Rua Life Sciences Share Discussion Threads

[cfb2] 28/7/2022 14:46

Number of people in the trial is not really the problem. It is the duration of the trial and time taken for analysis, submission and feedback of results. If there are multiple trials then these will go back to back rather than concurrently.

[the surgeon] 28/7/2022 13:27

It depends on what you call relatively small. Minimum of 50 patients and more likely at least 100.

[sicilian_kan] 28/7/2022 13:00

It is scaremongering to say that it will need many people when the company has said said post fda meetings that the trial will be relatively small.

[aykon] 28/7/2022 09:36

If you look at the posting history of a couple of individuals, it becomes quite apparent that they have their own hidden agendas. They seem to pop up regularly to sow seeds of doubt. One of these individuals that has name of a medical profession, I have serious doubts that they indeed belong to that profession!

Their posts are indeed scaremongering given we far we are down the process with FDA with aortic grafts.

[sicilian_kan] 28/7/2022 09:26

Stop scaremongering. The rns only two weeks ago stated:

“After the FDA indicated that they would like to see additional data and in particular a relatively small clinical study, constructive discussions continue on the precise requirements of the 510(k) process.”

[buywell3] 28/7/2022 09:03

So according to the FDA this would be a Class 2 , significant risk device



Has this been agreed ?

Are posters aware ?

Does anyone think otherwise ?

The thing to bear in mind is that the FDA is never going to risk letting itself get hung out to dry for letting any medical device product not be properly tested for a long period and by many people if it is Class 2 and significant risk --- are they

Thus the clinical trials will have to be onerous and thorough so as to prove safety beyond doubt over a period of perhaps 2 to 3 years imo

[the surgeon] 28/7/2022 08:51

I am informed it is Class 2

[bones] 28/7/2022 08:23

I’m all for that Langland!

[langland] 28/7/2022 07:48

Good summary, bones, thank you. I'm splitting hairs I know but I would have thought the annuity business should be worth more like 20 x revenue.

[alanrussell] 27/7/2022 21:16

Yes, very timely bones.
Given the share price performance it's easy to forget the value that lies within if only it could be brought to fruition.

[bones] 27/7/2022 20:11

Thanks Aykon, dingdong62.

Good spot Langland. Also, the GBP/USD has weakened substantially since 31/3/22, so with most of the income being earned in USD, that should give a handy kicker to this year’s numbers if cable stays relatively weak as expected.

[aykon] 27/7/2022 18:46

Well done Bones. Thanks for a very thorough and informative summary on the current situation based on the recent Webinar. Like you I strongly feel that the market is discounting a lot of value in the different businesses of the company!

[langland] 27/7/2022 18:08

With respect to the cash position I think it is worth pointing out that there was a current asset surplus of about 600k from 'trade and other receivables'.

[dingdong62] 27/7/2022 17:34

Thanks Bones top work

[bones] 27/7/2022 16:01

I have had another watch and listen of the recent Equity Development webinar with Bill and Caroline now that the sound has been cleaned up. The Q&A was still a bit unwashed so one or two words were drowned in static but I did my best. Here are the main takeaways for me, the majority from the Q&A’s:


Recent final results to 31/3/22

RUA Biomaterials is basically an annuity business with >90% net margin. With c.£500k pa income, this could be valued at 10x or £5M which is (ex-cash) what the whole of RUA Life Sciences is currently valued at on AIM!

RUA Medical Devices is in a growth phase, turned over >£1M and has net margin of nearly 50% contributing over £500k to group costs. Similar contract manufacturing businesses have been changing hands at between 10 and 20x EBITDA, so RUA Medical Devices could easily be valued right now at £5M to £10M alone. Again, well in excess of the whole group’s value on AIM.

RUA Vascular is the first of the real areas of interest to investors, developing products that stand to overhaul a product line that has barely changed in 40 years. The current plans aim to target, at a very minimum, 10% of a total addressable market of $1Billion. Included in this is the aortic root graft and, later down the line, a product called a frozen elephant trunk graft. The latter sells in the current market at an equivalent £18k each in the US and £11k each in the EU. These are products sealed with animal derived material which RUA are hoping to eliminate and make obsolete.

RUA Structural Heart is still regarded as the crown jewel of RUA’s products in R&D with an addressable market of $8Billion. The regulatory environment here is necessarily rigorous and expensive so the intention is ultimately to partner, license or sell the technology at the right time, most likely once animal trials have commenced or ended (being the point when the technology has been somewhat “de-riskedR21;).

RUA Medical Devices contract updates

Contact with existing key customer (US based) suggests they are seeing “very significant growth” in the US whereas European business (a much smaller element) has yet to catch up with pre-covid levels of sales.

The pricing structure with the US customer has been changed to secure a good increase in selling prices. Previously a large discount was offered by RUA in exchange for cash prepayments. Now turnover will improve somewhat with business on normal credit terms. Caroline suggested that this will result in an improvement on the 11% growth seen in the recent year just ended.

Further growth in this division may come with a potential new customer with which RUA MD is in talks. This entity is a “well-renowned medical textile company” and it is believe RUA MD would represent the first time this company has outsourced any of its manufacturing elements. This is regarded as a “feather in the cap” for RUA to be trusted to take on a small part of the bigger company’s processes. Hope is for the go-ahead to be given in the next couple of months (currently going through legal processes). Hope is also that this will be a foot in the door for further work going forward.

Heart valve representative visit in Feb 22

At the previous webinar, Caroline had alluded to a visit by a representative from a major heart valve company. Five months on, what can be reported?

