Portfolio Update

RNS Number : 9370N

Tern PLC

04 February 2021

 

4 February 2021

Tern Plc

("Tern" or the "Company")

Portfolio Update

Tern Plc (AIM:TERN), the investment company specialising in the Internet of Things ("IoT"), is pleased to provide an update on the recent activities of the Company and a number of its portfolio companies, being Device Authority Limited ("Device Authority"), FVRVS Limited ("FundamentalVR") and Talking Medicines Limited ("Talking Medicines").

Highlights

· A further contract win for Fundamental VR valued at approximately US$0.7 million.

· Talking Medicines is today launching its artificial intelligence and natural language processing powered patient intelligence platform, PatientMetRx, to provide a systematic way of measuring the patient experience of medicines for the pharmaceutical industry.

·   In order to provide Device Authority with further working capital to facilitate its significant pipeline of opportunities, Tern has provided an additional approximately US$0.3 million to Device Authority in the form of a further convertible loan, alongside an additional convertible loan investment of approximately US$0.1 million from Alsop Louie Partners and the George Samenuk Trust.

· As at 31 December 2020, Tern had unaudited cash resources of £2.1 million, with approximately £0.38 million subsequently invested in its portfolio companies, Device Authority and Wyld Networks Limited ("Wyld Networks"), as part of their recent syndicated fundraisings.

Commenting Al Sisto, CEO of Tern, said :

"The momentum with our portfolio companies highlighted in the 12 January 2021 update continues.  We announced Wyld Networks' fundraising on 28 January and I am pleased to note further progress by three of our other portfolio companies.

"FundamentalVR continues to win more important contracts and the launch today of PatientMetRx by Talking Medicines is, I believe, a milestone achievement for them.  The systematic data driven tools that other industries use to measure customer experience have not previously been available to pharmaceutical companies at scale and the industry has to date relied on indirect feedback from clinicians, patient advocacy or ad hoc focus groups.  We believe that PatientMetRx addresses this issue by providing feedback from patients that provides a very valuable insight tool for pharmaceutical companies.

"The calibre of the speakers at the virtual IoT security summit that Device Authority is running later this month highlights Device Authority's standing in the market and I look forward to updating on its progress in due course.

"I believe that particularly given the strong fourth quarter 2020 business performance of the portfolio companies, that has continued into the current year, we are very well positioned.  The Board of Tern believes that the Company's cash resources are sufficient for its current needs, including developing the portfolio and supporting the progress of its portfolio companies, taking into account the expectation of the availability of third-party funding to assist the development of the portfolio companies as appropriate."

Device Authority

Tern has a 56.8% holding in Device Authority (A shares) and as at 30 June 2020 this had a book valuation of £13.8 million.  The previously reported convertible loan balance was US$4 million and Tern also holds 12,406 B shares in Device Authority. Device Authority's B shares are non-voting, and in conjunction with its C shares, participate in 25% of the net proceeds on a liquidity event.

As highlighted in the Company's portfolio update announced on 12 January 2021, despite the disruption caused by the COVID-19 pandemic, Device Authority finished 2020 strongly, closing five key orders in its primary sectors in Q4 2020.  This momentum has continued into the current year and in order to provide Device Authority with further working capital to facilitate its significant pipeline of opportunities, Device Authority has raised an additional approximately US$0.4 million. Tern has provided approximately US$0.3 million of this in the form of a further convertible loan, bringing Tern's total convertible loan balance in Device Authority to approximately US$4.3 million.  The remainder has been provided by Alsop Louie Partners and the George Samenuk Trust who have provided their pro rata share alongside Tern on the same terms. These additional convertible loans have a maturity date of 31 March 2021 and have otherwise been issued on the same terms as the second tranche of convertible loan notes to Device Authority, details of which can be found in the Company's announcement of 28 December 2017. 

