AGM Statement and Trading Update

RNS Number : 0785K

RUA Life Sciences PLC

31 August 2021

 

RUA Life Sciences plc

("RUA", the "Company" or the "Group")

AGM Statement and Trading Update

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 ^TM ), is holding its Annual General Meeting ("AGM") at  11.00am  today.

As previously announced, voting on all resolutions will be conducted by poll based on valid proxy forms received. The results of the poll will be published on the Company's website,  www.rualifesciences.com . At the AGM, the Chairman will make the following statement regarding current trading:

"Good progress is being made across all areas of the Group's business and development plans despite the disruption to supply chains due to Brexit - related customs issues and staff shortages at suppliers as a result of Covid.

Vascular Graft

As previously reported, cellulose contamination was identified in the chemical characterisation testing carried out on samples of the large bore vascular grafts. We are confident that the source of the contamination has been identified and is attributed to cleaning material used on cleanroom production equipment, which manufactured the initial batch of grafts on which the chemical characterisation work was undertaken. Root cause studies have replicate d the transfer of cellulose from cleanroom wipes onto production equipment , and a new cleaning regime has since been implemented. As such, the original chemical characterisations have been shown to be unrelated to actual production and, therefore, the results were discounted due to the contamination issue. R esults from a second study will form the basis of the biological evaluation report for the 510( k ) submission. This new study is now well underway and the final report is expected in a matter of weeks. In conjunction with the third-party chemical characterisation testing, internal studies have been undertaken and it is reassuring that there is no further indication of any cellulose particulate in the extractables, confirming the Company's belief that the contamination was limited to the early production batch.

The 510( k ) submission package for large bore grafts is now in close to final form and is under review by the Board , and John Ely in particular , to identify any areas of potential questioning that the FDA might have and to ensure that they are fully addressed in the submission.  We remain on track for approval to coincide with the availability of clinical product for commercial launch   during the first quarter of 2022. Initial production batches for commercial launch will be validated on the smaller scale development equipment which , depending on product mix , has a manufacturing capacity of over 2,000 units a year. Scale up production equipment has been designed and is now well into the build process at our supplier. This new equipment is highly automated and will allow production capacity to be increased six-fold using the same production footprint as the development equipment. The plan remains to have the scale up equipment fully validated during the second quarter of 2022 thus allowing us to meet growing demand for the grafts.

The Group is actively engaged with distribution partners who are excited to handle the commercial launch of the grafts in the US . Draft contracts have been exchanged which will be finalised in the near term. Interest continues for OEM use of the grafts and those opportunities are being advanced in parallel with our plans for sales into hospitals via distribution partners.

Capacity

It is anticipated that upon ramp up of production of grafts, the capacity of the manufacturing unit based in Irvine will be exhausted. As a result, the Company has recently signed contracts to purchase the neighboring industrial unit in Irvine, which will double the built area available and provide further development opportunities for future expansion. Current plans for the new unit include moving non - production related facilities from the existing unit, allowing the textiles department to expand; building a dedicated Research and Development lab to accommodate new projects and all heart valve related work ; and building new clean room suit e s. Vacant possession is anticipated during October 2021 and initial fit out works will commence by the end of the year.

Recruitment of Senior Executives

The Company previously announced the intention to further strengthen the senior management team within RUA Life Sciences. We are pleased to announce that the key role of Clinical and Regulatory Affairs Director has now been filled with a highly talented and experienced candidate who is expected to join during November 2021 , after completing his notice with his current employer. The new appointee has important experience in achieving regulatory approvals for a number of cardiovascular devices as well as organizing clinical studies and, as such, has strong contacts with many Key Opinion Leading (KOL) surgeons.

The other role is that of Chief Financial Officer and the recruitment process is now underway with Norman Broadbent having been engaged to undertake the search.

RUA Medical

Order intake from the major customer of RUA Medical for US supply has now returned to pre-Covid levels whilst Europe still has a little way to go. Indications from the customer are that it is anticipating high single digit volume growth over the coming year and opportunities are now being considered regarding expanding the range of products supplied by RUA Medical. A long running development project for a global medical device company is also progressing well and the Company is confident of securing a manufacturing contract for medical textile components shortly. This contract can be fulfilled from the current facilities on equipment already installed and validated. Additionally, the RUA Medical Team have been approached by another cardiovascular business looking to have an Elast- Eon ™ enabled device designed and manufactured. This contract builds upon the expertise developed within RUA Medical in both textile engineering and the application of our Elast- Eon ™ polymer. The Board is encouraged by these recent developments as it fits the strategy of RUA Medical, not only being the engine room of in-house projects and manufacture, but of also being a growing profit centre.

