REG - Yourgene Health PLC - Conditional disposal of Taiwan laboratory

Yourgene HealthAnnouncement

13/06/2023 08:30

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RNS Number : 5380C  Yourgene Health PLC  13 June 2023

Yourgene Health plc

("Yourgene", the "Group" or the "Company")

 

Conditional disposal of Taiwan laboratory

Manchester, UK - 13 June 2023: Yourgene (AIM: YGEN), a leading international
molecular diagnostic group, announces the conditional divestment of its
Taiwanese subsidiary, Yourgene Health Taiwan Co Ltd ("Yourgene Health
Taiwan"), to INEX Innovate Pte Ltd ("INEX" or the "Acquirer"), a Singapore
based molecular diagnostics company focused on women's and fetal health for
proceeds of up to $4m USD (approximately £3.2m) (the "Divestment").

 

As announced on 26 April 2022, given the challenges supporting, investing and
growing the Taiwanese genomic service lab from the UK, the Yourgene Board
decided to conduct an operational and strategic review of its Taiwanese
operations. As a result of this review the Board decided to seek an acquirer
for the Group's Taiwan-based business activities, whilst retaining ownership
of its proprietary NIPT software, Sage(TM) Prenatal Screening, which underpins
its wider NIPT offerings in Asia-Pacific and elsewhere.

 

The Divestment is conditional upon the Acquirer being granted Taiwanese
Government approval for the planned acquisition as required for non-Taiwanese
acquirers.  Yourgene will also need to complete a pre-Closing restructure to
facilitate the transfer of retained people and assets to other Group
companies. It is currently expected that these conditions will be satisfied
within the next three months and that the Closing Date will occur before
September 2023.

 

The Divestment will streamline the Group's operations, enabling Yourgene to
focus its strategic efforts on expanding the core Asia-Pacific product-based
activities whilst retaining a strong route to market in Taiwan and reduce the
Group's ongoing expenditure by approximately £0.5m on an annualised basis.
For the year ended 31 March 2023, on a post-restructure pro forma basis,
Yourgene Health Taiwan had turnover of circa £2.0m and was profit breakeven.
The proceeds from the Divestment will be used for general working capital
purposes in the Asia-Pacific region and in the pursuit of the Group's
strategic objectives.

 

Key terms of the Divestment include:

·    Upfront payment: US$1m payable on the Closing Date; plus

·    Loan agreement: US$1m payable as a lump sum or via ad hoc instalments
within two years of the Closing Date (carrying interest at 7 per cent. above
the Bank of England base rate) ("Loan Agreement"); plus

·    Earn-out consideration: up to US$2m potential earnout subject to the
achievement of certain profit related milestones, over the next two calendar
years post completion.

·    The Loan Agreement is secured against the shares of the subsidiary
being sold such that failure to pay will result in ownership returning to
Yourgene with no obligation to return previously received funds.

 

Upon the Closing Date, INEX will be appointed as Yourgene's NIPT distributor
in Taiwan and Japan and will act as the Group's exclusive laboratory partner
and service provider in Asia for an initial three-year term. INEX will also
apply its expertise in diagnostic testing in Southeast Asia to grow the
laboratory services business in its own fields of activity. There will be a
transitional period of 12 months where the two companies will support each
other operationally and administratively whilst separation of the two
businesses takes place in an orderly manner.

 

Yourgene's Board member and Yourgene Health Taiwan's founder, Dr. Bill Chang
will remain with the Group and on the Board of Directors. As part of the
pre-Closing restructure, ownership of two non-trading subsidiaries of Yourgene
Health Taiwan will be transferred to Dr. Bill Chang (the "Transfer") whilst
their dissolution takes place, so as to remove a potential delaying factor
from the Acquisition.

 

The Transfer constitutes a related party transaction for the purposes of Rule
13 of the AIM Rules by virtue of Dr. Bill Chang being a Director of the
Company and therefore is deemed to be a related party. The Directors
independent of the Transfer consider, having consulted with Cairn Financial
Advisers LLP, the Company's nominated adviser, that the terms of the Transfer
are fair and reasonable in so far as the shareholders are concerned.

