Main Web Site : www.henderson-morley.com

On line shop web site : http://www.herpesexpert.com (Frost and Simpson)

Investor Relations email : investors@henderson-morley.com

Henderson Morley is a drug discovery company

The company has been developed specifically to carry out preliminary sourcing and screening of candidates to combat diseases caused by the herpes family of viruses and certain other DNA viruses

Latest GECR update 15th October 2006

Latest GE&CR update - 15th Oct 2006 :


The news investors have all been waiting for - regarding negotiations with a US dermatological pharmaceutical firm has finally been unveiled. The licence has been granted under an agreement to
Cutanea, a U.S. pharmaceutical company, specialising in the development of dermatology products in the US market.

The licence is for new applications of ICVT for the treatment of dermatological conditions in humans. The agreement and takes the form of an exclusive American, Mexican and Canadian wide licence to bring products to market through a programme of pre-clinical and clinical development of treatments either by Cutanea or through a sub-licence. Under the terms of the Agreement, Henderson Morley will receive up to 6.675 million dollars in development and commercialisation milestone payments up to the point at which the application receives regulatory approval, and will receive royalties on net sales thereafter.

Under its business plan, Henderson Morley has stated its belief that, following clinical development and regulatory licence approval, sales of the product in excess of $1.5 billion could be achieved over the subsequent ten year period. This would give a potential royalty to Henderson Morley in excess of $115 million over this term.

As a drug discovery company, it is imperative that Henderson continues to grant licenses to further develop its technology portfolio. This is the group's third ICVT license agreement. Encouragingly, Cutanea has a great management team with a proven track record of commercialising dermatology products.

Meanwhile, the company has announced that it has been working away on a vaccine against Koi Carp Herpes virus. The group believes it is now ready to start field trials of a
candidate vaccine, in a collaboration with the Internationally renowned Hagerman
Aquaculture Research Institute in Idaho USA. The initial immunogenicity studies should produce results within 6 months, enabling Henderson Morley scientists to optimise the vaccine formulation, with a view to securing a product licence from the veterinary authorities as soon as practicable.

Clearly activity at Henderson Morley has been significant in recent weeks. The licensing announcement is very encouraging, but with the news now out of the way, the shares have eased - a classic case of buy on the rumour, sell on the news. That said, the stock has now pulled back below the recent placing price. With so much going on at the company, further newsflow in the shorter term is far from unlikely.

*Henderson Morley is a corporate client of Bishopsgate Communications which is owned by RSH, the ultimate owner of GE&CR.

Forecasts and a formal recommendation are suspended ahead of the publication of a detailed note next month.

Latest GECR update 8th May 06

It continues to be an exciting period for biotechnology group Henderson Morley and patient investors have been rewarded handsomely. Last month, the company's shares soared as the group unveiled a deal with an un-named pharmaceuticals group for its anti-viral applications. This deal could, on its own, be worth a multiple of Henderson's market value and we believe that further, similar, deals could be concluded over the medium term.

Last month we said that we believed that the total contract value for this particular deal for Henderson Morley could be in the range of 28-37 million pounds, with milestone payments extrapolated from our original forecasts estimated at around 4 million pounds. Royalty payments could be in the range of 22-31 million pounds. However, the deal could be worth even more than this as the company has revealed that the pharmaceutical group in question had now indicated that it wished to extend the scope of the proposed licence to include other applications. Despite the further discussions, Henderson Morley still expects to be able to announce the signing of the final contract and disclose its key terms within the original 90-day period, which means we should have the full terms of the deal ahead of the next monthly update.

At the same time the company has unveiled details of a placing. The group placed 18 million new shares at 2.5p a share, raising 450,000 pounds. The total number of shares in issue is now 401,928,632. these funds will be used to provide the company with working capital to continue to invest in its patent portfolio and the ongoing development of ICVT ahead of the first milestone payments.

