly the agreement as set out in the AIM Admission Document whereby T1ps Investment Management (IOM) Limited received new Ordinary Shares equivalent to 7.5 per cent. of any increase in the Net Asset Value of the Company over each quarterly period will cease forthwith. The performance fee due to Shellbay Investments Limited will continue to be on the same terms, except that Shellbay will now receive new Ordinary Shares equivalent to 14.5 per cent. of any increase in the Net Asset Value of the Company over each quarterly period.

Proximagen (LON:PRX 340p/£214.61m)
Proximagen announced that Upsher-Smith will purchase Proximagen for shares of 320 pence each in cash; and up to a further 192 pence in either cash or Loan Notes by way of a contingent value right (CVR). The Acquisition represents an immediate cash premium, excluding the CVR, of approximately 16.4 per cent. to 275 pence, being the Closing Price per Proximagen Share on 12 June 2012 (being the last Business Day prior to the date of this announcement) or 50.5 per cent. to approximately 213 pence, being the three month average Closing Price per Proximagen Share up to 12 June 2012. Commenting on the decision by the Board of Proximagen to recommend the Acquisition, Kenneth Mulvany, the Chief Executive Officer of Proximagen said: “I am delighted that the Board of Proximagen has been able to unanimously recommend the offer made by Upsher-Smith for Proximagen which potentially values Proximagen at up to £356.8m and believe that it represents a great opportunity for our shareholders, our staff and our drug development programs. This deal demonstrates that the UK biotechnology sector can, with supportive investors, bring together scientific excellence and business acumen and generate significant returns for shareholders.”

Qihang Equipment (LON:QIH 16.25p/ £9.43m)
Qihang Equipment, the machine tool and coal mining equipment supplier in China, has reported a profit, excluding the listing costs, of RMB26m (£2.6m) (2010 – RMB17m) on sales revenue of RMB262m (£27m) (2010 – RMB210m) for the year ending December 2011. At the year end, cash and cash equivalents amounted to RMB47m (£4.8m) and borrowings amounted to RMB186m (£19m). 2011 was a year of change for Qihang Equipment as it sold its legacy operations and following an acquisition became a supplier of machine tools in China. Since the year end, the slower growth in China has meant that business has been weaker than expected. In January this year, the Company also acquired a specialist coal mining equipment business in China.

ReNeuron Group (LON:RENE 3.54p/£27.47m)
ReNeuron Group, a clinical-stage stem cell business, has presented the interim data from the PISCES (Pilot Investigation of Stem Cells in Stroke) clinical trial of its ReN001 stem cell therapy for disabled stroke patients. To date, six patients have been treated in the PISCES stroke study, representing the first two of four dose cohorts and no cell-related adverse events or adverse immune-related responses were reported in any of the patients treated. The interim data being presented are from the first five patients treated, at 2 x 12 month, 1 x six month and 2 x three month follow-up points. Reductions in neurological impairment and spasticity were observed in all five patients compared with their stable pre-treatment baseline performance and these improvements were sustained in longer term follow-up.
Professor Keith Muir, SINAPSE Professor of Clinical Imaging, Division of Clinical Neurosciences at the University of Glasgow, and Principal Investigator of the PISCES study, said: “We remain pleased and encouraged by the data emerging from the PISCES study to date. The data indicate that the ReN001 treatment has a good safety profile at the doses administered thus far.” As previously announced, the company expects that the remaining higher dose cohorts in the PISCES study will have been treated within the next twelve months, leaving the company on track to submit an application for a Phase II clinical study with ReN001 during the course of 2013. Angel Biotechnology Holdings (LON:ABH 0.2p/£7.36m)* is working closely by providing material to ReNeuron for this trial and benefits directly from the success of these studies.

Silverdell (LON:SID 12.75p/£23.06m)
Silverdell, the Specialist Environmental Support Services group, announced its interim results for the 6 months to 31 March 2012, in which the Company reported a 12 per cent revenue increase, though pre-tax profits were down some 74 per cent to £274,000 (2011: £1,065,000). The reduced pre-tax profits was in part as a result of increasing administrative costs of £7.6m (2011: £6.3m) due to a variety of reasons such as management services capabilities, including specialist industrial services such as the provision of scaffolding. With a growing order book with clients such as Magnox, acquisitions being made which are helping to define the business as suitably comprehensive, and a healthy recent fundraise being completed at a premium to help fund the acquisition of EDS, the Company has a good set of foundations upon which to build the business and enter into new territories.

Surface Transforms (LON:SCE 11p/£3.51m)
Surface Transforms, one of the world’s two manufacturers of carbon ceramic brake discs for the aircraft and automotive industries, has provide a trading update for the financial year ended 31 May 2012. The Company’s turnover is expected to exceed £1m, an increase of approximately 16 per cent from last year (2011: £ 863,439), while loss before tax is expected to be lower than the prior year due to a reduction in the company’s operating and direct costs of the main ceramic brake products, in line with market expectations. In line with the Surface Transforms’ strategy of increasing its in-house production capacity, the company’s second carbon vaporisation furnace is expected to come on stream during the second half of this calendar year and will ensure that the Company’s capacity at the Ellesmere Port plant has the potential to deliver up to £3m of revenues from carbon ceramic brake discs. Management continues to focus on improving gross margins and driving the business towards the immediate objective of cash break-even. The Board expects a marked improvement in the Company’s revenues and a further reduction in the operating losses over the next 12 months given the new business opportunities it has developed. Shareholders will receive a further update when the audited accounts are published in mid August 2012.

Surgical Innovations Group (LON:SUN 8.62p/£34.77m)
Earlier this week Surgical Innovations Group, the AIM listed company designing and manufacturing creative solutions for minimally invasive surgery (MIS), announced that it has signed an eight-year exclusive distribution agreement with CareFusion (NYSE: CFN), a global leader in medical devices, for its new advanced PretzelFlex® laparoscopic retractor in the US, which will replace the existing licensing agreement for the Diamond-Flex® (ending in 2012). The device will be manufactured by Surgical Innovations for CareFusion and it will be marketed in the U.S. under the CareFusion brand. The PretzelFlex® generated significant interest from US surgeons at the recent SAGES congress (Society of American Gastrointestinal and Endoscopic Surgeons) in San Diego, and having received 510(k) clearance from the US Food and Drug Administration in March 2012 this deal ensures continuous revenue streams in an already established market.
During the Annual General Meeting today, the Chairman, Doug Liversidge CBE, made the following statement: “The Group has continued to promote its own SI branded products and encourage OEM relationships in its core market of minimally invasive surgery. We have also continued our investment in product development to ensure a continual stream of innovative products for our distribution network. Significantly we remain on target to launch pre-production devices for hip arthroscopy in the third quarter of 2012. Encouragingly we are beginning to gain interest in our cost effective devices from the NHS as they continue to face pressures to produce annual savings of £20bn. In order to support this NHS activity we recently announced a five year contract extension with our distributor, Elemental Healthcare, worth £5m. We remain confident about the future growth prospects of the business and look forward to reporting on the continuing success of the Group over the remainder of the year.”

