TIDMBELL
RNS Number : 3827X
Belluscura PLC
20 December 2023
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION AS STIPULATED
UNDER THE UK VERSION OF THE MARKET ABUSE REGULATION NO 596/2014
WHICH IS PART OF ENGLISH LAW BY VIRTUE OF THE EUROPEAN (WITHDRAWAL)
ACT 2018, AS AMENDED. ON PUBLICATION OF THIS ANNOUNCEMENT VIA A
REGULATORY INFORMATION SERVICE, THIS INFORMATION IS CONSIDERED TO
BE IN THE PUBLIC DOMAIN.
Belluscura plc
("Belluscura" or the "Company")
Chinese registration and Trading Update
Chinese approval granted with immediate effect for Belluscura's
X-PLOR Portable Oxygen Concentrator
LONDON, U.K. and PLANO, TX, U.S. (20 December 2023). Belluscura
plc (AIM:BELL), a leading medical device developer focused on
lightweight and portable oxygen enrichment technology, announces
that it has received approval from the National Medical Products
Administration (NMPA) to distribute the X-PLOR(R) portable oxygen
concentrator (POC) in China.
China is part of the licensed territory covered by the Exclusive
License Agreement with InnoMax Medical Device Technologies for the
manufacture and distribution of Belluscura's portable oxygen
concentrators, which was announced in August 2023. With this
approval secured, Belluscura has now entered into negotiations with
several distributors in China.
China has nearly 100 million people* suffering from Chronic
Obstructive Pulmonary Disease (COPD). As part of the InnoMax
license, Belluscura will work with the distributors on marketing
and sales in China. Royalties will begin with the first sale in
China. InnoMax will pay a minimum royalty and a share of profits on
the X-PLOR device and accessories. The license is supported by
Belluscura's recently issued Chinese National Patent ZL 2018 8
0037386 which, among other features, covers its proprietary
ModulAir(TM) technology.
Belluscura has now concluded three sizeable registrations within
the Asian market, being Hong Kong on 26(th) September, Singapore on
12(th) December and China today. The estimated oxygen concentrator
market size for the Asia Pacific region is expected to grow to
nearly $1 billion in just 6 years**.
Trading Update
The results for FY23 are marginally below management
expectations at the EBITDA level while prospects for 2024 remain
unchanged. With the proceeds from the funds raised in early October
2023, together with the anticipated resources from TMT Acquisition
plc on completion of the offer, the enlarged group will have
sufficient working capital to meet Belluscura's growth plans
through to becoming cash flow positive.
With the delay to the Chinese NMPA approval and to the offer,
the Company has focused on the Direct to Consumer (DTC) business
during the second half of 2023, resulting in higher margin sales
but lower sales volumes and revenue. The new DTC programme has
shown early success nearly tripling in current and recurring
revenue in just 3 months from inception, yielding a gross margin in
excess of 70%.
As a consequence of the delays, the Company has held back on
marketing and advertising spend to preserve cash resources and also
reduce operating costs in the period. However, now that it has both
Chinese registration and expanded manufacturing about to commence,
any deferred revenue in the last quarter is expected to be made up
in early 2024.
The DISCOV-R(TM) continues to have significant B2B and DTC
interest with deposits taken so far being made on a list price of
$3,000. The Company now expects to launch the device in early
February 2024, with a full marketing and commercial launch planned
for March 2024. A number of vendors contracted to distribute the
device have said it will be the only POC they will stock due to its
broad clinical coverage.
Management remains confident that B2B and DTC sales of the
X-PLOR will be in line with previous expectations. The introduction
of a new aluminium sieve design will result in a longer usable life
span and significantly lower input costs compared with the current
polymer-based design. With the release of the new sieve design, the
Company will divest the materials held in inventory relating to the
older design which will add to our cash resources. Once in full
production, the Company expects an approximate 50% increase in
gross margin resulting from this improved sieve design.
Manufacturing of the X-PLOR will expand in China following
announcement of the NMPA approval and InnoMax will now begin
manufacturing several components for the DISCOV-R by March 2024
with full production in China expected by Q3 2024.
Additionally, the CE and UKCA mark for the X-PLOR is expected at
the beginning of Q2 2024, enabling the Company to begin
negotiations with distributors in the UK and Europe.
The outlook for 2024 remains positive, as the Company
anticipates continued improvement of gross margins through the
improved sieve design, DTC and DTC leasing programmes and continued
robust market pricing.
Bob Rauker, Chief Executive Officer, Belluscura plc,
commented:
"We are delighted to have received approval in China which has
taken over approximately 10 months. This enables us to launch sales
into China with immediate effect. With our arrangement with InnoMax
in place, we are confident that we can now deliver on the
significant potential for our products in this large and growing
market.
"The approval in China, Singapore and Hong Kong are the first
steps in leveraging the InnoMax agreement to expand in the ASEAN
region and to distribute our portable oxygen concentrators in new
markets, enhancing the lives of those with COPD and building market
share in the process.
"Building any start up business is never easy, particularly
within the MedTech world and in the current economic environment.
After two years of testing, developing and refining our products,
the Board is very confident that Belluscura is now well placed to
take advantage of the significant opportunities it has in 2024 and
beyond."
* Advancing COPD care in China through a comprehensive approach (who.int)
**
www.coherentmarketinsights.com/market-insight/oxygen-concentrators-market-198
For further information please contact:
Belluscura plc Tel: +44 (0)20 3128 8100
Adam Reynolds, Chairman
Robert Rauker, Chief Executive
Officer
Simon Neicheril, Chief Financial
Officer
SPARK Advisory Partners Limited Tel: +44 (0)20 3368 3550
Nominated Adviser
Neil Baldwin / Jade Bayat
Dowgate Capital Limited Tel: +44 (0)20 3903 7715
Broker
Russell Cook/Nick Chambers
MHP Tel: +44 (0)20 3128 8100
Financial PR & Investor Relations email: Belluscura@mhpgroup.com
Katie Hunt/Matthew Taylor
About Belluscura plc ( www.belluscura.com)
Belluscura is a UK medical device company focused on developing
oxygen enrichment technology spanning broad industries and
therapies. Our innovative oxygen technologies are designed with a
global purpose: to create improved health and economic outcomes for
the patients, healthcare providers and insurance organisations.
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December 20, 2023 02:00 ET (07:00 GMT)
Belluscura (LSE:BELL)
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