According to Bill, it went “extremely well”. The visitors were looking at “two or three different project opportunities mainly around textiles, what we are doing on grafts and our polymer expertise”. Bill felt they left “pretty impressed”.

An OEM opportunity is progressing well and discussions that were at the operational level have now moved to the corporate level where they are exploring if there are any “touch points” where they can work together in the future.

Nothing can be said to have been achieved so far since the visit but there is great respect for what RUA has done to date.

Heart valve in general

There are two parallel products being developed.

- The 100% polymer leaflet heart valve about which RUA is very excited given its excellent design in reducing stresses on the leaflets.
- The hybrid textile/polymer leaflet heart valve which came “out of left field” following the research work done on developing the grafts for RUA Vascular. The impression given is that this combines the low stress factor of the pure polymer valve with a near “unbustable221; material for the leaflets. The excitement here is even higher.

My understanding is that one of these will be chosen to go forward to in vivo animal trials in 2023 when they have enough data to make that decision.

Vascular graft 510k process

The FDA requirement for a clinical trial has resulted in new outlooks and, despite the delays to market, offers potential advantages and accelerations in other areas.

At point of launch (2025 in US projected), RUA may have “data that will be hugely important from a marketing perspective”. For example, the clinical data that the market could use might include:

- Grafts will be “substantially less inflammatory” than current products (due to the body not having any animal tissue to attempt to reject);
- Grafts will leak less than the current technology (the patient would spend less time on a chest drain leading to earlier discharge and a significant cost saving to the hospital).
- While the RUA products in the main are similar to existing products (hence the 510k route), the above benefits may be so significant that the projected aim of a 10% share of the market could prove highly conservative in practice.

Clinical data will be readily available for use by regulators in other territories and continents.

Finance and cash requirements

Clearly, there is an acknowledgement that the clinical trial and other work being carried out in R&D cannot be solely financed by the profit centres of RUA Biomaterials and RUA Medical Devices alone.

At this current moment, several options exist but there is little that can be said until the final decision about the structure of the clinical trial on the vascular grafts has been cleared by the FDA. Currently, the talk is of an August decision. Once that is known, it is “de-riskedR21; and a better idea of costs and timing will be known.

Cash was at £3Million at 31/3/22 so there is headroom for now (and RUA Bio and RUA MD continue to earn profits all the while). Cash will have to be managed carefully nonetheless to support the clinical trial.

Discussions have been ongoing with several potential distributors of the vascular graft, both regional and global. RUA would hope to have at least one of these signed up prior to [inaudible, couldn’t make it out!].

Caroline also said it would be good to see a better share price!

I think that’s the gist of the important points discussed. Clearly, there are potential catalysts here to improve that share price over the next three months, before any funding becomes critical.

For example, if they can report the signing of a new contract manufacturing deal with a new customer, that would have significance for the cash flows of the group as well as help to reduce dependence on one major customer at RUA Medical.

I also hope they can get a good agreement with the FDA on the structure of the clinical trial. Once there is certainty there, that should give the market more visibility and eliminate the kind of uncertainty that crushes a share price.

I hope the above is a useful summary. If you want to listen to it in full, the Youtube link is in the header near the top of the page.

[bones] 20/7/2022 22:32

Thanks edmonda, good to hear the main presentation free of static.

Just need something to land via RNS over the next two months or so and maybe we’ll start to recover some ground finally.

[edmonda] 20/7/2022 13:20

Bill Brown, Chairman, and Caroline Stretton, Group Managing Director, of RUA Life Sciences, discuss how the business is proceeding on its FDA regulatory pathway. They also talk about what steps are being put in place to ensure high throughput manufacturing from day one of FDA approval, and the developments in their contract manufacturing business.

[parsons4] 19/7/2022 10:32

Good posts on here, much better than most others !! Well done all.

[aykon] 18/7/2022 18:45

Soon we will know what has been agreed with the FDA for the 510k application clinical trial…but they appear to be strongly hinting that it will be a relatively small trial with a 6 month follow up. This would imply that we may be looking at 50-100 patients. Such a trial could be undertaken for £1-1.5 million. This might also explain why they are not in a rush to raise further funds. In my opinion the fundraise is more likely to be for the heart valve project progression to animal studies. Although they have also hinted that they are looking for potential partnership or even sale of this business unit!

[bones] 18/7/2022 17:32

I’m looking forward to the cleaned up copy of today’s webinar. A whole new hour of previously unheard material. Pick up on the gems within!

[bones] 18/7/2022 16:58

ENW, you are right about the one thing underlying our investment and that is the share price discounts Armageddon currently!

I can easily make a case for each of the business divisions being worth in isolation more than the entire market value of RUA Life Sciences plc in total right now (£8M).

[langland] 18/7/2022 16:49

Ah yes....Radio Luxemburg... the nostalgia!

[early not wrong] 18/7/2022 16:33

Despite the sound quality, it was a fair update.
They can't say what they are not allowed to say, and they can't build expectation (again) before delivery, so I think it was comprehensive and realistic. There are some positives for the profitable parts of the business including the working capital cycles adjustments, growth and new contracts. This plus the Elasteon annuity business are going well in an uncertain world.

Bill has always been reluctant to get into a debate on funding, and so he was again today. They have options.

All things considered, they're making solid progress with the existing businesses whilst the new ones have huge potential when they can be de-risked. The share price represents an option on a much larger share price for those that can afford to wait.