Thalassa Holdings (LON:THAL 57p/£5.54m)
Thalassa, the marine seismic operations business, announced the enhancement of its operational capability through the agreement to acquire a further two compressor units, each consisting of an LMF compressor and a Caterpillar diesel engine. These compressor units are similar to those currently in operation with the Group’s two existing portable modular source systems (PMSS(TM)), offer a high level of operational flexibility and may be used either with a PMSS(TM) or as a source system for other seismic data acquisition surveys. Industry recognition of the abilities of the PMSS(TM), coupled with the acquisition of WGP in November 2011, has resulted in a strong growth in enquiries from potential clients. In the year to date, Thalassa has secured $15m of contracted revenues, however further growth is currently constrained by the Group’s current base of capital equipment. The investment into the two new compressor units will expand the Group’s ability to meet the increased level of interest in its services. The new compressor units are currently deployed for use on the Spring Energy contract, announced on 11 June 2012. The compressor units, which usually cost around $2m each when new, are being purchased out of internally generated cash, for an aggregate purchase price which is less than half of the cost of a single new unit.

Transense Technologies (LON:TRT 11.5p/£20.34m)*
Transense Technologies, the provider of sensor systems for the transportation and industrial markets, announced that its trading division, IntelliSAW, a leading provider of next generation wireless sensor systems for smart grid applications, has entered into a strategic distribution agreement with the Energy Projects & Services Division of Al Mashariq Trading and Contracting Company (Al Mashariq), headquartered in Dammam, in the Kingdom of Saudi Arabia. Al Mashariq is a leading and well-respected construction and project management company in the utilities market. Its Energy Projects & Services Division is focused on the power generation, distribution, protection and control fields of medium voltage networks for customers in the oil & gas, utility and industrial markets. As part of this agreement Al Mashariq will provide distribution and services support for IntelliSAW’s innovative wireless/passive temperature monitoring system in the Saudi Arabian market.

Tristel (LON:TSTL 29p/£11.60m)
The AIM listed manufacturer of infection control, contamination control and hygiene consumable products, provided a trading update in which the Company announced that it expects full-year revenue to be no less than £10.7m having reported revenues for the year to 30th June 2011 of £9.3m. Adjusted profit is expected to be no less than £650,000. Also mentioned, following the cancelling of a supply agreement by Medichem which brought in annual revenue of £2m, was the creation of a new brand identity, Anistel, which includes surface disinfectants, instrument cleaners and disinfectants, and skin disinfectants for the veterinary market. One unnamed national wholesaler has committed to stock the Anistel range from June 18, and discussions are progressing with two other wholesalers.

UniVision Engineering (LON:UVEL 0.38p / £1.44m)
UniVision, the Hong Kong-based designer and installer of digital surveillance and integrated security systems, has announced that it has filed a registration statement on Form 20-F with the U.S. Securities and Exchange Commission (SEC) and has become subject to reporting requirements pursuant to U.S. Securities and Exchange Act of 1934. This is a pre-requisite for the Company to have its ordinary shares quoted on the Over-The-Counter Bulletin Board of the US OTC Marketplace (OTC BB). It is anticipated that trading of the Company’s ordinary shares on the OTC BB will commence in mid-August 2012, subject to completion of the SEC’s review of the 20-F and other procedures as required by applicable rules and regulations. The management believes that a quotation on the OTC BB will benefit existing shareholders by making the Company’s shares more accessible to US-based investors and will compliment the Company’s AIM listing which will remain the principal trading platform.

Vialogy (LON:VIY 2.75p/£24.48m)
Further to the announcements of 21 May 2012 and 23 May 2012 ViaLogy, a provider of reservoir characterization, geophysical imaging and hydrocarbon sizing services to global oil and gas Exploration and Production companies based on proprietary, patented active signal processing technology, announced that it has raised £1m in a Placing of 36,363,637 new ordinary shares at 2.75p per share. Following admission, there will be a total of 926,606,911 ordinary shares of 1 penny each in the Company in issue.

*A corporate client of Hybridan LLP

The Hybridan Small Cap Wrap is a weekly review of some of the most interesting small cap stories of the past week.  Our review will usually be of those companies whose market capitalisations are less than £50m although we may occasionally cover larger companies.

12 June 2012

This week: new designs at DESC, a healthy update for Fitbug and Silence speaks out loud.

The Queen’s Jubilee provided something of a break in the financial markets, with the FTSE closing at a low of 5,260 points, but picking up again and closing last week at 5,432 points. The AIM All share however remained much flatter, hovering at the 680 points level over the same period. News this week has been on the whole less than positive, with UK manufacturing output falling by 0.7 per cent for the month of April, cuts to the French growth forecast (economy expected to contract by 0.1 per cent between April and June), and a rise in Spanish and Italian bond yields, representing borrowing costs. The week ahead sees UK trade data, industrial production data and GDP estimates for the three months to end of May 2012 being published.

If you would like to unsubscribe, please email
enquiries@hybridan.com with “unsubscribe me”.
Disclaimer- This document, which does not constitute research, has been issued by Hybridan LLP for information purposes only- please refer to the disclaimer in full below.

ABH final results, ATD Proposed Disposal, BIOM Trading Update, BGL 3D-Modelling confirms potential, CLF Q1 Results, CML Final results, DESC New director appointed, DDD Trading update,  EDEN AGM Statement, ERU Appointment of CFO, FTC Trading Update, FITB Final results, GAL Drilling Report, GDP Trading Update, GHH Interim results, HMP Phase I clinical data,  HYD US order, IVO Investment in Featurespace, IQE Acquisition, LMT Research Update, OMP interims and NED exercises warrants, OXB Successful MHRA inspection, PLE PSD502 submission update , SLN Atu027 Phase I trial presented,SRT NewContract, SOG Further rollout of Revolution, SUMM final DMD milestone received, THAL JV& New Contract, TGL Exploration Update, TRT iTrack Completes Trial, , TPJ Drilling Update, TSTL  Results of Clinical Study, SNCL  Interim Results, XEN Final results.

