TIDMPXS
RNS Number : 2832H
Provexis PLC
31 July 2019
31 July 2019
Provexis plc
("Provexis" or the "Company")
Trading update
Provexis, the business that develops, licenses and sells the
proprietary, scientifically-proven Fruitflow(R) heart-health
functional food ingredient, is pleased to provide an update on
trading following the end of its financial year on 31 March
2019.
In its preliminary results statement currently scheduled for
early September the Company expects to report on another strong
year of progress.
The Company expects to report revenues for the year ended 31
March 2019 of GBP322k, a 37% year on year increase (2018: GBP236k),
reflecting:
-- An increase in the net income received from the Company's
Alliance Agreement with DSM, which grew by 22% to GBP198k in the
year (2018: GBP163k);
-- An increase in revenue net of sales rebates from the
Company's Fruitflow+ Omega-3 business, including Holland &
Barrett, the Company's website www.fruitflowplus.com and Amazon UK.
This business grew by 34% to GBP98k, net of sales rebates, in the
year (2018: GBP73k).
-- Amounts in excess of GBP26k which were received in the year
for marketing support, compared to amounts of GBPNil which were
received in the prior year.
Underlying operating loss for the year was GBP385k (2018:
GBP362k), reflecting a GBP48k year on year increase in research and
development costs which was primarily due to Fruitflow blood
pressure lowering patents entering the national phase of the patent
application process, a one-off event in the process which
represents the most significant pre-patent grant costs.
BY-HEALTH Co., Ltd.
The Company has previously announced it was working with DSM and
BY-HEALTH Co., Ltd ('By-Health'), a GBP3bn listed Chinese dietary
supplement business, to support the planned launch of some
Fruitflow based products in the Chinese market.
The Company stated in its interim results in December 2018 that
further potential research projects for Fruitflow between the
Company and By-Health were under active discussion, and the Company
can now confirm that Provexis and By-Health have been working on a
proposed new framework research collaboration agreement for
Fruitflow, which is planned to be at By-Health's sole expense. It
is envisaged that the proposed agreement will assist By-Health in
its commercialisation plans for Fruitflow, and strengthen further
the close relationship between By-Health and Provexis. The Company
expects to be able to announce further details of this proposed new
collaboration in the near future, but there is no certainty at the
time of writing that a collaboration agreement will be entered
into.
The planned launch of a number of Fruitflow based products in
the Chinese market, with potential volumes at a significant
multiple of existing Fruitflow sales, is progressing well, with
activities driven at present by the need to obtain 'blue cap'
health claim status for Fruitflow as a dietary supplement with the
State Administration for Market Regulation (SAMR), a new Chinese
market regulator which has taken over the responsibilities of the
former China Food and Drug Administration (CFDA).
Clinical studies conducted in China are typically required to
obtain blue cap health claim status, and a significant investment
in seven separate studies, in support of the Fruitflow based
products which By-Health plans to launch in China, is being
undertaken at By-Health's expense.
Three studies have been successfully completed in China, three
studies are currently ongoing at Chinese clinical sites and a
further planned human study in 2019 has been confirmed by
By-Health.
The three completed studies (a human study and two animal
studies) showed excellent results in use for Fruitflow, and they
provide strong evidence for By-Health in its blue cap and other
regulatory submissions to the SAMR for Fruitflow, supported by the
Company's existing European Food Safety Authority ('EFSA') health
claim for Fruitflow.
If a successful blue cap health claim is achieved for Fruitflow
it would currently be expected to result in some significant orders
for the product, potentially at a multiple of current total sales
values. The Company will provide shareholders with as much
information as it can on the timing of this highly commercially
sensitive and potentially transformative process, subject to the
multi-party confidentiality arrangements which inevitably surround
the process.
Fruitflow - DSM Nutritional Products
The Company's Alliance partner DSM Nutritional Products ('DSM')
has continued to develop the market actively for Fruitflow in all
global markets. More than 90 regional consumer healthcare brands
have now been launched by direct customers of DSM, and a number of
further regional brands have been launched through DSM's
distributor channels.
The Company and DSM have seen an encouraging increase in brand
awareness and customer interest in Fruitflow over the last three
years, with an increasing number of further commercial projects
being initiated with prospective customers, including some
prospective customers which are part of global businesses.
The Company continues to work closely with DSM, seeking to
support various prospective customers globally with their
commercialisation plans for Fruitflow, and the total projected
annual sales value of the prospective sales pipeline for Fruitflow
continues to stand at a substantial multiple of existing annual
sales.
Fruitflow+ dietary supplement products
In August 2018 Fruitflow+ Omega-3 was launched in more than 660
Holland & Barrett stores across the UK and Ireland, giving
Fruitflow+ Omega-3 widespread consumer exposure.
The product listing has been supported by a number of ongoing
staff training, consumer marketing and promotional initiatives, to
include Holland & Barrett's in-house Healthy magazine and its
website www.hollandandbarrett.com.
Fruitflow+ Omega-3 is available to purchase from Amazon UK and
from the Company's e-commerce website www.fruitflowplus.com which
is particularly focussed on subscription orders. The product has a
Facebook page at www.facebook.com/FruitflowPlus and a newly
developed Instagram page at www.instagram.com/fruitflowplus.
