Tissue Regenix Group PLC (LON:TRX) said it remained committed to hitting its target of breaking even by 2020 as its interim results revealed the company delivered strong financial and operational performances.
Chief executive Steve Couldwell also told investors the regenerative medicines specialist had identified a number of potential new commercial opportunities it was “actively pursuing”.
In the six months ended June 30, it inked distribution agreements with Arthrex and ARMS Medical of the US and Pennine Healthcare here in the UK.
Another milestone was British regulatory sign-off for the BioRinse portfolio, while the manufacturing of DermaPure, the company’s wound care product, has been successfully transferred to the CellRight facility in Texas ahead of schedule.
Financially, significant progress was made with revenues rising to £5.6mln in the first half from £1.3mln in the comparable period last year, boosted by sales of DermaPure, which almost doubled in value on a constant currency basis.
The contribution to the top line from the CellRight business, bought a year ago, was £3.2mln, which was up 46% on a like-for-like basis.
The company’s gross profit margin advanced 12.1 percentage points to 56%, while the underlying loss narrowed significantly from £5.1mln to £3.5mln.
Cash burn falls, plenty in the bank
At the same time, cash burn dropped by £300,000 to £4.3mln as Tissue Regenix said a research and development portfolio review had been undertaken and “operational efficiency initiatives implemented”.
The company had £12.2mln in the bank as at the end of June.
CEO Couldwell said he was pleased with the growing momentum across the business.
“As the demand for our products continues to increase we are proactively reviewing our capacity capabilities to ensure that we can scale the business to meet future production requirements,” he added.
“We have identified a number of potential new commercial opportunities which we are actively pursuing and anticipate our current momentum will continue. We remain committed to our objective of being break-even in 2020."
Shares rise 10%
The shares rose 10% to 9.62p following the update, valuing the business at almost £90mln.
“I am quite pleased,” said boss Couldwell of the interims. “But I am conscious this is one data point covering six months.
“The summer hasn’t been too unkind in terms of July and August, but we have some tough [comparable] numbers in the fourth quarter.”
Tissue Regenix’s products span wound care, orthopaedics and cardiac applications and are based on two proven regenerative medicine technologies.
The first, dCELL, removes cellular and DNA material from biological tissues, leaving intact a scaffold upon which the patient's cells can regenerate and re-populate.
BioRinse does a similar job killing micro-organisms, bacteria and spores as well as removing debris, blood, bone marrow and lipids. It is key to the process used to create CellRight-developed regenerative scaffolds used by surgeons.
Geographic expansion on the cards
Going forward, the company will focus on additional strategic partnerships alongside geographic expansion.
It is also targeting two firsts in the second-half: UK sales of BioRinse via its distribution deal with Pennine and US sales of SurgiPure XD, a soft tissue ‘patch’.
The company is also looking to expand its production capability at its facility in San Antonio, Texas, as well as rolling out initiatives designed to enhance employee engagement.
On the CellRight acquisition, CEO Couldwell said: “The integration in terms of nuts and bolts of finances and IT; it’s 95% done.”