Angel Biotechnology Holdings (LON:ABH 0.2p/£7.74m)*
Biopharmaceutical contract manufacturer announced its audited final results for the fifteen month period ended 31 March 2012. Revenues of £3.456m for 15 months (2010: £2.945m for 12 months) were reported, with a gross profit of £1.207m for 15 months (2010: £1.907m for 12 months). The reduction in gross profit margin is partly as a result of the expenditure required at Cramlington to ensure the facility is fully prepared for its initial UK Medicines and Healthcare products Regulatory Agency (MHRA) inspection. Angel reported a pretax loss of £1.299m for 15 months. Seven contracts and contract extensions were signed totalling £5.3m for 15 months (2010: £5.3m for 12 months). Total assets increased by over £1.1m to £2.7m whilst total liabilities decreased by £0.6m to £0.9m resulting in a positive net asset value the period end of £1.8m. The Company also raised £3.1m in the period. Four new contracts were signed comprising a mixture of cell therapy programmes, therapeutic antibodies with seven contracts also signed for additional work on previously signed contracts. The GMP manufacture of ReNeuron Group’s (RENE 3.7p/£28.67m) clinical material for the PISCES trial at Glasgow’s Southern General Hospital continued, with the number of patients treated within the period reaching five. Angel completed a range of both development and biomanufacturing projects during the period. This includes a bacteriophage project for the treatment of MRSA and a cell culture development project for Pathfinder Cell Therapy Inc. The Company has committed significant resource to drive forward the five current projects which are on-going for OOO “NPF” Materia Medica in addition to the three further contracts recently signed. The Directors believe Angel has had a very successful start to the new financial year. In April 2012 the Company signed a contract with TransGenRx Inc. for the development of a process to manufacture recombinant interferon with a value of in excess of £800k. This will be carried out at Cramlington and would not have been won without this facility. The Medicines and Healthcare products Regulatory Agency (MHRA) licensing inspection for Cramlington is planned for mid-June 2012.  Angel identified an opportunity to acquire the assets of a manufacturing business in February 2012. ABL comprises 6,500 sq ft of clean room and laboratory space in a state of the art building on the outskirts of Glasgow. All necessary assets have been transferred to ABL to allow continuation of manufacturing, including a small number of staff. It is, for practical purposes, a going concern. ABL integrates well with the Angel core business in stem cells and cell therapy products, in that Angel group can now offer an integrated service by providing a custom collagen matrix, processed stem cells and assemble a finished product to GMP standards. In addition to these advanced products, ABL will also develop a wider customer base providing collagen products which will allow more rapid revenue generation due to reduced regulatory requirements. Since acquiring these assets ABL has secured and announced a supply agreement with Cardium Therapeutics with a value in excess of £400k for the initial twelve month period. We expect the next period to be one of consolidation with emphasis on signing new business for both ABH and ABL and driving the synergies possible through combining the resources of these two businesses.

Asterand (LON:ATD 1.65p/£1.96m)
The Board of Asterand announced that conditional upon, amongst other matters, the approval of Shareholders; the Company has entered into an agreement to dispose of the Human Tissue Business to  Buyers for an aggregate cash consideration of USD9m  subject to certain adjustments (including a working capital adjustment). Following this adjustment and after paying associated transaction costs, Asterand expects to receive net cash proceeds of approximately USD7.6m which the continuing Group intends to use, together with the existing cash resources of the continuing Group, to repay the Secured Debt of USD9m in respect of which the Company received notices of default on 4 October 2011 and 17 October 2011 on the BioSeek Loan Notes and the SVB Debt respectively. The Board is also considering a proposal to cancel the listing of the Ordinary Shares on the Official List and the admission to trading of the Ordinary Shares on the Main Market of the London Stock Exchange. Shareholders should note that if the Disposal Resolution is not passed then the Company may be placed immediately into administration.

Biome Technologies (LON:BIOM 0.08p/£4.71m)
Biome technologies reported that sales within the Bioplastics Division had been markedly below its expectations during April and May. The Board now believes that this will have a significant adverse impact on the Group results for the full year; this will be particularly felt in the first half. The RF Division is trading in line with the Board’s expectations and its order pipeline remains strong. Customers of the Group’s Bioplastics Division are reporting subdued demand for their own bioplastic end products, particularly in the markets of southern Europe. The impact of these changes to the dynamics of the bioplastics’ market will result in it taking longer than previously anticipated for the Group to reach profitability. The Group’s cash balance as at the end of April was £1.4m. However, this would have reduced significantly as the year progressed unless action is taken to reduce costs. As a result, the Board is taking steps to reduce cash costs by approximately £600k per year. This will better preserve Biome’s ability to reach profitability and protect its business model. Whilst the above developments, which affect the fast development of Biome’s bio-plastics market, are disappointing, the Board believes firmly that they constitute a pause in a fast-developing market rather than an indication of anything more fundamental.

Bullabulling Gold (LON:BGL 13.62p/£39.38m)
Bullabulling’s geophysical data for the broader project area has been integrated with 2 dimensional geological interpretation, structure and geochemical data to construct a regional 3 dimensional GIS model for Bullabulling Gold. The modelling has, for the first time, identified the structural setting for gold mineralisation at the Bullabulling deposit with positive implications for future exploration targeting and supports potential to significantly increase the gold inventory at Bullabulling and satellite deposits. The eastern limb of the Bullabulling anticline is considered to have the potential to replicate the existing resource and structural features prospective for higher grade mineralisation have been identified at depth beneath the current deposit. Preliminary prospectivity analysis has defined eight new exploration targets, with five targets at Bullabulling, two at Gibraltar and one at Geko. A program of stratigraphic diamond drilling and further seismic data acquisition is being developed to commence the testing of these targets and collect geological data to improve the 3D geological interpretation.

Cluff Gold (LON:CLF 70p/£117.63m)
Cluff Gold, the dual AIM/TSX-listed West African focused gold mining company, has its first quarter results ending March 2012. The main financial highlight was the 15 per cent increase year-on-year in EBITDA to US$5.3m. Cash operating margin at Kalsaka mine increased from US$505/oz in Q1 2011 to US$741/oz in Q1 2012. The cash balance also improved significantly from US$28.9m in end-December 2011 to US$53.4m. Production at Kalsaka was in line with management expectations at 12,504oz due to lower grade ore being processed in the period as predicted by the resource model. The 2012 production guidance remains unchanged at 60-70,000oz.

