(The following article is an example of executive interviews by Alliance News journalists. Our IN DEPTH reporting is available only on Alliance News professional services.)
10 Jul 2019
(Alliance News) – Yourgene Health PLC’s chief has set his sights on a US expansion following settlement of a key litigation and swing to annual profit.
Shares in Yourgene were down 5.3% at 12.42 pence in afternoon trade.
Formerly known as Premaitha Health PLC, Yourgene had a long-running patent dispute with Illumina and ultimately agreed to a settlement, taking a licence under Illumina’s patent pool for non-invasive prenatal testing to develop a prenatal test using Illumina’s sequencing technology.
In late 2018, molecular diagnostics firm Yourgene agreed to a settlement of no more than GBP1 million to end the litigation and will pay royalties to Illumina for every sample tested using Illumina’s technology.
In order to fund its litigation, Yourgene had entered into loans with Life Technologies, a unit of US company Thermo Fisher Scientific Inc. However, in February 2019, Life Technologies exercised its warrants for Yourgene shares and cancelled the GBP9.4 million of debt owed by Yourgene, including all remaining borrowings and interest.
“We’ve spent the last 12 months, aggressively tidying up the legacy issues of the business, the litigation and the debt that was used to fund the litigation,” said Chief Executive Lyn Rees on Wednesday in an interview with Alliance News. Rees joined Yourgene in July last year.
Rees said the litigation had prevented the company from operating in the US, China, and Japan.
“The US is the largest global healthcare market and China the fastest growing and they were two markets that from a litigation perspective we were frozen out of,” Rees said.
Rees said he has spent “probably the last nine months looking in the US market” and will be returning at the end of the month to try and convert opportunities from its pipeline. Yourgene will be interviewing for commercial people in the US as operations in the country are “a long way to manage from Manchester”.
“I’m happy to line up the opportunities,” Rees said, “but I think we need to see having someone local to make sure that the customers are front and centre of everything we do there.”
China is likely to be a different beast, since it requires either “a very strong partnership model or a wholly owned financial entity” so Yourgene is looking to see which of its products to commercialise in China and what partners it might consider.
However, given that Yourgene’s products are already “ready to be sold in the US from a regulatory perspective”, Rees expects “it will be US first, China second”.
Rees was also excited about Japan, where it was also kept out by the Illumina litigation.
“Since that litigation has been removed, we’re making some significant progress and with very excellent Japanese partners we’ve started to see some revenue from that region,” Rees commented.
As a result of the debt write-off, Yourgene posted a GBP3.4 million pretax profit for its year ended March 31, a long way from its GBP9.5 million loss the year before. This was largely due to the debt write-off.
Revenue totalled GBP8.9 million, a 46% rise from GBP6.1 million the year before, the majority of which was from outside the UK and Europe. Rest of the World revenue increased 51% to GBP5.9 million from GBP3.9 million.
General administrative expenses held steady at GBP9.0 million but total administrative expenses shrank to GBP9.4 million from GBP11.9 million as the company posted a GBP37,864 release of a provision versus GBP2.7 million of litigation expenses the year before.
The CEO was very positive, saying it had been “the strongest set of financial results” so far for the business. “We are now very, very well positioned for growth”, Rees said.
“When I look at my growth strategy, it’s really pretty much straight forward. It is to sell more products to existing customers to find new customers in new territories,” he added.
By Anna Farley; firstname.lastname@example.org
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