Research and Development

Further progress has been made on the manufacture of heart valve prototypes utilising both the 100% Elast- Eon ™ leaflet system and the textile reinforced leaflet. The testing equipment for both hydrodynamic and durability studies is due for installation and commissioning towards the end of September 2021, and we are looking forward to comparing the performance of the two technology platforms.

Patch development continues to make progress with the base fabric now designed and manufactured, however we are currently delayed in having a product ready for design freeze due to unforeseen supply issues for a pump used in the computer-controlled coating equipment. The team is working closely with the supplier to avoid further delay which would have a knock-on effect to starting the necessary ISO testing on the patch.

With the large bore graft development work now into production validation , other group R&D projects are now being considered and planned. A major opportunity relates to utilising the non - thrombogenic properties of Elast- Eon ™ to create a range of small bore grafts to improve the outcomes of patients suffering from Peripheral Artery Disease (PAD) and Critical Limb Ischaemia (CLI). In the UK alone, 176 leg, foot and toe amputations are carried out every week , with diabetes being a major contributory factor to the lack of blood flow as the root cause of these amputations. Current small bore graft products have relatively poor long-term graft patency compared to large bore grafts and, therefore,   improving the long - term performance of grafts would play a major role in improving patient quality of life and reduce the burden on the health service. With this in mind, RUA has recently submitted a grant application through the UK Government Innovation Funding Service for part funding of a feasibility study on such a device.

David Richmond

At the conclusion of the AGM, David will retire from the Board and the Company. David has had a career spanning 44 years in textiles initially with his family lace firm and latterly having founded RUA Medical to become an innovator in medical textiles. David should rightly be proud of what he has achieved in those 44 years but similarly should look forward to enjoying his retirement and catching up on the outdoor activities he so much enjoys but has had to sacrifice as he built RUA Medical. I would like to take this opportunity to personally, and on behalf of the Company and our shareholders , t hank David for his outstanding contribution to the G roup and wish him a long and happy retirement."

For further information contact:

RUA Life Sciences

Bill Brown, Chairman                                                            Tel: [phone]  

Dr Caroline Stretton, Group MD                                             Tel: [phone]

Shore Capital  (Nominated Adviser and Joint Broker)   Tel: [phone]  

Tom Griffiths/David Coaten                                           

Cenkos Securities   plc  (Joint Broker)                                Tel: [phone]

Max Gould, Giles Balleny  (Corporate Finance)

Michael Johnson  (Sales)

About RUA Life Sciences

The RUA Life Sciences group was created in  April 2020  when RUA Life Sciences Plc (formerly known as AorTech International Plc) acquired RUA Medical Devices Limited to create a fully formed medical device business. RUA Life Sciences is the holding company of the Group's four trading businesses, each exploiting the Group's patented polymer technology.

Our vision is to improve the lives of millions of patients by enabling medical devices with Elast Eon ^TM , the world's leading long-term implantable polyurethane.

Whether it is licensing Elast Eon ^TM , manufacturing a device or component, or developing next generation medical devices, a RUA Life Sciences business is pursuing our vision.

ElastEon ™'s biostability is comparable to silicone while exhibiting excellent mechanical, blood contacting and flex-fatigue properties. These polymers can be processed using conventional thermoplastic extrusion and moulding techniques. With over 7 million implants and 14 years of successful clinical use, RUA's polymers are proven in long-term life enabling applications.

The Group's four business units are:

RUA Medical :	End-to-end contract developer and manufacturer of medical devices and implantable fabric specialist.
RUA Biomaterials :	Licensor of Elast-Eon TM  polymers to the medical device industry.
RUA Vascular:	Development of large bore polymer sealed grafts and soft tissue patches.
RUA Structural Heart :	Development of tri leaflet polymeric heart valves.

A copy of this announcement will be available shortly at  www.rualifesciences.com/investor-relations/regulatory-news-alerts .

 

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