Concepta : 30-09-2019Interim Results

RNS Number : 0441O

Concepta PLC

30 September 2019

30 September 2019

Concepta PLC ("Concepta" or the "Company")

Interim Results

This announcement contains inside informa on which is disclosed in accordance with the Market Abuse Regula on which came into effect on 3 July 2016.

Concepta PLC (AIM: CPT), the innovative UK personalised healthcare company and developer of the proprietary self-test platform ("myLotus®") the most accurate home-use fertility tracking and pregnancy testing system available on the U.K. market announces today its interim results for the six months to 30 June 2019.

Operational Highlights

• Initial sales and scale-up of proprietary self-test platform myLotus® following UK introduction in November 2018
• Announcement in March 2019 of Boots UK supply agreement (part of Walgreens Boots Alliance)
• Announcement of first U.K. pregnancies and continued user growth
• Announcement today of first fertility clinic collaboration with Manchester Fertility Clinic

Financial Position

• Completion of share placing of £2.2m (net of expenses) at 3p per share in April 2019
• Cash balance at the period end was £1,527,802 (H1 2018 £248,172)
• Loss for the period narrowed to £1,260,787 (H1 2018 £1,490,349)

Chairman Statement

The first half of 2019 saw significant business development ac vity, a focus on the establishment of our commercial opera ons and delivery of our first pregnancies following the recent myLotus® product introduc on in November 2018. This interim report provides an update on the progress post our market introduc on to accelerate the adop on of myLotus®, the con nued strengthening of our business and increasing brand recogni on to promote myLotus® as a globally leading self-test fertility product.

Following the introduc on of myLotus® sales over the first half of this year were low with brand awareness beginning to gain trac on. Based on the news of our increasing pregnancies and first births due in October, compelling user tes monials and today's announcement of the Manchester Fer lity collabora on, we expect to see sales momentum grow over the second half.

Following the U.K. product introduction of myLotus® at the end of 2018, we announced our first commercial agreement in March 2019 with Boots UK Limited (part of Walgreens Boots Alliance), followed by our first myLotus® pregnancies in May 2019. More recently we have announced increasing numbers of pregnancies. We now have 28 pregnancies arising from our early sales and U.K. adopters, excep onal user tes monials and we an cipate the milestone of our first 'U.K. births' over the coming weeks. We are also announcing today in a separate announcement our first fer lity clinic collabora on with Manchester Fer lity clinic. We expect the news of our first births to considerably raise our product and Company profile.

As a newly introduced medical diagnos c technology, we have taken a considered approach to marke ng spend preferring to carefully evaluate myLotus® in the U.K. market, deliver increasing user pregnancy sta s cs and build credibility around our product advantage (highly accurate 'lab equivalent' self-test device and accompanying App to help women naturally conceive). As user numbers have grown our brand recogni on and product advantage of iden fying the op mal me for a woman to naturally conceive has increased. User tes monials and pregnancy case studies underpin this message which combined with increasing social media coverage and woman-to-woman recommenda on we expect to see U.K. demand for myLotus® to increase.

Most early users of myLotus® have previously been serial users of tradi onal fer lity/ovula on test kits, some tes ng over several years but struggling to conceive. Their myLotus® fer lity experience is a stark contrast to tradi onal fer lity/ovula on kits which have changed li le over the past 20 years. myLotus® is a technically advanced product providing highly accurate measurement and visibility of a womans fer lity and hormone profile and the high numbers of pregnancies being announced today are tes mony to this. As news of the success of myLotus® grows and women become aware of our technical advantage and the growing numbers of pregnancies and an cipated births we expect to generate greater brand profile and awareness to sustainably grow our business. We also plan to implement targeted channel marke ng plans in order to achieve this. Aligned with the fact that '93-95%of women under the age of 35 years will naturally fall pregnant over 4 years of trying to conceive where they have regular unprotected sex', we are beginning to see myLotus® accelerate this process by accurately predic ng users most fer le days and op mal me to conceive. myLotus® helps empower women to plan and prepare for their concep on providing a lower price op on for woman struggling to naturally conceive prior to considering more expensive assisted reproduction/IVF.

