Acquisition of home-use genetic testing company
23 November 2020
Concepta PLC (AIM: CPT), the personalised healthcare company, announces the acquisition ("Acquisition") of 100% of the outstanding share capital of The Genome Store Ltd ("The Genome Store"), a provider of home-administered postal genomic test services, for an initial consideration of £0.28m payable in shares, and a deferred consideration of up to £0.24m payable in shares and linked to performance milestones.
The Genome Store, based in the Manchester Science Park, has developed a number of genomic - or DNA - tests covering a range of female and male wellness, food intolerance and lifestyle testing. A sample can be quickly and conveniently taken at home using simple oral or nasal collection swabs which are then sent via free postage for processing using established laboratory-based DNA and RNA detection methods.
An initial portfolio of tests will be launched in Q4 2020, with a pipeline of further tests to be commercialised from Q1 2021. The service is expected to be rebranded under Concepta ownership and the portfolio launched under a new brand. The Company will update shareholders on the launch in due course.
The co-founders, Bhavika Patel, Dr Greg Fitzgibbon, Jane Kelly and Dr Paul Docherty will join Concepta's Scientific Advisory Board, and Jane Kelly, Operations Director at The Genome Store will become an employee at Concepta.
The Acquisition delivers on one of Concepta's key strategic areas of focus as shared in September, namely growing the Company's product portfolio into other areas of personalised health and female health products. The genomic testing service provides a complementary portfolio of products to Concepta's personalised fertility tracker, with additional products being developed that focus on women's health testing.
It provides Concepta with a compliant laboratory set up, high throughput testing capacity and additional revenue streams derived from a scalable business model. Concepta is now able to offer its customers a wider range of healthcare products including an efficient, accurate and cost effective genomic testing service, which gives them control of their own health and access to highly personalised testing from the comfort of their own home. DNA testing is a non-invasive, highly accurate testing method that provides a high level of certainty by interpreting the 'blue print' of our genes, rather than giving a snapshot in time. This enables the customer to make decisions on how best to self-manage their health based on their genetic makeup.
As COVID-19 has revolutionised the at-home testing space and impacted consumer behaviour, Concepta's broader portfolio will provide commercial opportunities in line with the growth of the sector. According to Deloitte in their Health Solutions 2020 Survey of Health Care Consumers , customer behaviour has evolved since pre-COVID, where consumers were most comfortable using at home tests for diagnosing infections. Since COVID, behaviour has changed significantly, with Deloitte identifying that 30% - 50% of consumers are now comfortable using at home testing for a variety of wellness and prevention strategies, including identifying predispositions, tracking health conditions, and diagnosis.
Penny McCormick, Chief Executive Officer of Concepta plc, commented:
"Through our close work with our MYLO customer base throughout 2020, we have understood first-hand our customers' needs for affordable, connected, convenient health testing. The shift in mindset throughout 2020 has accelerated not only the acceptance of remote healthcare, but the expectation of it and desire for it.
"The incorporation of this development and operational expertise into Concepta provides a platform on which to broaden our horizons to develop new commercial relationships, and unlocks our potential to develop an exciting portfolio of at-home tests that supports families as they increasingly seek to take care of their own wellbeing from their own home. As the testing horizon changes, we look forward to working with our new team in the expansion and launch of our initial development pipeline. We remain committed to the development of connected technology through our fertility testing platform, whilst adding to our portfolio to support personalised family health."
The initial consideration comprises £0.28m to be paid upfront upon completion, along with a deferred consideration element of up to £0.24m subject to agreed performance milestones being met. The initial consideration is to be satisfied by the issue of 28m new ordinary shares of 0.1p each ("Ordinary Shares") in the capital of the Company at a price of 1p per share.
The deferred consideration is payable against the achievement of revenue targets ranging from £1.5m to £2m for 2021 together with other operational criteria including new product development and commercialisation targets. The deferred consideration will be satisfied in new Ordinary Shares at a price of 1p.
Financial information for The Genome Store
The Genome Store was incorporated in November 2019 and has not as yet filed any accounts. Its unaudited management accounts for the period from incorporation to 25 October 2020 showed revenue of £1,356 and a net loss before tax of £2,954. As at 25 October 2020 The Genome Store had a net asset value £(2,954).
Admission of the New Ordinary Shares to trading on AIM and Total Voting Rights
Application will be made for admission ("Admission") of the 28m New Ordinary Shares in respect of the Initial Consideration to be issued on the AIM Market of the London Stock Exchange. Admission is expected to take place on or around 26 November 2020.
The New Ordinary Shares will, when issued, be credited as fully paid and will rank equally in all respects with the existing Ordinary Shares, including the right to receive any dividend or other distribution declared, made or paid after Admission.
For the purposes of the Financial Conduct Authority's Disclosure and Transparency Rules ("DTRs"), the issued ordinary share capital of the Company following Admission will consist of 517,821,675 Ordinary Shares with voting rights attached (one vote per Ordinary Share). There are no Ordinary Shares held in treasury. This total voting rights figure may be used by shareholders as the denominator for the calculations by which they will determine whether they are required to notify their interests in, or a change to their interest in, the Company under the DTRs.
Penny McCormick , Chief Executive Officer
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Maddy Kennedy, Chief Financial Officer
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About Concepta PLC ( www.conceptaplc.com )
Concepta PLC, based in Cardiff, is an AIM-quoted pioneering UK healthcare company that has developed a proprietary product MYLO, 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.
MYLO is currently the UK's 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 MYLO 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 MYLO and has launched its first product in the UK. The Company is preparing plans to roll-out across the core EU countries in 2020 and 2021.
MYLO 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.