Logistics deal with major Chinese player: SinoPharm
25 April 2018
Concepta plc (AIM: CPT) the UK healthcare company and developer of a proprietary product targeted at the mobile health market and with a primary focus on women's fertility, is pleased to announce that, having addressed previously announced supply chain issues, it now has product in China and has signed an agreement with SinoPharm on local stock holding and logistics throughout the whole of China. SinoPharm is the largest state-owned pharmaceutical company in China, with annual sales of over £23 billion.
Under the terms of the deal Concepta will receive regular quarterly orders for myLotus meters from SinoPharm, with 50% upfront payment and 50% paid on delivery. As part of the agreement, SinoPharm will coordinate the logistics and distribution of units with Concepta's China office executing the marketing plan. The contract will run to 31 December 2018 and be renewed on a yearly rolling basis thereafter.
Concepta also reports that, given the previous product delays, it was not possible to fulfil any orders in Q1 2018, including the previously announced order from ShanDong WeiHai HaiChen Pharmaceutical Co. Ltd. Delivery of this order is against upfront payment, and whilst the order has not been cancelled, payments have not been forthcoming and will no longer be relied upon in the Company's 2018 plans.
Following a strategic review in December the Board has revised its strategy to focus resources on establishing agreements with a select number of 'Gold' distributors. Going forward, Concepta will work closely with these key distributors to ensure the success of the introduction of myLotus into the market, before expanding the distribution network more broadly across additional provinces.
Erik Henau, CEO of Concepta commented: "I am thrilled to announce this agreement with SinoPharm. This key strategic deal clearly reflects our revised strategy and will provide us with regular orders and upfront payment from a highly-respected and well-placed trade partner in the market.
"The deal offers us greater flexibility in the Chinese market as stock will be readily available rather than having to be manufactured to order. This will facilitate the development of sales across the provinces and enable the Company to focus on securing repeat business through its distributors.
"It is a strong endorsement of the quality of our products that Concepta is able to engage with organisations of SinoPharm's stature. They have a strong ongoing programme of working with foreign companies and this relationship is reflective of the focus we now have of working with targeted partners in China. We are confident that this focus on establishing a few key successful distribution channels will deliver strong revenue growth in 2018."
For more information on SinoPharm: http://www.sinopharm.com/en/
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Notes to Editors
Concepta plc is an AIM-quoted pioneering UK healthcare company that has developed a proprietary product, myLotus, targeted at the personalised mobile health market with a primary focus on unexplained infertility† in women.
myLotus is currently the only consumer product which allows both quantitative and qualitative measurements of a woman's personal LH and human chorionic gonadotropin (hCG) hormone levels in a home test, facilitating higher conception rates and early diagnosis of issues with fertility hormones. The proposition of myLotus is to help women conceive naturally.
Concepta has made significant progress recently, establishing relationships with a number of distributors in China where myLotus has been given cFDA approval. Concepta is initially targeting the traditional route to market in China through Chinese hospitals and plans to add the direct-to-consumer route in the near future.
The Company is also well on its way to achieving CE-marking and commencing its direct-to-consumer launch in the UK and Europe in H2 2018. The Company has identified a significant global market opportunity, with revenue potential of the Chinese and EU unexplained infertility market estimated to be worth c.£600m per annum.
†Unexplained infertility refers to women that have been unable to conceive after 6 months of trying. This highly motivated target group of consumers won't typically be offered medical intervention until 12 months of unsuccessfully trying, with IVF not offered until two years. Research indicates couples start to take positive action ahead of this time and there is little medical support to help them do so.