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.

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.

3.5P by the end of the week as the drift continues!!

The Year end results were slightly bizzare - turnover for the year - 2,991 (down from 5,735 in previous year). Loss 796,764

Heading down now.

Nice head of steam building up here-last chance to board the rocket?? I'm holding fingers crossed for good news any time now IMO.

"Head of steam?" "rocket"

It has been falling for more than a month and a half.

I suppose you would expect that though from a

'steam driven rocket'

LOL Haystack ! This one's on fire--how's that!! as long as it's up.

oops-fire the after burners profit takers moving in!

I am unconvinced that the up-tick is warranted by fundamentals ...... I belive HML have a history of failed deals and I find it very concerning that the US deal has now been delayed twice ..... How important the European deal is I have no idea, but I see news on that is due on Monday ...... Will that arrival (or new delay?) be as exciting as the anticipation? ..... Feeling too cynical to comment.

Look again cynics

Mondays news will be GREAT

Harvey.