Manufacturing outsourcing agreements for myLotus®
14 April 2020
Additional capacity of site to support COVID-19 antibody test manufacturing
Concepta PLC (AIM: CPT), the innovative UK personalised healthcare company and developer of the proprietary self-test platform ("myLotus®"), the UK's most accurate home-use fertility tracking and pregnancy testing system, announces that it has agreed to outsource manufacturing for myLotus®; reducing overheads costs for the Company and allowing it to focus on product commercialisation.
To this end, the Company has signed agreements with Abingdon Health Ltd ("Abingdon Health"), a leading UK rapid test developer and manufacturer, to acquire Concepta's lateral flow test manufacturing site in Doncaster, for the technical transfer of the manufacturing processes, the further development of Concepta's lateral flow devices, and for the continuing contract manufacturing and supply of myLotus® testing strips.
As part of the asset purchase agreement, Concepta will assign the leases on the facility and machinery, transfer the staff, and will sell residual manufacturing equipment to Abingdon Health. Under the agreement Concepta will receive a total cash consideration of approximately £0.3m. This cash will be applied to the Company's working capital requirements.
Whilst the Doncaster site will continue to supply myLotus® testing strips to Concepta, the additional capacity at the facility will support Abingdon as it spearheads the UK Rapid Testing Consortium (UK-RTC) in its programme to deliver a new COVID-19 antibody rapid test. The site will provide Abingdon Health with a fully certified facility to efficiently support the volume requirements of this essential national programme.
The change in manufacturing strategy follows the announcement made on 29 January 2020 that a move to outsourced manufacturing options were being considered to further improve the efficiency of the Company's cost-base, and will allow the team to focus entirely on furthering the Company's portfolio and commercial activities. Having already achieved a 30% cost reduction across the Company, this move to outsource manufacturing is expected to generate annualised overhead costs savings of at least £0.23m.
At 30 June 2019, the most recently published financial results for the Company, the balance sheet value of the assets disposed of to Abingdon Health was £0.37m.
Commenting, Penny McCormick, Chief Executive Officer, commented:
"Our critical products and services are the myLotus® monitor, myLotus® test sticks and the myLotus® app. The decision to outsource manufacturing allows us to have a more agile approach to supplying and developing these assets. It also allows us to focus on turning concepts into commercial products and services that will help women and couples to conceive. We can now focus our efforts on the evolution of our technology to make it more valuable to our end user, whilst striving to give customers a user experience that gets better and better.
"We expect to see a benefit in the first year of over £0.5m due to reduced overheads and receipt of the cash consideration. These funds, along with the proceeds of our recent £1.9m fundraise, will be channelled into our digital marking efforts and commercial activities nationally and then globally, rather than paying for a manufacturing capacity way beyond our current requirements at this stage of our business.
"I have no doubt that as the Company matures we can look again at our manufacturing strategy, but in the meantime I am delighted to be supported by such a capable partner as Abingdon Health, and also pleased to see that the additional capacity of the facility can be used in the efforts to develop and manufacture a badly needed COVID-19 antibody test to be used in the wider the community."
Penny McCormick , Chief Executive Officer
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About Concepta PLC ( www.conceptaplc.com )
Concepta PLC is an AIM-quoted pioneering UK healthcare company that has developed a proprietary product, myLotus®, targeted at the personalized mobile health market with a primary focus on hormone testing and increasing a woman's chances of naturally getting pregnant and to provide insight to unexplained infertility.
myLotus® is currently the only consumer product which allows both quantitative and qualitative home (self-test) test measurement of a woman's personal luteinizing hormone (LH) during ovulation and human chorionic gonadotropin (hCG) hormone level during pregnancy, facilitating higher conception rates and early diagnosis of fertility issues. The proposition of myLotus® is to empower women to better understand their hormone levels and menstrual cycle and help women conceive naturally by identifying their window of fertility and optimal time for conception.
The Company has received CE-mark certification for myLotus® and has launched its first product in the UK. The Company is preparing plans to roll-out across the core EU countries in 2020.
myLotus® is expected to be beneficial to users who have been unable to conceive after 6 months of trying. This highly motivated target group of women won't typically be offered medical intervention until after 12 months of unsuccessfully trying to conceive, with IVF not usually offered until after two years of trying to conceive. Research indicates couples start to take positive action ahead of this time typically with little medical support to help them do so.