On 23 and 24 February 2021, Device Authority is holding a 'Virtual IoT Security Summit', with expert speakers and strategic partners from some of the largest global players in the cyber identity and access management ("IAM") sector.  As protecting IoT devices, applications and data has become even more business critical, this event is designed to provide key opinion leadership on managing the entire IoT security lifecycle, preparing organisations for the realities of automating, and managing, large-scale global IoT deployments in the automotive, Industrial IoT and medical device/healthcare (IoMT) sectors, highlighting some real examples and use cases.  Support from Device Authority's strategic partners such as Microsoft Azure, EPS Global, Venafi and others highlights the ecosystem required to execute the secure IoT lifecycle from secure manufacturing, to protecting applications, data and assets, as well as integrating IoT assets into the security operations existing in an enterprise.

FundamentalVR

Tern has a 26.9% holding in FundamentalVR and as at 30 June 2020 this holding had a book valuation of £3.0 million.

Following the three important contract wins announced by FundamentalVR in late November and early December 2020, for a combined value of £1.7 million, FundamentalVR has secured a further contract with a leading pharmaceutical company to utilise its unique HapticVR technology.

The contract is with an existing client and expands the use of FundamentalVR's solution within the client's organisation and has a total value of US$0.7 million, with FundamentalVR being expected to recognise this revenue in 2021.

The contract covers configuration and allows for a scaled rollout of a virtual reality simulation, delivering accelerated, safe and compliant use of their innovative solution by using the FundamentalVR platform. The project combines the real-life deployment of devices with virtual 'Digital Twins' of those devices, with which clinicians are able to interact with virtual patient tissue, and also enables remote training and mentoring of those participating in the simulations.

Talking Medicines

As announced on 4 November 2020, Tern invested £0.86 million for a 23.4% equity stake in Talking Medicines.

Talking Medicines is a social intelligence company designed specifically for the pharmaceutical industry. By structuring and translating the patient's voice on social media into actionable intelligence, it focuses on assisting pharmaceutical companies in delivering a greater return on investment for marketing and delivering better health outcomes for patients.

Talking Medicines is today launching PatientMetRx, its artificial intelligence ("AI") and natural language processing ("NLP") powered social intelligence service, to provide pharmaceutical companies with insights on patient experience on a scale and depth not previously possible.

Powered by Eva, a proprietary AI machine developed by Talking Medicines, PatientMetRx combines machine learning and NLP to capture the voice of the patient from millions of conversations taking place over multiple sources including social media, forums and blogs, mapped to a curated database of 130,000 regulated global medicines.  It distils what patients are saying online, and what they are feeling, into powerful data insights to provide pharmaceutical companies with a systematic way of measuring patient experience towards medicines.

Talking Medicines will sell PatientMetRx on a subscription basis to clients.  Delivered on a digital dashboard, PatientMetRx provides pharmaceutical companies with a 'Patient Confidence Score' to benchmark each medicine, offering a systematic way of understanding trending patient confidence in their drug brands.  Tracking this Patient Confidence Score enables them to more accurately measure the effectiveness of marketing campaigns, reduce budgets, improve market competitiveness and deliver better health outcomes for patients.

Company's Cash Resources

As at 31 December 2020, the Company had unaudited cash resources of £2.1 million.  Following investments, of an aggregate of approximately £0.38 million, in its portfolio companies, Wyld Networks and Device Authority, post 31 December 2020, the Board of Tern believes that the Company's cash resources are sufficient for its current needs, including developing the portfolio and supporting the progress of its portfolio companies, taking into account the expectation of the availability of third-party funding to assist the development of the portfolio companies as appropriate.

Enquiries

Tern Plc Al Sisto (CEO) Sarah Payne (CFO)	via IFC Advisory
Allenby Capital Limited (Nominated Adviser and Broker) David Worlidge / Alex Brearley (Corporate Finance) Guy McDougall (Equity Sales and Corporate Broking)	Tel: [phone]
IFC Advisory (Financial PR and IR) Tim Metcalfe Graham Herring Florence Chandler	Tel: [phone] [e-mail]

 

END

 

 

PFUFXLLBFLLLBBX