Source - LSE Regulatory
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

Caroline Stretton, Group Managing Director

 

Tel: +44 (0)1294 317073  

Tel: +44 (0)1294 317073

 

Cavendish Capital Markets Limited                                

(Nominated Adviser and Broker)

Giles Balleny/Dan Hodkinson (Corporate Finance)

Charlie Combe (Broking)

Michael Johnson (Sales)

Tel: +44 (0)20 7397 8900

 

 

 

  

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.

 

 

RUA Biomaterials:

Licensor of Elast-EonTM 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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