THE reverse takeover of cinema operator Eng Wah Organisation by Japanese bio-venture firm Transcutaneous Technologies (Transcu) is looking a bit like a horror movie at the moment.

Transcu Group, the company resulting from the merger, announced that it had lost US$6.8 million (S$10.1 million) for the second quarter while revenue had plunged 95.4 per cent to US$828,000.

The completed reverse takeover took effect on Nov 14 this year, and this is Transcu Group's first set of financial results since then.

The firm said the steep decline in sales was mainly due to the lack of licensing revenue contributions from the pharmaceutical business.

Licensing revenue with third parties contributed about US$17.2 million in the second quarter of the previous financial year but the group had not secured additional licensing agreements for the three months to Sept 30 this year.

Transcu has been focusing on expanding its research and development (R&D) facilities and protecting its developed intellectual properties, moves that had sent its R&D expenses up 47 per cent to US$5.9 million, for 1st financial year half ended Sept 30.

The firm deals in transdermal drug delivery systems. In layman's terms, it means delivering the drug through skin and so eliminating having to use needles for a wide variety of drug classes.

Founder and chief executive Akihiko Matsumura, said: 'We are currently negotiating with potential partners and expect to conclude new licensing agreements over the next few months for our pharmaceutical business.

'This will in turn lead to a more sustainable income stream from royalties, contract manufacturing fees and product sales when products incorporating our transdermal drug delivery system takes off.'

The loss per share for the quarter was 0.38 US cents compared with earnings of 0.62 US cents last year.

Net asset value was 4.01 US cents as at Sept 30, compared with 4.25 US cents as at Mar 31.