RUA Life Sciences plc (AIM: RUA.L), the holding company of a group of medical device businesses focused on the exploitation of the world's leading long-term implantable biostable polymer (Elast-Eon™), is pleased to provide the following update on each of the Group companies for the six months ended 30 September 2020 (the "Period"):
RUA Biomaterials - the licensor of Elast-Eon™ - performed slightly below the Board's expectations with licence income of some £214,000 for the Period. This was driven by a reduction in deliveries of Elast-Eon™ for Covid-19 related reasons. However, an element of catch up is anticipated in the second half due to minimum annual order quantities being set out in supply agreements. A recent review of this business area coupled with RUA's recent direct experience of developing devices enabled by Elast-Eon™ has re-confirmed the benefits of this co-polymer in long-term implantable devices. Our manufacturing partner, Biomerics, has recently renegotiated a key supply agreement securing long-term orders for Elast-Eon™ at better pricing with benefits starting to accrue in the next financial year. In order to support Biomerics' sales efforts and to raise the profile of Elast-Eon™, we have recently commissioned a dedicated Elast-Eon™ website targeted at device design engineers. It is anticipated that the new site will launch during the first quarter of 2021.
RUA Medical Devices - the business which was acquired at the start of the Period was impacted by a reduction in customer orders due to Covid-19. Revenues for the Period amounted to around £415,000 which, as previously announced, was a shortfall of some £300,000 on the pre-Covid-19 run rate. This shortfall was mitigated by a combination of cost reduction and use of the Furlough scheme coupled with the receipt of £150,000 of grant finance. As a result, RUA Medical Devices was able to work within its own cash resources without the need to call on Group support. We understand from RUA Medical Devices' principal customer that its own orders from hospitals have now returned to pre- Covid-19 levels indicating not only the return of elective surgeries, but also a small element of catch up. We anticipate that this will be reflected in order levels, which are currently running at around 90% of pre-Covid-19 levels, increasing further over the next quarter.
RUA Vascular - the business commercialising large bore vascular grafts, cardiac and vascular patches - has made very good progress over the Period as reflected in the Company's announcement released on 9 October 2020. The products are currently performing well in regulatory testing as part of the data collection for the FDA 510k application. Good progress is also being seen in commercial discussions for both OEM and distribution supplies to the key North American markets. We have also seen interest from European distributors and, as a result, our regulatory team is now investigating accelerating the work required to market both the patches and grafts into Europe.
RUA Structural Heart - the business developing tri-leaflet polymeric heart valves for both surgical and catheter-based implantation is also making good progress. The most recent valve system manufactured looks very promising and, as a result, we have elected to undertake additional pilot testing of the surgical valve earlier than anticipated. Results from hydrodynamic testing are due over the next month and a short-term durability trial will also be conducted in the next few months to further assist in validating the computational modelling of the valve system. Protocols are being discussed with an animal testing facility with considerable experience in helping develop commercial heart valves regarding undertaking a pilot study of the surgical valve in animals.
RUA Life Sciences - the holding company for the Group and group treasury - had a cash position at the Period end of £1,009,000 (31 March 2020: £1,976,000). This cash burn includes the cash element of the consideration payable for the acquisition of RUA Medical Devices in April 2020 together with additional R&D costs. The working capital cycle of RUA Medical Devices benefits from pre-payments from a large customer and the Group cash position at 21 October 2020 had increased to approximately £1.63 million.
Bill Brown, Chairman of RUA Life Sciences, stated: "Over the past six months, RUA Life Sciences has transformed into a fully formed medical device manufacturer and the new product development projects, particularly grafts and patches, have moved well beyond R&D activities and are now firmly into later commercialisation phase. I look forward to RUA continuing to make further substantive progress over the next half year."