Biotech firm Premaitha counts the cost of lengthy litigation
Manchester-based biotech company Premaitha Health released full year results, a half year trading update, and news of a £2.5m share placing late today (September 28).
Earlier this month the firm, which offers non-invasive pre-natal testing (NIPT), announced it had settled a costly three year legal battle with US rival Illumina over the patent of Premaitha’s IONA prenatal test for Downs syndrome and other genetic disorders.
Today, AIM-listed Premaitha revealed that, while revenues in the year to March 31, had soared 100% to £6.15m, pre-tax losses had increased from £7.85m to £9.54m.
The results, posted to the Stock Exchange at 5.40pm, showed that operating losses, before litigation expenses, had been reduced by 18% to £5.91m, compared with £7.22m in 2017.
But operating losses after litigation expenses showed an increase to £8.60m, up from £7.6m.
Cash reserves at the end of the financial year stood at £280,000, compared with £1.3m a year ago.
The company’s borrowings amount to £12.1m
A £2m loan funding was secured in February this year, and in May a further £3m of equity was raised.
Today’s announcement revealed another £2.5m is to be raised through a share placing and subscription with institutional investors. No shares are being made available to the public.
The company said the net proceeds of this fund raising will be used to finance the settlement with Illumina, and general working capital requirements.
The Manchester office of Addleshaw Goddard is advising Premaitha on its three share placings to raise £2.5m.
The AG team is being led by partner Roger Hart and associate Lucie Alker.
Detailing trading conditions up to September 30, the company today said that revenues are expected to be up by around 40% to £3.8m.
Test volumes for the first half are expected to be in excess of 34,000, compared with 22,000 a year ago, demonstrating “significant momentum”.
Premaitha said it also continues to expand its geographic footprint, securing agreements in Kenya and India in the first six months
And it reiterated that the settlement agreements signed with Illumina removes the litigation overhang from the business and opens up a significantly larger addressable market for a multi-partner business model.
Non-executive chairman, Adam Reynolds, said: “I am delighted with the strategic and commercial progress that we have achieved in the period.
“Previously, the litigation has detracted from this progress, but the partnership agreement secured post period-end with Illumina, means that we are now free to operate globally in the NIPT market, and can fully focus on growing the business.
“We now have the optimal team in place and are extremely well-positioned to execute on our growth strategy in order to capitalise on the opportunity that exists for Premaitha, both in the rapidly expanding market for NIPT, and beyond.”
