Premaitha Health PLC Year End Trading Update (1959F)

TIDMNIPT

RNS Number : 1959F

Premaitha Health PLC

16 May 2017

Premaitha Health plc

Year End Trading Update

Manchester, UK - 16 May 2017: Premaitha Health plc (AIM: NIPT, "Premaitha" or the "Company"), a leading international molecular diagnostics group focused on prenatal testing, provides a trading update for its financial year ended 31 March 2017, which includes one month of trading from Yourgene Bioscience, post-acquisition on 2 March 2017.

Key points

   --     Test volumes increased by 40% to over 24,000 (2016: 17,228) 
   --     Revenues up 24% at over GBP3.1m (2016: GBP2.5m) 

-- Like-for-like revenues from continuing customers (excluding Genoma) grew by 250% demonstrating increasing uptake of NIPT in our covered territories

   --     12 month pro forma revenues, including Yourgene Bioscience, of c.GBP5m 

-- Gross margin up to 35% (2016: 29%) due to scale and cost reductions which should continue to improve during 2017 / 2018

   --     Rapid geographic expansion continuing 
   --     Substantial progress made on strategy to reduce intellectual property risk 
   --     Yourgene Bioscience integration progressing well 

Trading

Test revenues of over GBP3.1 million were generated from the sale or in-house processing of over 24,000 non-invasive prenatal tests ("NIPT"). This represents an increase of 40% in test volumes and 24% in revenues (due to revenues from non-recurring equipment sales in the prior year). Excluding non-recurring revenues from equipment sales and the discontinued Genoma business (as announced on 12 May 2017) revenues were up 250% against the prior year.

The above figures include approximately one month from Yourgene Bioscience ("Yourgene"), since completion of the acquisition on 2 March 2017. On a pro forma basis, full year Group revenues would have been c.GBP5m and test volumes over 30,000.

Gross margins were 35% (2016: 29%) reflecting more established accounts, economies of scale and ongoing efforts to reduce cost of goods through product and software refinements. Margins are expected to continue improving during 2017 as further software developments are implemented.

Geographic expansion

The geographic spread of customers has continued at a rapid rate, as per recent announcements, with distributors appointed in the Middle East, Southern Europe and recently in Croatia. Yourgene has a broad installed base across Asia which is also growing significantly (see below).

The IONA(R) test is now an established leading NIPT solution in the UK, France and the Middle East and its presence is growing in other markets. There are further installations scheduled in the next quarter in France, Italy, Taiwan, South East Asia, the Middle East, South Africa and Northern Europe with a strong forward pipeline. Several of these installations will be on Thermo Fisher's latest S5 instrument platform, on which the IONA(R) test has now been validated.

Furthermore, the first IONA(R) test laboratory installation for the major European diagnostics services customer announced in February 2017 is on track for June 2017, with a further installation for the same customer due later this year.

A pre-requisite for geographic expansion in many countries is the registration of products prior to sale. National regulatory processes are variable in complexity and time but are generally lengthy for significant markets. Premaitha has completed registration for the IONA(R) test in the EU (CE-mark) and three other countries to date, and is well-advanced in registering the IONA(R) test in Canada, Mexico, Brazil, Saudi Arabia, Malaysia and Vietnam. Registration in China is expected to commence later in 2017/early 2018 once a suitable partner has been selected.

Intellectual property de-risking strategy progressing well

The Company continues to prepare a robust defence against Illumina's UK patent infringement claims which will start to be heard in July 2017. In addition, Premaitha is providing full support to the EU's competition commission in its ongoing enquiries into potentially anti-competitive behaviour by Illumina. The UK represents c.25% of Group revenues at present (14% on a pro forma basis for the enlarged group) and, separate to the legal defence, there is an active strategy to reduce the Group's intellectual property risk through geographic expansion in unaffected territories and through product innovation. Both strands of this strategy are progressing well and the acquisition of Yourgene allows the Group to accelerate this strategy.