This inaugural licensing deal is expected to act as a framework for any future licensing deals for the company's proprietary drug delivery systems. We believe that discussions on other deals for other products are still underway. The group has a relatively simple product which it is bringing to market. The company has taken 2 common drugs - which have already undergone rigorous safety testing - and has found a new way of using them to treat some very common viral conditions, for which there is currently no effective treatment. The system is called ionic contra-viral therapy, or ICVT for short, and the platform has proved effective for a wide variety of conditions including skin warts, verrucae and genital warts. Henderson Morley has been developing the formulations of its anti-viral treatments and has taken part in typically-protracted talks that are all part of bringing a medical treatment to market. The deal announced this week covers the US, Canada and Mexico

Upon signing the licence, Henderson Morley will be entitled to receive a series of substantial milestone, development and commercialisation payments during the programme, with the details being released when the contract is finalised in the next 90 days or sooner. The table shows our original forecasts for royalty and licence payments. These forecasts are for global royalty payments and included a 10% risk weighting. Stripping out these effects and we believe that a thumbnail estimate of the royalty payments is around 4 million pounds, with royalty payments at around 22-31 million pounds. The full-terms of the deal are expected to be announced within 90 days of the initial announcement, which was on March 20th, possibly sooner. We have not update our forecast table below until the exact terms of the deal are confirmed.

The licensing news has prompted a significant re-rating of the company's shares, which now stand at 4.55p - well ahead of our initial buy recommendation at 1p. The licensing deal in the lucrative North American market is good news and should the company strike such deals in other territories then we believe the shares remain significantly undervalued. The shares remain a speculative buy.

Will the deal come off though. They have had talks before about deals which have come to nothing. Attheend of 2001 their SP tanked for nearly a year after one deal failed.

Haystack.....yeah appreciate HML have had problems in the past but this time it's the real thing. The ICVT has been throuhg it's tests and the deal was going to be announced very soon apart from the pharma wanting to extend the applications,
All positive and looking forward to a big RNS

Haystack, would like to make a prediciton then based on events of 2001 in a companies history ? Those events in 2001 were not even comparable to the proposed deal we have now.

I am glad you can be a little more sensible on here, as opposed to your endless new users names on AFN all spouting the same rubbish :) People used to listen to you before you went crazy with your barrage of user names and silly posts on there, may I suggest a return to the old Haystack ? :)

Companies like HML have failed deals all the time. There is no indication of the size of the deal anyway. It is funny how they followed the 'possible' deal with a fund raising as they wereal most out of cash. It must have made the cash raising easier.

The initial money would just be for product development and may not make them any money. Any further money (as yet unknown) would be some way in the future.

The SP would probably fall now on any announcement. Buy on rumour SELL on confirmation.

Here is a post from another BB



Some realism here!


Lightman1 - 8 Apr'06 - 11:53 - 8509 of 8509


cassius clay

It doesn't work like that. The big pharma will pay upfront milestone payments so long as they believe there is a chance of commercialisation. The profit to the company for which they have agreed a license will be virtuallly non-existent. The upfront money is to cover the entire cost of developing the product. So if HML were to recieve an upfront payment of 30 million it does not mean they'll be showing a profit of 29.5 million after the cost of developing the drug at 500K has been extracted. The size of the milestone payment is not a reflection of how wonderful the big pharma thinks the product is but the cost of developing the product. So technically HML can recieve an upfront payment of 30 million and still be showing a small loss.

The drug market is the most lucrative market after the oil industry, but like the oil its a complete bastard to bring your product on tap.

a couple of months ago, the lemmings rushed in headlong pushing the price to silly levels for no good reason .... they then all fell over the cliff ..... since then, the potential licencing deal that HML is working o in USA seems to be coming steadily to fruition, or so their last RNS indicated.

