TIDMNCYT
RNS Number : 0420Y
Novacyt S.A.
27 December 2019
Novacyt S.A.
("Novacyt", the "Company" or the "Group")
Completion of NOVAprep(R) business sale
Paris, France and Camberley, UK - 27 December 2019 - Novacyt
(EURONEXT GROWTH: ALNOV; AIM: NCYT), an international specialist in
clinical diagnostics, announces it has completed the sale of
NOVAprep(R) assets to Algimed Trade Ltd. ("Algimed"), for a total
consideration of EUR400,000 and a 10% royalty on sales in certain
defined territories. Algimed specialises in complex equipment
supplies for clinical and food testing laboratories and is formerly
the NOVAprep(R) distributor to Belarus.
The sale follows a strategic review by the Board completed in
December 2018. As a result of this review, and as previously
announced, NOVAprep(R) was deemed to be non-core and outside the
Company's in vitro diagnostic products expertise. This sale follows
the successful sale of the Clinical Lab business, completed in July
of this year. The Company will now focus on the expansion of
Primerdesign and Lab21, its profitable core reagent development and
manufacturing businesses.
Consideration
The Company is receiving EUR150,000 in cash on completion.
Following ownership transfer of patents detailed in the executed
asset agreement, the Company will receive the remaining EUR250,000
in deferred payments, in cash over three years as follows:
I. EUR100,000 one year after completion
II. EUR75,000 after two years
III. EUR75,000 after three years
The NOVAprep(R) assets are being sold to Algimed and include the
design and manufacturing rights for the NOVAprep(R) vial and NPS
instrumentation and certain IP and commercial rights. In addition,
Algimed will pay Novacyt a royalty of 10% on sales of NOVAprep(R)
products to certain territories for a period of five years from
completion. Based on the current level of NOVAprep(R) sales to
these territories, this royalty income could contribute EUR150,000
of revenue to Novacyt per annum, although there is no guarantee
that this royalty level will be achieved.
In addition, Algimed has entered into a Transitional Services
Agreement (TSA) for up to twelve months for a one-off payment to
Novacyt of EUR10,000 at completion. This TSA will cover regulatory
and other technical support from Novacyt regarding the CE Mark
accreditation transfer to Algimed.
NOVAprep(R) Closure
During the second half of this year, Novacyt has improved the
NOVAprep(R) financial performance by reducing payroll, closing the
UK operations, reducing the French overhead costs and prioritising
the sale of NOVAprep(R) inventory. During this period of
restructure, NOVAprep(R) has contributed net operating cash to the
Group in excess of EUR0.7m which excludes any consideration from
Algimed.
Following the sale to Algimed, Novacyt will cease taking sales
orders for all NOVAprep(R) products. However, all open and
unfulfilled NOVAprep(R) sales orders placed with Novacyt prior to
24 December 2019 will be fulfilled by the Company in early 2020.
Final closure costs of NOVAprep(R) are estimated at no more than
EUR100,000.
Graham Mullis, Group CEO of Novacyt, commented:
"I am pleased to announce the completion of the sale of
NOVAprep(R), which significantly streamlines our operations and
strengthens our financial position. The sales of the Clinical Lab
and the NOVAprep(R) assets could eventually generate in excess of
EUR2.2m cash during the next five years through a combination of
purchase consideration, royalties and the operational cash inflow
generated in the second half of 2019. I am particularly pleased to
create this value for the benefit of the Company whilst removing
the loss-making Clinical Lab and NOVAprep(R) assets and enhancing
the future profitability of the remaining core businesses.
I am confident that Algimed is the ideal owner of NOVAprep(R)
with its strong track record of servicing cancer and infectious
disease clinical markets so that patients and clinicians can
continue to benefit from the NOVAprep(R) technology.
We will utilise the funds from the transaction for working
capital purposes as we continue to invest in our product offering
and develop new and existing partnerships with global diagnostics
companies. Novacyt remains committed to its core strengths of in
vitro diagnostics product development, commercialisation and
contract manufacturing as we focus on driving value from our
profitable Primerdesign and Lab21 businesses."
This announcement contains inside information for the purposes
of Article 7 of Regulation (EU) 596/2014.
- End -
Contacts
Novacyt SA
Graham Mullis, Chief Executive Officer
Anthony Dyer, Chief Financial Officer
+44 (0)1276 600081
SP Angel Corporate Finance LLP (Nominated Adviser and
Broker)
Matthew Johnson / Charlie Bouverat (Corporate Finance)
Vadim Alexandre / Rob Rees (Corporate Broking)
+44 (0)20 3470 0470
FTI Consulting (International)
Victoria Foster Mitchell / Mary Whittow
+44 (0)20 3727 1000
victoria.fostermitchell@fticonsulting.com /
mary.whittow@fticonsulting.com
FTI Consulting (France)
Arnaud de Cheffontaines / Cosme Julien Madoni
+33 (0)1 47 03 69 48 / +33 (0)147 03 68 19
arnaud.decheffontaines@fticonsulting.com /
cosme.julienmadoni@fticonsulting.com
About Novacyt Group
The Novacyt Group is an international diagnostics business
generating an increasing portfolio of in vitro and molecular
diagnostic tests. Its core strengths lie in diagnostics product
development, commercialisation, contract design and manufacturing.
The Company's lead business units comprise of Primerdesign and
Lab21 Products, supplying an extensive range of high-quality assays
and reagents worldwide. The Group directly serves microbiology,
haematology and serology markets as do its global partners, which
include major corporates.
For more information please refer to the website:
www.novacyt.com
About Algimed Trade Ltd
Algimed is a leading, rapidly developing company that
specializes in complex equipment for laboratories. Algimed offers a
wide range of equipment solutions for laboratories involved in
pharmaceutical analytics, clinical laboratory diagnostics, cell and
molecular biology, forensics, veterinary and food safety. The
Company has a number of exclusive distribution agreements with
world-class manufacturers.
For more information please refer to the website:
www.algimed.com
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END
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