The Company believes that Fruitflow has an important role to
play in women's cardiovascular health, and it has recently launched
a dedicated new section of its consumer website here
www.fruitflowplus.com/womens-health. The Company sponsored the
annual MegsMenopause conference in May 2019, and delivered a
high-profile presentation at the conference.
A dedicated product video for Fruitflow+ Omega-3 was launched in
March 2019, and a Fruitflow App is also being developed, primarily
for use on mobile device platforms.
Further interest in the role of Fruitflow in exercise was
generated by Team Sunweb Pro Cycling's use of Fruitflow in the 2018
Tour de France, and the Company is progressing the formulation and
launch of a Fruitflow+ nitrates dietary supplement product which
was used by Team Sunweb in the 2019 Tour de France
www.fruitflowplus.com/sportrecovery.
The Company's Fruitflow+ Omega-3 dietary supplement business is
complementary to its Alliance Agreement with DSM and it is
supported by DSM, reflecting the continued strength of the long
term relationship between Provexis and DSM. The Company is seeking
to expand further its commercial activities with Fruitflow+ Omega-3
and other Fruitflow+ combination products, and it is currently in
dialogue with some potential direct brand owner customers.
Intellectual property
The Company is responsible for filing and maintaining patents
and trade marks for Fruitflow as part of the Alliance Agreement
with DSM, and patent coverage for Fruitflow now includes the
following patent families:
-- Improved Fruitflow / Fruit Extracts, which was granted by the
European Patent Office in January 2017. The patent has been granted
in seven other major territories to include China, and patent
applications are at a late stage of progression in a further seven
global territories, with potential patent protection out to
November 2029.
-- Antihypertensive (blood pressure lowering) effects in
collaboration with the University of Oslo, which have now been
granted for Fruitflow in Europe and three other major territories.
Patent applications are being progressed in a further five major
territories to include the US and China, with potential patent
protection out to April 2033.
-- The use of Fruitflow with nitrates in mitigating
exercise-induced inflammation and for promoting recovery from
intense exercise. The patent was first granted by the UK IPO
(Intellectual Property Office) in May 2017, and a further patent
was granted in Australia in December 2018. Patents are being sought
in Europe, the US, China and eleven other territories, with
potential patent protection out to December 2033.
-- The use of Fruitflow in protecting against the adverse effects of air pollution on the body's cardiovascular system, which extends potential patent protection for Fruitflow out to November 2037. Recent laboratory work has shown that Fruitflow can reduce the platelet activation caused by airborne particulate matter, such as that from diesel emissions, by approximately one third.
Capital structure and funding
On 27 September 2018 the Company announced it had raised
proceeds of GBP395,000 via the placing of 98,750,000 new ordinary
shares of 0.1p each at a gross 0.40p per share with investors, with
no commissions payable. The placing shares were admitted to trading
on AIM on 5 October 2018.
The Company is seeking to maximise the commercial returns that
can be achieved from its Fruitflow technology, and the Company's
cost base and its resources continue to be very tightly managed.
The Company remains keen to minimise dilution to shareholders and
it is focussed on moving into profitability as Fruitflow revenues
increase, but while the Company remains in a loss-making position
it will need to raise funds to support working capital on
occasions. The Company is expected to report cash at bank of
GBP326k at its 31 March 2019 year end, and based on its current
level of cash it will be seeking to raise further limited funds in
the coming months.
Dawson Buck, Chairman of Provexis, commented:
'In its preliminary results statement currently scheduled for
early September the Company expects to report on another strong
year of progress, to include revenues for the year ended 31 March
2019 of GBP322k, a 37% year on year increase.
The Company has developed a strong, long lasting and wide
ranging patent portfolio for Fruitflow, a wholly natural
cardiovascular health product which is backed by numerous published
human studies, and the Company is well placed to maximise the
numerous commercial opportunities which the Company and DSM have
been pursuing for Fruitflow, to include the Company's planned
collaboration with By-Health in the vast Chinese market.
The clinical studies which By-Health has been conducting in
China, seeking to obtain blue cap health claim status for Fruitflow
in China, have been progressing well and the completed studies have
shown excellent results in use for Fruitflow, providing strong
evidence for By-Health in its blue cap and other regulatory
submissions to the Chinese SAMR. If a successful blue cap health
claim is achieved for Fruitflow it would currently be expected to
result in some significant orders for the product, potentially at a
multiple of current total sales values. The Company will provide
shareholders with as much information as it can with regard to the
timing of this highly commercially sensitive and potentially
transformative process.
The Company would like to thank its customers and shareholders
for their continued support, and it remains positive about the
outlook for Fruitflow and the Provexis business for the coming year
and beyond.'
For further information please contact:
Provexis plc Tel: 07490 391888
Dawson Buck, Chairman enquiries@provexis.com
Ian Ford, CFO & COO
Allenby Capital Limited Tel: 020 3328 5656
Nick Naylor / Liz Kirchner
Notes for editors
About Provexis plc
AIM-listed Provexis is focused on the development, licensing and
sales of its proprietary, scientifically-proven Fruitflow(R)
heart-health functional food ingredient.
Provexis was founded in 1999 and is headquartered in Reading,
Berkshire.
Provexis shares are traded on the AIM market of the London Stock
Exchange under the ticker symbol PXS.
For further information, please visit www.provexis.com and
www.fruitflowplus.com.
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END
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