In the bloodbath of the last couple of days, the sp has stayed very solid indeed, so this may prove a useful and profitable haven for some funds ...... a similar comment could be made re ULT

Can anyone tell me when the 90 days are up and when the contract to the American Companies comes top fuition. I have lost track of the timing.I am holding on like mad for some real profit here.

And what if, as in previous discussions that HML have had, the contract is not signed?

rdo I think it is around June 12th that it will be announced. Haystack if the deal is not signed then so be it because it is high risk high reward. I'm willing to take the chance but if it fails to come off then that's the way it is !!

Monday

In a sea of red, it's good to see HML clicking up a small +0.275 albeit that the spread looks ott

and up again .... perhaps the guys really are going to pull of the licencing deal after all ..... what that means for the sp I have no idea, though a couple of months back, when sp was hyped up to 6+ peeps were talking 8/10/12p ...... Does anyone have any sensible and half-way logical assesment?

Lots of buys going through, is there some news coming?

News due around 18th and 31st July, first with (one hopes) conclusion of licencing agreement in USA and second should yield a progress report on similar talks (not due to be concluded yet) with European company

July 11th uk-analyst.com update :

Henderson Morley is delivering. Its investors are now on tenterhooks awaiting details of the company's deal to license its ICVT technology. We expect news on this front in the next few weeks, after which we will be able to fully update our forecasts. The group is currentlyin negotiations with a US group on licensing the treatment for the North American market. These talks have been protracted and both groups have now agreed to an extension. The extra 30 days means that the 2 groups now aim to strike a deal before 18 July.

The company has also said that it has been in negotiations with a European dermatological company - and those discussions had resulted in both groups signing a letter of intent. This is a precursor to the grant of a license agreement for a new application of ICVT for the topical treatment of genital and labial herpes and certain other dysplasias. It will take the form of a worldwide licence to bring the products to market through a programme of preclinical and clinical development. Both parties intend to be legally bound by the terms of a licence agreement which is expected to be concluded by 31 July.

Very few things happen quickly in biosciences and patient investors have been rewarded handsomely. The shares have soared since our initial recommendation at 1p, but we still believe that these two deals could be worth a multiple of Henderson's current market value. Indeed, the shares have performed so well since we initiated coverage of the stock, the company won a gong at the techMARK Mediscience Awards ceremony held at the Grosvenor House Hotel in London. The company won the Best Performing AIM Life Science Share award on 8 June.

We have not incorporated these 2 potential deals into our forecasts, as we await the fine details, which will hopefully emerge in the next few weeks. However, we have estimated that the total contract value for the US deal could be in the range of 28-37 million pounds, with milestone payments extrapolated from our original forecasts estimated at around 4 million pounds. Royalty payments could be in the range of 22-31 million pounds. However, the deal could be worth even more than this, as the company revealed that the pharmaceutical group in question indicated that it wished to extend the scope of the proposed licence to include other applications.

The table shows our original forecasts for royalty and licence payments. These forecasts are for global royalty payments and included a 10% risk weighting. Stripping out these effects, we believe that a thumbnail estimate of the royalty payments is around 4 million pounds, with royalty payments at around 22-31 million pounds.

The licensing announcements are good news and, should the company both capitalise on the current situation and strike further deals, we believe the shares remain significantly undervalued. The shares remain a speculative buy

Today

"due to uncertainty surrounding ongoing negotiations"

Is the deal actually going to come off? Real revenues look to be years away.

"The licence will be a worldwide licence to bring the products to market through a programme of preclinical and clinical development of the treatment."

They still have to do the trials yet.

Among the casualties, Henderson Morley was down 0.50 at 3.75 due to uncertainty surrounding ongoing negotiations with an un-named dermatological pharmaceutical company based in the US. Both parties have agreed to a further 30-day extension to Aug 17 in order to continue the negotiations, Henderson said today.

Confess that I am fast losing patience ..... don't like deals that take this long to finalise

I know that deals sometime take an age to finalise but if they delay the European deal then I might bail!

It is beginning to look very suspicious.