UK sales and marke ng channels have been developed to include business-to-business (B2B) and business-to-consumer (B2C) sales where we have adopted a digital online presence with customers engaged via social media, email and search engine marke ng. This enables customers to acquire myLotus® via our eCommerce pla orm www.myLotus.com, Boots U.K. online or Amazon. Increasing fertility clinic focus on natural and modified natural fertility cycles is also anticipated to drive further demand. myLotus® lends itself to support user preparedness for Intrauterine Insemina on (IUI) and Frozen Embryo Transfer (FET) cycles with the current U.K. shortages of hormone replacement therapy (HRT) focusing interest and clinical demand for more efficient ways of delivering assisted reproduction and natural cycles.

Compe ve pricing of myLotus® is under con nuous review given our recent market entry and advanced func onality versus tradi onal (lower accuracy/qualita ve) compe tor products. Over the past month we have reduced our retail selling price to help accelerate demand. We expect to see further price adjustment commensurate with increased market share, recognition of our functional advantage and improving pregnancy statistics.

Following the successful implementation of our Doncaster manufacturing and supply chain facility we will extend our E.U. reach as we begin to roll-out myLotus® in selected markets including Ireland, Germany, France, Italy and Spain over the coming months. We will adopt a similar sales model to that in the U.K. using our eCommerce platform and Amazon E.U. coverage with supply chain (distribution) support to satisfy demand across the new E.U. markets.

We have con nued to invest in myLotus® product development in order to develop the most accurate home-based fer lity and pregnancy test pla orm and the only pla orm that can build a profile 'hormonal signature' of a women's menstrual cycle. Development is ongoing for addi onal tests for progesterone (PdG) and Follicle S mula ng Hormone (FSH) which we are preparing for introduc on to the U.K. market early next year. These new tests will extend our menstrual cycle fer lity offering and widen our product applica on. These new test developments represent a significant new market opportunity as myLotus® provides women with new insights to their daily and monthly 'hormone health' to help improve their condi on and wellbeing. It will also make myLotus® applicable across the major phases of a woman's life from early stage menstruation, through family planning into menopause.

As user numbers grow, the interpreta on of an individual's readings will become more meaningful as a insight for diagnosis. Our data mining tools also have the ability to personally track the success of myLotus® in delivering pregnancies and births thereby improving outcomes. Longer term, user data, collected by our pla orm, will enable Concepta to develop AI (algorithms) for the early detection and diagnosis of hormone health conditions.

Financial review

• The Group's total comprehensive loss for the six months to 30 June 2019 narrowed to £1,260,787 (H1 2018 £1,490,350)
• The Company completed a £2.2m (net of expenses) placing at 3p per share to bolster the Company's cash position.
• The basic and diluted loss per share was 0.60 pence (six months to 30 June 2018 loss 1.1 pence).
• Cash balance as at 30 June 2019 was £1,527,802 (30 June 2018 £248,172).

During the repor ng period we con nued to maintain a ght cost control across all areas of spending whilst ensuring the essen al requirements of transi oning the company from product introduc on to its commercial phase of opera on were not compromised.

Outlook

The Company's short-term outlook remains firmly focused on continued adoption of the technology, revenue growth and

a determina on to deliver improved investor returns. We an cipate the following deliverables over the next repor ng period;

• Accelerated U.K. sales growth and the commencement of E.U. sales
• Extension of myLotus® to new E.U. markets including Ireland, Germany, France, Italy and Spain
• Broadened use of myLotus® across U.K. Fertility clinics for use in IUI procedures
• Development of OTC pharmacy discussions and myLotus® fertility journey
• Raised product profile and PR based on fertility demand for myLotus®

The myLotus® monitor, tests and App represent the most powerful and accurate home-based fer lity aid available in the market today helping women iden fy their fer le days with absolute accuracy and results comparable to lab-based tests. myLotus® sets out a new technically advanced product versus the less accurate and tradi onal fer lity methods currently available. myLotus® combined with the op on of fer lity support by qualified medical professionals represents a step change in enabling women who are trying to conceive to take control of their own fertility journey.