CML Microsystems (LON:CML 274p/£40.96m)
The designer and manufacturer of semiconductors, primarily for the global communication and data storage markets, provided final results for the year ended 31 March 2012 in which announced a 70 per cent growth in profit before tax to £3.95m (2011: £2.32m) on the back of a 6 per cent rise in revenues to £23.41m (2011: £22.12m). The storage product business has seen significant growth in particular across all major market territories, and now represents 46 per cent of group revenue. Wireless represented 36 per cent of revenues for the period. Interestingly, engineering activities at the Company during the period were primarily focused on the production release of the Group’s first SATA interface controller, with samples having been provided to the customer base and meaningful production shipments expected to commence in the second half of the financial year to 31 March 2013. A strong performance for the Company, with much to look forward to in the year ahead.

Designcapital (LON:DESC 1.88p/£1.34m)
AIM listed investment company dedicated to high-end contemporary furniture design has announced the appointment of Marc Bonnet (aged 44), as Executive Director of Artelano International Ltd. As part of this recruitment, Marc Bonnet is becoming a 20 per cent shareholder of Artelano International Ltd., which previously was wholly owned by designcapital. Marc has subscribed for 200,000 new ordinary shares of designcapital through his fully owned company CP Ltd, for a consideration of £20,000. Marc brings to the Artelano brand more than 20 years of experience in the high-end furniture industry, gained in various operational, commercial and executive positions, most notably at Moissonnier and Collection Pierre. Marc is also the owner of a furniture show-room, located in Pimlico, London, where Collection Pierre products as well as other luxury brands are distributed. Acting as the new Managing Director of the Artelano brand, his most immediate objective will be to identify new designs and products, co-ordinate the production of exclusive and limited series of high-end furniture products, assist clients in their contract projects, to drive sales and the redevelopment of the Artelano brand.

DDD Group (LON:DDD 26p/£34.89m)
3D solutions company reported at its AGM that first quarter revenues were approximately $1,815,000, up 86 per cent compared to the same period in 2011 and that during the period, revenues derived from royalty bearing units shipped by OEM licensees, resellers, and direct-to-consumer software sales increased by 9 per cent to 99 per cent.
Demand for the Group’s TriDef® 2D to 3D conversion products increased significantly in the first quarter of 2012, with approximately 3.5m units shipped, up 50 per cent compared to the same period in 2011 and up 63 per cent from the fourth quarter of 2011. The TriDef 3D software has become an industry standard, capturing an estimated 85 per cent of the 3D PC market during 2011, while shipments of TriDef 3D Mobile have exceeded one million within the first nine months of launch. In February, DDD teamed up with the leading provider of software to the internet café (I-Café) market in China with the objective of introducing 3D games to the sizeable I-Café market, estimated at over 144,000 locations. Also, as part of the planned expansion into the emerging market for glasses-free 3D mobile devices, DDD recently signed two evaluation agreements for TriDef Mobile software with customers who are creating 3D reference designs for 3D smartphones and 3D tablet PCs.Results for the first half of 2012 are expected to be published in late September.

Eden Research (LON:EDEN 12.75p/£14.16m)
The agrochemical and encapsulation development company provided a business update at its AGM in which it stated that it has continued to commercialise its encapsulation technologies not only for its primary use in agrochemicals but also in other areas such as head-lice, cosmetics, animal health and food flavourings. The acquisition of the second generation encapsulation technology from the University of Massachusetts’ Medical School has helped to open up new product areas. Furthermore, the Company has also received three notices of patent grants (two for the platform encapsulation technology patent in China and Australia, and one formulation patent from the African Regional Intellectual Property Organization (ARIPO) application across 15 ARIPO member states). Having cleaned up the balance sheet’s long term debt (by conversion into shares), moved to AIM from PLUS and with the expectation that the European review process (ongoing for a number of years) will conclude in the next 12 months, Eden feels it now has a firm foundation upon which to build the business.

Eruma (LON:ERU 8.5p/£1.87m)
The AIM quoted specialist provider of counter terrorism, intruder prevention products and intelligent lighting, announced that Nicolas (‘Nick’) Marks has joined the Company as Chief Financial Officer. Mr. Marks has many years’ experience of strategic financial management from his involvement with a broad range of businesses.  Eruma CEO Wayne Money said: “I am delighted to welcome Nick to the Company at such an exciting time of expansion following significant contract wins. Periods of rapid growth can be challenging for small businesses, and strong financial management is essential at such times. With this in mind, I am extremely confident that Nick has the necessary skills and experience needed to help fully capitalise on the growth opportunities available to us.”

Filtronic (LON:FTC 29p/£28.08m)
Filtronic, the designer and manufacturer of microwave electronics products for the wireless telecoms infrastructure market, has reported that in the final two months of the financial year to May 2012 the Broadband business has performed better than April’s upgraded expectations in both sales and profits. This was partly due to end-of-programme purchases by a major customer and favourable currency movements.  The Wireless business also finished the fiscal year strongly with sales on several programmes for the US market gathering momentum.  Accordingly, sales for each of the Broadband and Wireless businesses are expected to reach £13m for the year.  Both business segments were also profitable for the full year, enabling the Company to move into profitability as a whole.