 

The disposal of the Yourgene Health's Taiwan Laboratory completes another step
in Yourgene's multi-stage strategic plan which is intended to create focus on
the Group's core products and geographies, prolong the available cash runway
and rebuild shareholder value over time.

 

Lyn Rees, Chief Executive Officer of Yourgene, commented on the Divestment:
"We look forward to developing a lasting relationship with INEX as they act as
our exclusive laboratory partner and service provider across Asia. We will
update shareholders once the completion of the transaction has occurred in due
course."

 

This announcement contains inside information for the purposes of
the UK Market Abuse Regulation.

The Directors of the Company take responsibility for this announcement.

 

 

 Yourgene Health plc                                Tel: +44 (0)161 669 8122

 Lyn Rees, Chief Executive Officer                  investors@yourgenehealth.com (mailto:investors@yourgenehealth.com)
 Joanne Cross, Director of Marketing

 Cairn Financial Advisers LLP (NOMAD)               Tel: +44 (0)20 7213 0880
 Liam Murray / Ludovico Lazzaretti

 Singer Capital Markets (Corporate Broker)          Tel: +44 (0)20 7496 3000
 Aubrey Powell / Tom Salvesen / George Tzimas

 Walbrook PR Ltd (Media and Investor Relations)     Tel: +44 (0)20 7933 8780 or yourgene@walbrookpr.com
                                                    (mailto:yourgene@walbrookpr.com)
 Paul McManus / Alice Woodings / Lianne Applegarth  Mob: 07980 541 893 / 07407 804 654/ 07584 391 303

 

About Yourgene Health

Yourgene Health is an international integrated technologies and services
business, enabling the delivery of genomic medicine. The Group works in
partnership with global leaders in DNA technology to advance diagnostic
science.

 

Yourgene primarily develops, manufactures, and commercialises simple and
accurate molecular diagnostic and screening solutions, for reproductive health
and precision medicine. The Group's portfolio of in vitro diagnostic products
includes non-invasive prenatal tests (NIPT) for Down's Syndrome and other
genetic disorders, Cystic Fibrosis screening tests, invasive rapid aneuploidy
tests and DPYD genotyping assays.

 

Building on our expertise in genomic technology, Yourgene's Ranger®
Technology offers next generation size selection with a range of sample
preparation platforms for dynamic target enrichment. Ranger® Technology can
be utilised to improve workflows and performance in multiple applications
including NIPT, oncology, infectious disease testing and gene synthesis.

 

Yourgene Genomic Services offers a clinical service from UK and Taiwan
focusing on precision medicine and reproductive health, including NIPT.

 

Yourgene Health is headquartered in Manchester, UK with offices in Taipei
(divestment pending), Singapore, the US and Canada, and is listed on the
London Stock Exchange's AIM market under the ticker "YGEN".

 

For more information visit https://yourgenehealth.com/
(https://yourgenehealth.com/) and follow us on twitter @Yourgene_Health.

 

 

Forward-Looking Statements

Certain statements made in this announcement are forward-looking statements.
These forward-looking statements are not historical facts but rather are based
on the Company's current expectations, estimates, and projections about its
industry; its beliefs; and assumptions. Words such as 'anticipates,'
'expects,' 'intends,' 'plans,' 'believes,' 'seeks,' 'estimates,' and similar
expressions are intended to identify forward-looking statements. These
statements are not guarantees of future performance and are subject to known
and unknown risks, uncertainties, and other factors, some of which are beyond
the Company's control, are difficult to predict, and could cause actual
results to differ materially from those expressed or forecasted in the
forward-looking statements. The Company cautions security holders and
prospective security holders not to place undue reliance on these
forward-looking statements, which reflect the view of the Company only as of
the date of this announcement. The forward-looking statements made in this
announcement relate only to events as of the date on which the statements are
made. The Company will not undertake any obligation to release publicly any
revisions or updates to these forward-looking statements to reflect events,
circumstances, or unanticipated events occurring after the date of this
announcement except as required by law or by any appropriate regulatory
authority.

 

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