I would like to thank our investors for their con nued support. We appreciate there have been significant changes to the company and strategy following my appointment as Chairman in July last year and move to Execu ve Chairman in September 2018 and we are confident that we have the opportunity and exper se to deliver a globally leading product to a rapidly growing home-testing diagnostic space. We remain firmly committed to delivering this for our investors.

Matthew Walls

Executive Chairman

Concepta PLC

**ENDS**

Enquiries:

The Company

Matthew Walls, Chairman

Tel: [phone]

SPARK Advisory Partners Limited (Nomad)

Neil Baldwin / Mark Brady

Tel: [phone]

Novum Securities (Broker) Colin Rowbury

[phone]

About Concepta PLC:

Concepta PLC is an AIM-quoted pioneering UK healthcare company that has developed a proprietary product, myLotus®, targeted at the personalized mobile health market with a primary focus on hormone tes ng and increasing a woman's chances of naturally getting pregnant and to provide insight to unexplained infertility.

myLotus® is currently the only consumer product which allows both quan ta ve and qualita ve home (self-test) test measurement of a woman's personal luteinizing hormone (LH) during ovulation and human chorionic gonadotropin (hCG) hormone level during pregnancy, facilita ng higher concep on rates and early diagnosis of fer lity issues. The proposition of myLotus® is to empower women to be er understand their hormone levels and menstrual cycle and help women conceive naturally by identifying their window of fertility and optimal time for conception.

The Company has received CE-mark cer fica on for myLotus® and has launched its first product in the UK. The Company is preparing plans to roll-out across the core EU countries in 2019.

myLotus® is expected to be beneficial to users who have been unable to conceive after 6 months of trying. This highly motivated target group of women won't typically be offered medical intervention until after 12 months of unsuccessfully trying to conceive, with IVF not usually offered until after two years of trying to conceive. Research indicates couples start to take positive action ahead of this time typically with little medical support to help them do so.

Consolidated statement of comprehensive income

For the 6 months ended 30 June 2019

	Unaudited	Unaudited	Audited
	6 months to	6 months to	12 months to
			31 December
	30 June 2019	30 June 2018	2018
Notes	£	£	£

Revenue

315,717-4,838

Cost of sales

4(240,080)(307,623) (540,721)

Gross loss

(224,363)(307,623) (535,883)

Other administrative expenses

	(968,125)	(1,175,736)	(2,213,695)
Share-based payments	(126,301)	(19,428)	(92,291)
Administrative expenses	(1,094,426)	(1,195,164)	(2,305,986)
Operating loss	(1,318,789)	(1,502,787)	(2,841,869)
Finance expenses	(11,476)	(11,210)	(23,915)
Loss before income tax	(1,330,265)	(1,513,997)	(2,865,784)
Tax credit
6	69,478	23,648	52,277
Loss for the period	(1,260,787)	(1,490,349)	(2,813,507)
Attributable to owners of the
parent:	(1,260,787)	(1,490,349)	(2,813,507)

Loss per ordinary share - basic and diluted (pence)

5

(0.6)

(1.1)

(0.02)

Consolidated statement of financial position

As at 30 June 2019

	Unaudited	Unaudited	Audited
	30 June 2019	30 June 2018	31 December 2018
Notes	£	£	£
Non-current assets
Property, plant and equipment	725,239	801,761	789,189
Intangible assets
7	646,025	423,848	509,195
Total non-current assets	1,371,264	1,225,609	1,298,384
Current assets
Inventories	508,584	356,529	399,182
Trade and other receivables	174,227	269,073	164,933
Corporation tax receivable	121,755	128,466	52,277
Cash and cash equivalents	1,527,802	248,172	740,227
Total current assets	2,332,368	1,002,240	1,356,619
Total assets	3,703,632	2,227,849	2,655,003
Current liabilities
Trade and other payables	263,992	437,048	259,681
Loans and borrowings	66,735	69,818	64,228
Total current liabilities	330,727	506,866	323,909
Non-Current liabilities
Loans and borrowings	193,237	251,969	227,243
Total current liabilities	193,237	251,969	227,243
Total liabilities	523,964	758,835	551,152
Net assets	3,179,668	1,469,014	2,103,851

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