Fitbug Holdings (LON:FITB 1.5p/£2.40m)
AIM traded provider of online personal health and well-being services announced its results for the year ended 31 December 2011. The Company saw a 13 per cent increase in turnover to £1,283,000 (2010: £1,132,000) and a reduced loss of £783,000 (2010: loss £929,000). Deal flow gained momentum; with an agreement signed with the health services arm of one of the largest health groups in the US serving over 70m lives as well as a further agreement with insurance arm of the group post period end; ongoing progress with The Vitality Group – agreements with two large corporate clients covering 16,000 employees; a three year supply agreement signed in May 2012 with leading US digital health engagement and management company, Healthrageous Inc; progress with PruHealth – now offering all renewing Standard Life Healthcare customers the option to participate in the Vitality scheme of which Fitbug is a core component; and Anxa account in France developing well with new orders confirmed and Holmes Place2Go product achieving significant traction in Israel with a roll-out agreed in Germany and Austria. Fergus Kee, Executive Chairman, said “Fitbug is now well placed to grow strongly in the markets in which it operates, particularly in the US.  It has a clear strategy and an experienced team to deliver it, with prospects underpinned by signed deals and a strong pipeline.”
Fitbug operates in what is increasingly called the ‘Connected Health’ market.  Connected Health is the use of wearable devices to upload data to the internet to allow individuals and third parties to track and manage a range of health factors ranging from chronic disease to optimising wellness and fitness programmes.  ABI research last year estimated that the market for wearable health-related devices ranging from heart rate monitors to biosensors that read body temperature and motion will reach more than 100 million device sales annually by 2016. The market for wearable sports and fitness related monitoring devices is also growing, projected to reach 80 million device sales annually by 2016. These growth projections are in part driven by the development of new technology and increasing consumer interest.  They are also driven by the growing cost and health system pressures from the projected increase in the burden of chronic disease, frequently caused by avoidable lifestyle-based factors, perhaps most significantly, inactivity.
Fitbug Holdings also announced that it has launched an innovative new Games Framework and iPhone app to be offered as valuable product extensions to fitbug.com, allowing users to increase their exposure to the innovative Fitbug service. Using Fitbug’s established Connected Health platform, the new Games Framework allows teams or individuals to compete against each other to complete virtual challenges.  Early market interest has been strong, with seven UK businesses covering 4,250 employees now running Fitbug challenges. These include two leading London legal firms and three NHS employers.  In addition PruHealth, a longstanding Fitbug client, has piloted the new Games Challenge Framework with their own staff and are now employing a Beijing to London Challenge with their health insurance customers as part of their Vitality Programme engagement activities. Additionally, Fitbug has launched its first iPhone app which allows Fitbug members to log physical activities and nutritional input, amend their goals and check their daily step progress with a new, easy-to-use mobile interface, thereby motivating users to track progress and encourage fitness dynamically and whilst on the go.  Fitbug Limited Chief Executive Paul Landau said “‘Gamification’, which is used in the US to describe the use of techniques borrowed from digital games to encourage regular exercise and foster healthy eating habits, is an area of strong market interest and growth.  So too is the increasing use of mobile technology in health, particularly by those operating the most recent generation of smart phones. The launch of our latest games framework and our first mobile app significantly strengthens Fitbug in both these important areas and will enable us to build our momentum in this fast moving technology based market.”

Galantas Gold Corporation (LON:GAL 5.125p/£12.08m)
Galantas Gold Corporation, the gold producer and explorer with a 100 per cent interest in Ireland’s only operating gold mine, has received core drilling results from five holes on its Omagh Gold Property, near Omagh, County Tyrone, Northern Ireland. The results are for the Joshua vein and include an intersection of 4.5 metres true width at a gold grade of 8.4 grammes per tonne. The intersection lies at a depth of approximately 160.6 metres below surface, the deepest yet drilled on Joshua Vein. The known length of Joshua Vein has increased, has so far been traced over 836 metres and remains open horizontally and vertically. The average grade (width weighted) of the eight intersects within the five holes sampled was 6.4 g/t gold, with 12.2 g/t silver and 0.6 per cent lead. The average true width of the eight intersects measured is 1.2 metres and depths range from 38.5 metres to 160.6 metres. The drilling results received continue to increase the Company’s confidence in the Omagh property. The drilling program has intensified since the start of 2012, with six rigs at work. The first phase of the program, which was targeted at producing an early indicated resource on Joshua vein with deeper drilling on Kearney, is approaching completion. The next phase will intensify work on both those veins and also examine a new and as yet untested geochemical anomaly within the mine site.

Goldplat (LON:GDP 12p/£20.14m)
The AIM quoted gold producer in Africa provided an operations update for its two gold recovery businesses in South Africa and Ghana and an update regarding establishing a new gold recovery plant in Burkina Faso. Goldplat’s gold recovery operation in South Africa has continued to perform strongly in the second half of the financial year (H1 2012 gold production totalled 7,040 ounces) and the plant is on target to hit management profit forecasts for the full year ending 30 June 2012.  Also, Gold Recovery Ghana Limited’s gold recovery operation, which enjoys a tax free status until 2016, continues to perform above expectations in the second half of the financial year and its anticipated profits will exceed management expectations for the full year to 30 June 2012.  Gold production for H1 2012 totalled 8,364 ounces. Goldplat CEO Demetri Manolis said: “Our gold recovery businesses in South Africa and Ghana continue to perform well and in conjunction with our first Brownfield mining operation, Kilimapesa Gold in Kenya, moving into production in January 2012, we expect to exceed FY 2011 gold production of 28,285 ounces for FY 2012. In turn, we also have two gold mining development projects in Ghana and Burkina Faso which are undergoing resource drilling programmes with a view to moving into gold production in the future.  With these developments in mind, we look forward to reporting on our full year results later in the year.” Research undertaken by Goldplat in Burkina Faso has indicated that there are significant volumes of tailings at attractive grades available for processing.  With this in mind, the Company has decided to establish a new processing unit in Burkina Faso and has registered a new trading company, Midas Gold SARL, to operate it.

Gooch & Housego (LON:GHH 362p/£79.10m)
The specialist manufacturer of optical components and systems announced interim results for the 6 months to 31 March 2012 in which the Company saw a two per cent increase in revenues to £27.8m though adjusted profit before tax fell by a considerable 40 per cent to £3m amid challenging trading conditions in the first quarter. Whilst the Industrial Laser market was said to be recovering (Housego’s Fibre-Q product contributed a significant £1.6m to revenues), Aerospace & Defence has been affected by severe delays in placing large contracts, though the Company is seeing a strong pipeline of near term opportunities. The acquisition of EM4 and Crystal Technology also impacted the bottom line figures. On the balance sheet, net assets did improve somewhat to £16.8m (2011: £14.2m), largely due to increases in inventories and a reduction in the Company’s payables. Despite the mixed but mostly difficult news, Gooch & Housego has spent some effort in building the foundations of the business, strengthening the management team with NEDs and a CTO, and also creating an operational board, business development positions and business unit manager positions in anticipation of the opportunities it seeks to take advantage of.

Hutchison China Meditech (LON:HCM 440p/£222.71m)
The Company  announced that Phase I clinical data for Sulfatinib (HMPL-012) and Fruquintinib (HMPL-013), two of the novel small molecule targeted anti-cancer drugs of HMP, was presented at the Annual Meeting of American Society of Clinical Oncology (ASCO).
The Sulfatinib Phase I study enrolled and treated 43 patients with the drug given once or twice daily. Sulfatinib was well tolerated at doses up to 300mg per day or 150mg twice daily and demonstrated preliminary anti-tumour activity in multiple cancer types, including liver cancer. To date the Fruquintinib Phase I study had enrolled and treated 29 patients in 6 different dose cohorts and was well tolerated at doses up to 4mg once daily and demonstrated excellent pharmacokinetic properties.

