Milestone at RUA Vascular & Trading Update

RNS Number : 1198R

RUA Life Sciences PLC

03 November 2021

 

  RUA Life Sciences plc

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

Significant Milestone at RUA Vascular

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 ™), is pleased  to announce the submission by RUA Vascular to the US Food and Drug Administration ("FDA") of its Premarket Notification (510k) for a range of polymerically sealed vascular grafts.  In addition, it is providing the following update on each of the Group companies for the six months ended 30 September 2021 (the "Period"):

RUA Vascular  - the business commercialising large bore vascular grafts, cardiac and vascular patches - is delighted to announce the submission to the FDA of its Premarket Notification (510k) for a range of polymerically sealed vascular grafts. This follows an introduction of   the RUA graft at the recent annual meeting of the European Association for Cardio-Thoracic Surgery (EACTS) held in Barcelona. The unmet need for non-biogenic devices was discussed broadly at the meeting and interest in implanting the RUA grafts was expressed by both US and European surgeons confirming to the Board the Company's   plans for launch strategy and distribution channels. Interest from potential industry partners continues and a further two non-disclosure agreements have been entered into to allow incorporating RUA grafts into currently marketed devices. The Company's R&D team now has a major task of validating production equipment in advance of the commercial launch of grafts during the first quarter of 2022.

The delays to patch production equipment have been resolved and prototype production is now underway. The regulatory pathway for patches is very similar to grafts and, based on current design parameters, will utilise much of the data currently submitted to the FDA for grafts. Th e Company has been advised that it would be better to run two applications relying on the same data in series rather than in parallel to avoid compromising either submission. As such, the patch 510k submission will now follow on from the graft   510k approval. This revised regulatory submission strategy also allows the Company to focus resource on a feasibility study into Peripheral Artery Disease and Critical Limb Ischemia devices for which the Company was successful in competing for Innovate UK grant finance. This exciting new project, which the Board hopes will add to the product pipeline, will be undertaken during the first quarter of 2022.

RUA Biomaterials -  the licensor of Elast-Eon™ - performed ahead of the Board's expectations with royalties on shipments of Elast-Eon™ by the Company's manufacturing licensee, Biomerics, growing in the Period by 22 per cent. (in US$) over the same period last year. Sales of Elast-Eon™-enabled devices by other licensees also continue to grow with one licensee reaching its annual royalty cap (US$200k) for the calendar year 2021 in the first quarter. As such, revenues from this licensee will not be recognised during the first half (2020: $100,000) resulting in a more extreme second half weighting in royalties. All royalty and license fees are US$ denominated and the strengthening of Sterling has also impacted reported revenues which for the six months to 30 September 2021 are expected to be £156,000 (2020: £216,000). The Company's manufacturing partner, Biomerics, is currently undertaking an expansion of its Elast-Eon™ manufacturing capacity and further increasing marketing activities relating to its polymer offering.  It is also pleasing to report that RUA's Intellectual Property portfolio has been enhanced with the granting of a new European patent titled: "PROCESS FOR THE PREPARATION OF POLYURETHANE SOLUTIONS BASED ON SILICON-POLYCARBONATE DIOLS."

RUA Medical Devices (" RUA Medical") - order intake from RUA Medical's major customer for US supply has now returned to pre-Covid levels whilst Europe remains behind pre-COVID levels. Revenues for the six months to 30 September 2021 increased by 33 per cent. to £552,000 over the same period last year (2020: £ 416,000).  

A recent review of the resources available to RUA Medical and competing demands for those resources from group wide development plans has resulted in a slight change to RUA Medical's business model to ensure that priority is given to long term strategic opportunities that can add a minimum of 10 per cent. to RUA Medical revenues together with Group projects.

In line with this revised strategy, RUA Medical has been involved in a long running development project for a global medical device company. The time invested in this project has resulted in a new income stream from manufacturing medical textile components, which is expected to commence in the second half of this financial year.

Investment in plant and equipment has continued to support scale up in graft production, with some £280,000 added in the Period.  Furthermore, an additional factory unit adjacent to the Company's Irvine facility is being acquired, which will increase footprint by around 40 per cent. The purchase is due to complete on 5 November 2021.

The good work within RUA Medical has recently attracted external endorsement, with the Company being awarded the Scottish Engineering's prestigious President's Award for Excellence.

RUA Structural Heart  - the business developing tri-leaflet polymeric heart valves for both surgical and catheter-based implantation - has continued to progress over the Period. Polymers and non-biogenic valve options are now being openly discussed at influential global surgical meetings as being the future and RUA is being mentioned in those discussions. RUA is now conducting in-house testing on a family of polymeric valves utilising Elast-Eon™ as the enabling polymer. In addition to the 100% polymeric leaflet system designed over the last two years, RUA has now been able to replicate a low stress design in a composite material comprising textile and Elast-Eon™. Initial hydrodynamic testing looks very promising and has the potential to take valve durability to a much higher level whilst reducing the risk of failure.  

RUA - the holding company for the Group and group treasury - had a cash position at the Period end of 4,763,000 (31 March 2021: 6,293,000). This cash burn includes the final element of the consideration payable for the acquisition of RUA Medical in April 2020 together with additional R&D costs and capital investment. The Company previously announced the intention to further strengthen the senior management team within RUA. The role of Clinical and Regulatory Affairs Director has now been filled and the appointee is due to start on 16 November 2021. Additionally, the process of recruiting a Chief Financial Officer has also now concluded with the successful candidate expected to start next month, with a further announcement to made upon their commencement.

Bill Brown, Chairman of RUA Life Sciences ,  stated : " I am very happy with the developments at RUA. Our two revenue generating businesses are growing, RUA Vascular has reached a major milestone in submitting for regulatory clearance to market and with the risk in biogenic material becoming a serious topic of conversation, our strategy of exploiting Elast-Eon^TM in both Vascular and Heart Valve devices is now very much of the moment."

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 ElastEon^TM, the world's leading long-term implantable polyurethane.

Whether it is licensing ElastEon^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 8 million implants and 15 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-EonTM 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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