Shares in materials innovation company HeiQ (HEIQ) gained 4% to 207.1p on Friday after announcing an exclusive five-year contract to supply ICP Group with the company’s proven antimicrobial technology Viroblock.
The five-year contract is expected to deliver a minimum $30 million of royalty revenues ($8 million in the first two years), in exchange for global rights to use the company’s Viroblock technology which kills 99.99% of infectious viruses and bacteria within minutes.
If successful, today’s agreement represents a significant milestone for HeiQ in the context of analysts’ forecasts for 2021 pre-tax profit of around $12 million.
ICP Group is a global leader in innovative thin film coatings applied to packaging by fast moving consumer goods companies, pharmaceuticals and medical sectors.
The deal will allow ICP to market HeiQ’s technology and trademark to its downstream customers which manufacture packaging products for some of the world’s largest consumer brands.
Paul Grzebielucha, ICP’s Industrial’s division president said, ‘This HeiQ Viroblock game changing technology for our industry and society has proven to be a superior solution that is currently available in the marketplace.’
The companies plan to complete product development by 1 August at the latest.
BUILDING ROYALTY STREAM
As we reported here, an exciting part of the growth potential for HeiQ resides in developing royalties revenues from applying Viroblock to a diverse range of industries.
Royalty revenues are very valuable because they attract high gross margins above 90% as well as building brand equity.
Chief executive and founder Carlo Centonze commented, ‘Our award-winning innovation has entered a new phase in its lifecycle and that the brand equity we have built as an innovation leader is delivering meaningful returns.’