Yourgene integration progressing well

The integration of Yourgene into the Group is progressing extremely well with Dr Bill Chang and Alan Chang now firmly established on the Board and Keng Hsu integrated into the senior management team. Staff exchanges have taken place and multi-level collaboration working groups established.

Joint commercial initiatives are already bearing fruit with new customers and strengthened relationships with existing partners. For example, in early March 2017, Yourgene concluded an OEM supply agreement with Thermo Fisher for eight countries in South East Asia. This has already created increased revenue streams in Taiwan, Malaysia and Thailand with Indonesia launching soon. Since the acquisition, Yourgene has also secured new customers in Singapore, Thailand, India, Jordan and Hong Kong for a variety of in-house, in-customer and send-to-Manchester solutions. Yourgene and Premaitha are also collaborating effectively on new product innovations which will be attractive to customers across Asia and the Middle East, and which will also further the Company's de-risking strategy.

Dr Stephen Little, CEO, commented: "We have continued to make rapid progress to establish Premaitha as an internationally recognised, high growth company in the emerging clinical genetics field, despite the challenges presented by Illumina's litigious approach to competition, and Genoma's financial difficulties. The underlying Premaitha business is developing well and the acquisition of Yourgene creates some genuinely exciting opportunities for geographic expansion, product innovation and reduction in perceived risk. Investors can be assured that we intend to mount the strongest possible legal defence to demonstrate the true motivation behind Illumina's claims whilst building a strong high-growth business which can compete globally."

For more information, please contact:

 
 Premaitha Health plc                   Tel: +44 (0) 
                                         161 667 6865 
 Dr Stephen Little, Chief Executive 
  Office 
 Barry Hextall, Chief Financial 
  Officer 
  Joanne Cross, Head of Marketing 
 [e-mail] 
 
 Cairn Financial Advisers LLP (Nomad)   Tel: +44 (0) 
                                         20 7213 0880 
 Liam Murray / James Caithie 
 
 finnCap (Broker)                       Tel: +44 (0) 
                                         20 7220 0500 
 Adrian Hargrave / Scott Mathieson 
  (Corporate Finance) 
 Tony Quirke (Corporate Broking) 
 
 Vigo Communications                    Tel: +44 (0) 
                                         20 7830 9700 
 Ben Simons / Fiona Henson / Antonia 
  Pollock 
 [e-mail] 
 

About Premaitha

Premaitha is an international molecular diagnostics group which uses the latest advances in DNA analysis technology to develop safer, faster and regulatory approved genetic screening tests. The Group's primary focus is on non-invasive prenatal tests (NIPT) for pregnant women - an emerging, multi-billion dollar global market.

Premaitha's IONA(R) test was launched in 2015 as the first CE-IVD NIPT test in Europe. It enables laboratories and healthcare practitioners to offer a complete CE-marked NIPT system in-house. The IONA(R) test is performed on a maternal blood sample - which contains traces of fetal DNA - and estimates the risk of a fetus being affected with Down's syndrome or other genetic conditions.

Unlike existing prenatal screening methods, due to its high level of accuracy, the IONA(R) test can significantly reduce the number of women subjected to unnecessary invasive follow up diagnostic procedures, such as amniocentesis, which are costly, resource intensive and carry a risk of miscarriage.

In March 2017, Premaitha acquired Yourgene Bioscience, a specialist next generation sequencing and bioinformatics company based in Taiwan, with its own NIPT screening test that operates on the same Thermo Fisher next-generation sequencing platform as Premaitha's IONA(R) test. Yourgene brings significant benefits to the Group through expanded market access in Asia - the world's fastest growing NIPT market - as well as opportunities for cross-selling and the ability to jointly develop expanded test content both within NIPT and beyond.

Premaitha is headquartered in Manchester, England, with Yourgene offices in Taipei and Singapore. Its shares trade on the AIM market of the London Stock Exchange (AIM: NIPT). For further information, please visit www.premaitha.com. Follow us on twitter @PremaithaHealth.

This information is provided by RNS

The company news service from the London Stock Exchange

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May 16, 2017 02:00 ET (06:00 GMT)