Hydro International (LON:HYD 118.5p/£17.02m)
Hydro International, which supplies environmentally sustainable and innovative products for the control and treatment of water, has announced that its US Wastewater division has won its largest ever grit removal system contract, worth CDN$4m. The contract is for the Bonnybrook WWTP in Calgary, Alberta, Canada. Revenue from the order is expected to be recognised in 2013 and 2014 as the project is delivered. To address the problem of grit removal from incoming flows to the municipal wastewater treatment works, Hydro will supply an integrated grit removal system comprising proprietary vortex separation products, including its Headcell, SlurryCup and Grit Snail products.

Imperial Innovations Group (LON:IVO 289p/£287.99m)
Imperial Innovations Group, the technology commercialisation and investment Company, has invested half of the £1.5m in the latest funding round for Featurespace, a Cambridge-based software solutions provider, alongside existing investors, Nesta, Cambridge Angels and Cambridge Capital Group. Mike Lynch, the founder of Autonomy and a non-executive director of Featurespace has also invested in this round. Featurespace, which was founded by Professor Bill Fitzgerald and David Excell, has commercialised software that processes streams of data and builds predictive models to identify and influence change in customer behaviour, based on their research carried out at Cambridge University. The technology is being applied to two areas: fraud detection and marketing analytics. The fraud detection software provides users with greater accuracy in identifying genuine risks to their business and a significant reduction in the number of false positive alerts, allowing a greater proportion of business to be accepted safely. The marketing analytics software assesses the behaviour of on-line customers and predicts the likelihood they will churn, enabling marketers to analyse individual customer behaviour in real-time and take appropriate action to reduce churn, as well as increase revenue.  The Company already has several customers, including Betfair (LON:BET 723.5p/£740.60m) and IG Group (LON:IGG 447.6p/£1626.20m).

IQE (LON:IQE 25.75p/£146.55m)
The developer of semiconductor materials announced this week that it had acquired the entire in-house MBE epi-wafer manufacturing unit of RFMD (NASDAQ:RFMD), a global leader in the design and manufacture of high performance RF components and compound semiconductor technologies. The deal includes a fully furnished epi manufacturing plant with 16 operational MBE tools and a 7 year wafer supply agreement and a seven year wafer supply agreement for the exclusive provision of all of RFMD’s MBE wafers and for provision of a majority of RFMD’s MOCVD wafer requirements. This puts the Company in a powerful position in the CPV market with up to $35m revenue capacity for CPV wafers and the acquisition is expected to be immediately earnings enhancing and significantly earnings accretive in future years.

Lombard Medical Technologies (LON:LMT 122p/£24.6m)
Lombard Medical Technologies the specialist medical technology company focused on innovative vascular products, announced the high angle clinical data results from the US PYTHAGORAS trial of its endovascular stent graft Aorfix(TM). The unique data set featured results from the world’s first and largest multicentre Endovascular Aortic Repair (EVAR) clinical trial, studying patients with angles greater than 60 degrees. 205 patients were recruited in the trial and the data resulted from 143 patients with highly-angulated aortic necks (angles between 60 and 110 degrees). Treatment of this patient group is not indicated in any stent grafts currently available in the USA. The data presented showed that Aorfix(TM) performed well in extreme aortic neck angulations. Outcomes such as freedom from major adverse events at 30 days and 365 days were significantly lower than in patients undergoing open surgical repair. Although not tested in this trial, it was noted that the outcomes were similar to EVAR trials of other stent grafts in much less severe anatomy. The results from the PYTHAGORAS trial have been submitted to the US FDA and form a central part of the Company’s pre-marketing authorisation application for Aorfix(TM). Currently all available stent grafts in the US are labeled for treating patients with AAA’s (Abdominal Aortic Aneurysms) with neck angles up to 60 degrees. In Europe, Aorfix(TM) is approved to treat patients with neck angulations up to 90 degrees.

One Media Publishing Group (LON:OMP 3.85p/£1.67m)*
One Media published its unaudited half yearly report for the six-month period ended 30 April 2012. Turnover increased by 29.3 per cent to £1,002,302 (2011: £774,933), pre-tax profits increased by 35.4 per cent to £204,667 (2011: £151,123) and the Company had cash balances of £792,938 at 30 April 2012. A dividend of £15,051 (0.0346p per share) was paid in the period with a further £50,000 (0.115p per share) due to be paid as an interim dividend. One Media acquired eleven new music catalogues in the period and post-period acquired 3,000 new TV & Film recordings for $33,000. One Media separately announced that Roman Poplawski (non-executive director) has realised 1,000,000 (one million) Share Warrants that he has acquired. Mr Poplawski now has approximately 7.34 per cent. of the issued share capital of the Company.

Oxford Biomedica (LON:OXB 2.72p/£25.70m)
Leading gene-based biopharmaceutical company announced that it has received approval from the UK Medicines and Healthcare products Regulatory Agency (MHRA) to manufacture bulk drug material for Investigational Medicinal Products (IMPs) at the Company’s specialist manufacturing facility in Cowley, Oxford. This represents an extension of Oxford BioMedica’s existing Good Manufacturing Practice (GMP) certification which covers the established in-house activities for testing and subsequent release of IMPs for clinical development. John Dawson, Chief Executive Officer of Oxford BioMedica, said: “We are world leaders in the development of lentiviral vector-based products and the successful commissioning of our proprietary manufacturing facility is a landmark achievement for Oxford BioMedica. This investment brings significant potential not only to support our current programmes and collaborations, but also to secure new partnerships and alliances.”

