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 Lachlan Smith, CFO |
Tel: +44 (0)1294 317073 Tel: +44 (0)1294 317073
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| Cavendish Capital Markets Limited (Nominated Adviser and Broker) Giles Balleny/Dan Hodkinson (Corporate Finance) Charlie Combe (Broking) Michael Johnson (Sales) | Tel: +44 (0)20 7220 0500
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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-EonTM, the world's leading long-term implantable polyurethane. Whether it is licensing Elast-EonTM, 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.
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| RUA Biomaterials: | Licensor of Elast-EonTM polymers to the medical device industry.
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| RUA Vascular: | Commercialisation of open surgical vascular grafts and patches
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| RUA Structural Heart: | Development of polymeric leaflet systems for heart valves. |
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