REG - RUA Life Sciences - Strategy Update

Rua Life SciencesAnnouncement

20/11/2023 07:00

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RNS Number : 8940T  RUA Life Sciences PLC  20 November 2023

20 November 2023

 

 

 

RUA Life Sciences Plc

 

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

 Strategy Update

 

RUA Life Sciences plc (AIM: RUA.L), the holding company of a group of medical
device businesses focused on the exploitation of Elast-Eon™, the world
leading long-term implantable biostable polyurethane, is pleased to provide an
update on developments within the group businesses and the Board's priorities
for the future development of RUA and the funding of its key R&D projects.

 

 

RUA Contract Manufacture

The strategy review undertaken by the Company 18 months ago resulted in the
business focussing on larger opportunities, particularly in the areas of
de-risking client's supply chain issues which became apparent during Covid.
The business unit is progressing just such an opportunity at present but more
importantly has recently responded to a formal Bid Request for a product range
directly within RUA's implantable textiles sweet spot that has annual revenue
potential of around £1.5 million. Another customer is expected to submit a
bid request  in the next few months at a value of around £500k. The
progression of sales discussions into formal bid processes gives the board
confidence that the Company is on track to meet its objective of doubling the
scale of the Contract Manufacture business in the medium term.

 

RUA Structural Heart

Structural Heart is exceeding management's expectations with regards to the
development and testing of the Company's novel composite material for the
creation of heart valve leaflets. The composite which benefits from
Elast-Eon's biostability and blood contacting properties is designed to
improve the durability of flexible leaflet heart valves. Recent testing
results have surpassed key milestones.

 

·      flex fatigue testing for durability passed 400 million cycles
equivalent to 10 years in man.

·      a heart valve made of the composite has achieved the key 200
million cycles required by ISO standards for a flexible leaflet heart valve.

·      hydrodynamic testing demonstrated valve efficiency around 50%
better than current technology.

·      valve flow area is around 25% larger than similar sized valves in
the market.

·      Recent patent filing to protect the new IP entitled "Composite
Material, Heart Valve and Method of Manufacture".

 

Rather than incur the full cost of developing a valve directly, our strategic
focus is now to accelerate the commercial potential of RUA Structural Heart by
making the composite available to the heart valve industry for incorporation
into next generation valves. The Company expects to shortly formalise an
agreement to provide composite material to a large heart valve company for its
own testing and now that an attractive data pack is available on the
composite, RUA intends to broaden this further through the industry..

 

RUA Vascular

RUA Vascular has now reached the stage of being fully prepared to commence the
regulatory testing regime agreed with the FDA through the pre-sub process to
achieve 510k approval. In summary,

 

·      a product has been developed on which in vivo data has been
gathered along with in vitro mechanical testing.

·      an automated manufacturing process established, and a pilot
manufacturing plant set up.

·      the manufacturing process has attractive cost of goods analysis,
is highly scalable and allows for positive gross margin potential.

·      the products have already developed OEM customer interest with
the first commercial sale recently achieved.

·      a global distribution partnership has also been put in place to
allow a simplified route to market.

 

The outstanding workstreams relate in the main to a GLP animal study to gather
two additional intermediate time points as well as the six-month data
collected in the original study, together with a relatively small clinical
study of up to 120 patients with the performance goal set at six month follow
up.

 

Depending upon time of starting recruitment for the clinical studies and speed
of recruitment, a timeframe to regulatory approval of between 30 and 36 months
and a budget of approximately £6 million is expected.

 

However, given the current cost of capital and funding of the business, the
Board believes that it is in the best interests of shareholders to not seek to
fund these trials itself but explore other options for third party funding in
the near term.

 

We believe that the Vascular project has very attractive risk adjusted returns
on the additional investment required to achieve regulatory approval. The
limiting factor however is the cost of capital placed upon RUA because of the
depressed share price. Not only would dilution relate to the interest in the
Vascular project but the substantial upside potential from both RUA Contract
Manufacture and RUA Structural Heart would be limited for current
shareholders. The investment in RUA Vascular will be exploited by seeking
third party funding whilst retaining an interest in the  project.

 

The change in strategy has dramatically reduced the future funding
requirements of RUA and the recent developments at both RUA Contract
Manufacture and RUA Structural Heart have provided opportunities and a pathway
for the Group to reach profitability and cash generation in a significantly
shorter timeframe.

 

 

 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

 Caroline Stretton, Group Managing Director                                Tel: +44 (0)1294 317073

 Cavendish Capital Markets                                                 Tel: +44 (0)20 7397 8900
 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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