Plethora Solutions Holdings (LON:PLE 5.62p/£11.29m)*
Plethora announces that it has submitted a dossier to the European Medicines Agency (EMA) for the approval of PSD502 as a new medicine to treat premature ejaculation (PE). The Company is seeking approval of PSD502 through the centralised procedure, which if and when granted would provide the ability to sell the product across all 27 member states. Based on normal timelines the Company anticipates that approval should occur 12-18 months following submission. PSD502 is a topical spray containing two local anaesthetics, prilocaine and lidocaine. The product completed two phase III pivotal trials in 2009 and has been tested on over 600 patients with a total of approximately 26,000 doses delivered. The Company believes that the clinical studies conducted to date demonstrate that PSD502 is safe and highly effective in treating PE. While estimates vary, PE is reported to affect approximately 20-30 per cent of sexually active men. The Company estimates that the incidence of PE in the general population is potentially larger than the incidence of erectile dysfunction. In the 27 member states of the European Union, the Company estimates that there are in excess of 150m men aged between 20-69 years old. With the estimated incidence of PE this implies that the potential population of men in the EU with the disorder is approximately 30-45m. A centralised approval of PSD502 by the EMA would permit the product to be marketed to this entire group. The Company believes there is a significant unmet medical need in the treatment of PE. At present only one product, Priligy(R) is approved, in only a limited number of countries. To expedite commercialisation, in 2011 Shionogi and Plethora agreed that Plethora would undertake registration and commercialisation of PSD502 in Europe and certain other territories. The submission of the dossier to the EMA represents an important and critical step on the path to realising the value of PSD502. It is Plethora’s intention to enter into a new partnering agreement for PSD502 with a major pharmaceutical company with the sales and marketing resource to ensure the product is positioned most effectively in this area of great unmet medical need. In March 2012, Plethora stated that it had commenced talks with a number of companies and the Company confirms that these conversations continue.

Silence Therapeutics (LON:SLN 1.2p/£6.93m)*
AIM listed leading biotech Company Silence presented the latest data from its ongoing Phase I study of Atu027, its lead internal therapeutics candidate, alongside the 2012 American Society of Clinical Oncology (ASCO) Annual Meeting in Chicago. The enrolment of patients in the last cohort in dose level 10 has been completed and last treatment is scheduled on 22nd of June 2012. Atu027 was very well tolerated and safe up to the 10th dose level. “Stable disease” response for three and six months after treatment was observed in 10 and 3 patients, respectively, of the 33 evaluable patients. Two patients with neuroendocrine cancer had disease stabilisation for 9 and 12 months. Partial regression of pulmonary metastases was found in another patient. A further patient with breast cancer showed regression of liver metastases. Silence also announces that it is in advanced discussions to raise between £4-5m from new and existing shareholders to secure the funding for the Company’s R&D and marketing through until 2014.

Software Radio Technology  (LON:SRT 23.75p/£27.48m)
SRT announced that it has received an order worth $3.7m from an existing customer. The order is for the Company’s recently launched Identifier product and will be delivered to the customer in two batches before the end of December 2012, with SRT being paid after each delivery. Rapid manufacture and delivery of the first batch will be facilitated by a strategic stock of components purchased earlier in 2012. The ultimate customer for the Identifiers is a government in the Americas and the order of $3.7m represents approximately one fifth of their estimated total requirement which is expected to be ordered during the course of the next three years. The exact schedule for further orders to complete the fleet rollout is dependent on the actual speed of installation across the target vessel fleet. The Identifiers are being deployed as part of a regional maritime security program and will enable authorities to reliably and accurately identify and track vessels along thousands of miles of coastline. The Identifier provided the ideal solution for the end customer due to its fully integrated design, advanced core AIS technology and ease of deployment due to its internal battery power source.

StatPro (LON:SOG 86.5p/£53.08m)
AIM listed provider of portfolio analysis and asset pricing services for the global asset management industry, announced that Momentum Investments, a South Africa based investment managers, has chosen StatPro’s cloud based service, StatPro Revolution, for the distribution of fund performance analysis to new and existing customers. Momentum is an existing client of StatPro, having used StatPro Seven previously, and the move to Revolution by the large fund manager ($32bn assets under management) provides good validation of the product which offers Cloud based technology to adopters hoping to benefit from the convenience and cost saving features, whilst also being able to provide dynamic data on fund performance. Last month, the Company announced in its AGM statement that trading during the first quarter 2012 was in line with expectations and that it was confident of a successful outcome for the full year.

Summit (LON:SUMM 2.62p/£9.29m)*
UK drug discovery Company announced that it has successfully passed a milestone in the Phase 1 trial of SMT C1100 for the treatment of the fatal genetic disease Duchenne Muscular Dystrophy (DMD), which triggered the final payment from a $1.5m funding agreement with US-based DMD organisations.  SMT C1100, an oral small molecule compound, is a potential disease-modifying drug that works by increasing, or upregulating, the amount of a naturally occurring protein called utrophin.  The Phase 1 dose-escalation study in healthy volunteers was initiated in May 2012 and will now progress to the stage where participants receive multiple doses.  Results from the trial are expected by the end of this year. The Company will be available for partnering discussions at the BIO International Convention June 18-21, 2012, in Boston.  In addition, Summit will present at the Parent Project Muscular Dystrophy Annual Connect Conference June 28-July 1, 2012, in Fort Lauderdale.

Thalassa Holdings (LON:THAL 48.5p/£4.7m)
Thalassa, the marine seismic operations company, announced a new joint venture for the commercialisation of new, patented 3D seismic technology. Through its subsidiary, WGP Group Ltd, it has executed a joint venture arrangement with P-Cable 3D Seismic AS to commercialise P-Cable’s patented 3D seismic technology. The benefits of P-Cable’s new technology’s include the ability to produce low cost high-resolution 3D seismic data with rapid deployment and retrieval from small vessels, as well as high production rates (up to 25 sq Km/day) and the ability to acquire data in shallow waters. Thalassa also announced that the JV has secured its first contract with an agreement to provide seismic data acquisition surveys using the P-Cable 3D seismic technology for Spring Energy Norway AS. Spring Energy is a privately owned Norwegian oil and gas exploration, development and production company focused on the mature and immature areas of the Norwegian Continental Shelf. Mobilisation has already begun and the surveys are expected to commence on 8 June 2012 and to last for four months.

Touchstone Gold (LON:TGL 14.25p/£14.78m)
The Company provided an update on exploration activity related to its Rio Pescado Project in Colombia. Results from the Light Detection and Ranging (LiDAR) survey over the Rio Pescado Project for Touchstone Gold by Aquila Mapping Ltd, provide further feedback on the structure of the deposits demonstrating evidence of high-grade gold mineralisation and identifying new targets in areas of known gold mineralisation. David Wiley, CEO of Touchstone Gold, commented: “We are very excited by the LiDAR results. We have long believed that the areas drilled to date are only a small part of a system of high grade and close to surface mineralization in this part of Rio Pescado”.

