REG - RUA Life Sciences - Business Update

Rua Life SciencesAnnouncement

05/04/2024 08:30

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RNS Number : 4851J  RUA Life Sciences PLC  05 April 2024

5 April 2024

 

RUA Life Sciences Plc

("RUA Life Sciences", the "Company" or the "Group")

 

Business Update

 

RUA Life Sciences (AIM: RUA), the holding company of a group of medical device
businesses focused on the exploitation of the world's leading long-term
implantable biostable polymer (Elast-Eon™), today provides an update on
trading for the financial year ending 31 March 2024 and developments since the
successful fundraise in December 2023.

Trading

The first half of the financial year was impacted by operational issues,
resulting in the delayed shipment of products from the Contract Manufacturing
business. As anticipated, the revenue shortfall experienced during H1 has been
fully compensated by a strong H2 performance. As a result, the Company expects
to report, subject to audit, FY24 revenue of £2.2 million, which is in line
with market expectations. The Company is pleased to announce that the recovery
in revenues has not been at the cost of gross margins, and it is anticipated
that reported margins will exceed expectations. The Group has focussed on cost
control throughout the year. These rigorous measures are expected to result in
operating costs of £3.4 million, approximately £0.2 million below market
expectations for the year.

Cash Position

Strong cost management, together with the anticipated recovery in trading
during the second half, means the Company remains financially resilient, with
a strong balance sheet and a cash position of approximately £4.0m. Despite
challenging trading conditions, these achievements underscore the Group's
resilience and adeptness in financial and operational management.

Business Development

Significant efforts have been focussed on business development activities as
part of the Group's strategy to reach profitability in the short term. It has
been the strategy to seek to grow the scale of contract manufacturing, and the
Company is pleased to announce that it has succeeded in securing the initial
development stages of a significant contract with a global enterprise. This
contract represents a major milestone on the route to doubling revenues for
the contract manufacturing division once fully operational. Initial
development work under this contract has commenced, with an initial purchase
order valued at £100,000 already received.

Additionally, as announced on 20 December 2023, the Company has successfully
entered into a Material Transfer Agreement (MTA) with a global Heart Valve
company. The Group's composite material has been delivered and is currently
being tested by this partner. The non-calcific nature of Elast-Eon, together
with the tear resistance of the novel composite (up to two times improvement
over current materials), positions RUA as a leader in developing
next-generation alternative leaflet material resistant to Structural Valve
Degeneration (SVD). The Company is confident that these results will be of
significant interest to other prospective partners and is actively exploring
additional potential partnerships.

 

Bill Brown, Chairman of RUA Life Sciences, stated: "Trading results for FY24
represent a meaningful step in delivering on the Group's strategy outlined in
November, and the efforts to focus the business on growth are showing
promise."

Commenting on the Contract Manufacturing success, Bill added:

"Securing this contract underscores RUA's expertise in implantable fabrics and
moves us closer to profitability. It is our first major contract since the
acquisition of RUA Medical Devices in 2020 and supports our belief that there
are significant market opportunities in this area."

Bill further elaborated on the heart valve composite by stating:

"Our material has exceeded expectations, demonstrating remarkable durability
and energy efficiency compared to market-leading valves. We are actively
seeking partnerships to leverage these compelling results. RUA believes that
these outstanding results in preclinical and bench studies are a result of the
unique combination of RUA's expertise in medical fabrics and the biostability
of Elast-Eon"

The information communicated in this announcement contains inside information
for the purposes of Article 7 of the Market Abuse Regulation (EU) No.
596/2014.

 

For further information contact:

 

 

 RUA Life Sciences

 Bill Brown, Chairman                                                  Tel: +44 (0)1294 317073

 Lachlan Smith, CFO                                                    Tel: +44 (0)1294 317073

 Cavendish Capital Markets                                             Tel: +44 (0)20 7220 0500
 Limited

 (Nominated Adviser and Broker)

 Giles Balleny/Dan Hodkinson (Corporate Finance)

 Charlie Combe (Broking)

 Michael Johnson (Sales)

 

 

 About RUA Life Sciences

 

The RUA Life Sciences group was created in April 2020 when RUA Life Sciences
Plc (formerly known as AorTech International Plc) acquired RUA Medical Devices
Limited to create a fully formed medical device business. RUA Life Sciences is
the holding company of the Group's four trading businesses, each exploiting
the Group's patented polymer technology.

 

Our vision is to improve the lives of millions of patients by enabling medical
devices with Elast-Eon(TM), the world's leading long-term implantable
polyurethane. Whether it is licensing Elast-Eon(TM), manufacturing a device or
component, or developing next generation medical devices, a RUA Life Sciences
business is pursuing our vision.

 

Elast-Eon™'s biostability is comparable to silicone while exhibiting
excellent mechanical, blood contacting and flex-fatigue properties. These
polymers can be processed using conventional thermoplastic extrusion and
moulding techniques. With over 8 million implants and 15 years of successful
clinical use, RUA's polymers are proven in long-term life enabling
applications.

 

The Group's four business units are:

 

 RUA Contract Manufacture:  End-to-end contract developer and manufacturer of medical devices and
                            implantable fabric specialist.

 RUA Biomaterials:          Licensor of Elast-Eon(TM) polymers to the medical device industry.

 RUA Vascular:              Commercialisation of open surgical vascular grafts and patches

 RUA Structural Heart:      Development of polymeric leaflet systems for heart valves.

 

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