Transense Technologies (LON:TRT 10.25p/£18.11m)*
Transense Technologies announced that its trading division, Translogik, has been advised by one of the world’s largest mining companies that its iTrack Tyre Temperature and Pressure Monitoring System for mining and off-the-road vehicles, has successfully completed field trials and is now an approved product for deployment in the southern African region. The Customer is initially focussing on fitting the iTrack system to its haul trucks while also considering fitment to its ancillary mine vehicles, more than doubling the potential number of vehicles requiring the system.
Transense separately announced this week the appointment to the Board of Mr. Melvyn Segal as Executive Finance Director with immediate effect. The Board is of the view that given the increased inflow of new contracts and business opportunities, it is an appropriate time to appoint an Executive FD, further strengthening the operational capacity of the Board and Executive management team.
Transense also announced that its trading division, IntelliSAW, a leading provider of next generation wireless sensor systems for smart grid applications, has entered into a strategic distribution agreement with Simpro Engineering Sdn. Bhd. (Simpro), headquartered in Kuala Lumpur, Malaysia. Simpro provides advanced power protection and control systems and SCADA (Supervisory Control and Data Acquisition) technology to the electric power industry. As part of this agreement Simpro will provide distribution for IntelliSAW’s innovative wireless/passive electrical switchgear temperature monitoring system in the Malaysian market.  Simpro will also work closely with IntelliSAW in developing other Southeast Asian markets.

Triple Plate Junction (LON:TPJ 1.62p/£6.0m)
TPJ, the gold and copper exploration company in joint ventures with three of the world’s top four gold miners in the highly prospective Papua New Guinea, provided an update on its Morobe project. The Morobe project, in joint venture with its partner Newmont Ventures Limited, is located on ground which abuts Newcrest-Harmony’s Wafi-Golpu deposit. Drilling at Gumots, the second target to be drilled did not intersect any appreciable thickness of the target intrusive unit and there are no significant results to report. Gumots is one of 15 prospective drill targets identified across the Morobe joint venture tenements, to date, using state-of-the art airborne geophysics, regional geochemistry and follow-up geological mapping, sampling and ground geophysics. Given the results of the Gumots drilling (and some access issues), Newmont has decided to suspend active drilling for an anticipated six month period, whilst the project focus is directed at additional exploration field work for the purpose of opening up and de-risking future drilling at the numerous additional potential drill targets across the territory. For example, at the Minawa and Pade prospects, where in particular, field teams have defined large footprints of encouraging surface copper and gold mineralization indicated by BLEG, ridge-and-spur soil and rock chip sampling which will require extensive further work including ground geophysics. However the Company has only drilled eight holes in what is a colossal exploration project with many prospects. To have hit a massive intersection in the first few holes was always an ambitious hope. The programme initially commenced in July 2011 and it is expected that it will continue for many years.

Tristel (LON:TSTL 28.5p/£11.4m)
Tristel, the manufacturer of infection prevention, contamination control and hygiene products, announces that the results of a study using Tristel wipes have been published in the Annals of the Royal College of Surgeons of England. The study, Evaluation of disinfection of flexible nasendoscopes using Tristel wipes: a prospective single blind study, was undertaken by the otorhinolaryngology (Ear, Nose and Throat) department at Northwick Park Hospital, London, which showed the “in-use” efficacy of Tristel wipes in cleaning nasendoscopes of bacteria, fungi and mycobacteria to be 100 per cent. The Tristel wipes system is a patented decontamination method for small flexible endoscopes and ultrasound probes.  It comprises a pre-clean wipe to remove surface soiling, a sporicidal wipe that kills harmful organisms within 30 seconds, and a rinse wipe.

William Sinclair Holdings (LON:SNCL 162.5p/£27.66m)
William Sinclair reported its interim results, with a profit before tax of £0.38m, revenue was maintained at £26.2m and an interim dividend was announced and increased to 1.9p per share. Bernard Burns, Chief Executive said: “The Company’s growth strategy remains on track via both organic and acquisition opportunities. In light of the economic conditions management continues to take the necessary decisions to ensure costs remain tightly controlled and operational efficiencies are identified. As a consequence, the outlook for the business remains in line with market expectations.” During the six months to 31 March 2012, William Sinclair performed in line with the Board’s expectations. The acquisition in November 2011 of the business and certain assets of Yorkshire Horticulture Supplies has made a limited contribution to overall performance so far as activity for this business is also heavily weighted towards the summer months. In line with the Company’s growth strategy additional acquisition opportunities continue to be considered.

Xenetic Biosciences (LON:XEN 5.88p/£23.29m)
A bio-pharmaceutical company specialising in the development of high-value differentiated biological and vaccines and novel cancer drugs announces its final results for the twelve months ended 31 December 2011. The period has been truly pivotal in Xenetic’s development; SynBio LLC injected more than £12m of new equity into the Company. SynBio (based in Moscow) and Xenetic also entered into a 6-product Co-Development agreement for the development of new proprietary products using the Company’s platform technologies. With these six new candidates, Xenetic has a total of 12 products in various stages of development in Russia. Xenetic also completed the acquisition of 100 per cent of the issued share capital of SymbioTec GmbH in consideration of the issue of 80m new ordinary shares in the Company, thereby acquiring full ownership of SymbioTec’s proprietary platform technology, OncoHist(R), an early stage technology with likely broad application in the oncology field. The first application of the technology is as a novel therapy for the treatment of refractory Acute Myeloid Leukaemia (AML) as well as for Acute Lymphoblastic Leukaemia for both of which indications OncoHist(R) has been granted Orphan and Rare Disease designation in both the EU and the United States. Clinical trials of OncoHist(R) for AML and Non Hodgkins Lymphoma have already commenced in Russia. Directly following the SymbioTec acquisition Xenetic entered into new arrangements with the Serum Institute of India Pty Limited which, in consideration of the issue of 9m new shares by Xenetic, the parties: consolidated a variety of prior agreements into a new Master Agreement; and improved, in Xenetic’s favour, the economic terms of the commercialisation of ErepoXen(R) in both the Developing and the Developed Worlds. Serum completed a new equity subscription for 2.5m new shares at 11 pence. Xenetic now has up to 13 drug candidates in development under programmes where, through clinical trials to be conducted in Russia, human proof of concept will be established on the most promising of the various candidates such that Xenetic can initiate Western clinical trials based on strong clinical and analytical data. This is a core part of the Company’s product development strategy and is designed to reduce the clinical and economic risks of initiating Western trials based only upon pre-clinical evidence.

*A corporate client of Hybridan LLP

A full archive of previous weeks’ Small Cap Wraps can now be viewed on www.hybridan.com.
The Hybridan Small Cap Wrap is a weekly review of some of the most interesting small cap stories of the past week.  Our review will usually be of those companies whose market capitalisations are less than £50m although we may occasionally cover larger companies.