TIDMPXS
RNS Number : 6959E
Provexis PLC
10 May 2017
10 May 2017
Provexis plc
Trading update
Provexis plc ('Provexis' or the 'Company'), 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 2017.
In its preliminary results statement currently scheduled for
early September the Company expects to report on a strong year of
progress.
The Company's Alliance partner DSM Nutritional Products has
continued to develop the market actively for Fruitflow(R) in all
global markets. More than 50 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 expects to report revenues for the year ended 31
March 2017 of GBP228k, a 148% year on year increase (2016:
GBP92k).
Revenues accruing to the Company for the year from its profit
sharing Alliance for Fruitflow(R) were GBP153k, a 66% year on year
increase (2016: GBP92k).
The Company launched its Fruitflow(R) + Omega-3 dietary
supplement product in late June 2016 and in its nine months on sale
the product achieved sales of GBP29k for the financial year to 31
March 2017 through the new e-commerce website
www.fruitflowplus.com.
The balance of revenue recognised in the period reflects amounts
of GBP46k (2016: GBPNil) received for marketing support; the
related marketing expenditure is included as part of administrative
costs.
The Company expects to report an underlying operating loss for
the year of GBP382k (2016: loss of GBP385k), a record low for the
Group.
An increasing number of further commercial projects have been
initiated by DSM with prospective customers, including some
prospective customers which are part of global businesses, with
good prospects for these projects to be launched as consumer
products. The Company and DSM have seen an encouraging increase in
brand awareness and customer interest in Fruitflow(R) in recent
months, and the total projected annual sales value of the
prospective sales pipeline for Fruitflow(R) has continued to
increase, now standing at an all-time high level.
MOU for a research and development collaboration with By-Health
Co., Ltd for Fruitflow(R)
In April 2017 the Company announced that it had entered into a
memorandum of understanding with BY-HEALTH Co., Ltd, a substantial
listed Chinese dietary supplement business, which is intended to
result in a research and collaboration agreement with BY-HEALTH for
Fruitflow(R).
The Company also confirmed separately that Provexis and DSM were
working with BY-HEALTH to support the planned launch of some
Fruitflow(R) based products in the Chinese market, with the first
launch envisaged in the second half of 2017.
The proposed research and collaboration agreement between the
Company and BY-HEALTH is intended to focus on BY-HEALTH's research
programme into the development of new products that contribute to
cardiovascular health, particularly in the field of blood pressure
regulation, and it is intended to include a clinical trial which
will be conducted in China. It is envisaged that the Company,
BY-HEALTH and a third party Chinese research organisation will sign
the research and collaboration agreement later this year, with the
bulk of the research programme to be completed in 2018.
It is envisaged under the MOU that the Company and BY-HEALTH
will jointly provide primary funding for the research and
collaboration work which will include the assessment of a number of
different potential product formulations. Product formulations
which are covered under the Company's existing patents would
continue to be owned outright by the Company, and the Company would
retain proportional joint ownership of any new product formulations
developed as part of the project. It is envisaged that the Company
will provide scientific and technical support for Fruitflow(R) to
BY-HEALTH throughout the collaboration.
In November 2016 the Company announced that its Alliance partner
for Fruitflow(R), DSM, had entered into a strategic collaboration
agreement for Fruitflow(R) with BY-HEALTH focussing on the
development of new products that contribute to cardiovascular
health, and the MOU announced by the Company in April is in support
of this existing collaboration, whilst ensuring that the Company
retains and strengthens its intellectual property holdings.
There are more than 230m people in China who are currently
thought to have cardiovascular disease, and a significant increase
in cardiovascular events is expected in China over the course of
the next decade based on population aging and growth alone. China
is now the world's second-largest pharmaceuticals market, measured
by how much patients and the state spend on drugs. The Company
believes that Fruitflow(R) has the potential to play an important
role in the Chinese cardiovascular health market.
Fruitflow(R) + Omega-3 dietary supplement product
On 29 June 2016 the Company announced the launch of its new
Fruitflow(R) + Omega-3 dietary supplement product, which is
exclusively available through the Company's new e-commerce website
www.fruitflowplus.com, the product also has a Facebook page at
www.facebook.com/FruitflowPlus
Fruitflow(R) + Omega-3 is a two-in-one supplement in an easy to
take capsule, supporting healthy blood flow and normal heart
function, and it achieved sales of GBP29k in the nine month period
from its launch to the end of the Company's financial year on 31
March 2017.
In recent months, following some limited digital and other
marketing investment, the rate of sales for the product has more
than doubled relative to the initial launch period, with more than
half of recent sales coming from customers on monthly
subscriptions. Total monthly sales have increased every month for
the past seven months.
Further UK sales channel opportunities for the product are
currently being progressed, to include online listings with some
major UK retailers, and some international sales channel
opportunities are being explored. Fruitflow(R) + Omega-3 is
currently sold in Europe, only, and the Company is seeking to
launch the product online into wider international markets to
include North America, supported by some limited and carefully
targeted marketing and with continuing support from DSM.
In May 2014 US Food and Drug Administration issued some guidance
concerning the use of low dose Aspirin, stating that after
carefully examining scientific data from major studies it has
concluded 'the data do not support the use of aspirin as a
preventive medication by people who have not had a heart attack,
stroke or cardiovascular problems, a use that is called 'primary
prevention.' In such people, the benefit has not been established
but risks - such as dangerous bleeding into the brain or stomach -
are still present.' The Company believes that this guidance remains
a particularly strong opportunity for Fruitflow(R) in North
America.
Fruitflow(R) + nitrates dietary supplement product
In December 2013 British and international patent applications
were filed for the use of Fruitflow(R) in mitigating
exercise-induced inflammation and for promoting recovery from
intense exercise, seeking to enhance further the potential of the
technology in the sports nutrition sector. The patent was granted
by the UK IPO on 3 May 2017, and patents are being sought in
Europe, the US, China and ten other territories. The patent
application has now entered the national phase, with potential
patent protection out to December 2033.
The Company is keen to progress the formulation and launch of a
Fruitflow(R) + nitrates dietary supplement product which would be
supported by the Company's strong patent position in this area. The
product would have anti-inflammatory and circulation benefits for
athletes seeking to recover after exercise, properties which would
also be potentially beneficial to a wide range of other consumers
to include people suffering from the symptoms of basic ageing.
Fruitflow(R) and Fruitflow(R) + Omega-3 marketing
initiatives
The Company and DSM are committed to a number of ongoing
scientific and marketing initiatives for Fruitflow(R) and the
Company's Fruitflow(R) + Omega-3 capsules, seeking to extend the
reach of the existing science for Fruitflow(R) and give the
products further global exposure. Scientific and marketing
initiatives include:
Scientific studies
On 23 November 2016 the Company announced the publication of an
important study for Fruitflow(R) in the European Journal of
Clinical Nutrition.
The study, titled 'A randomised controlled trial comparing a
dietary antiplatelet, the water-soluble tomato extract
Fruitflow(R), with 75mg aspirin in healthy subjects' was undertaken
by Provexis with independent statistical analysis by BIOSS, and it
compared the effects of Fruitflow(R) and 75mg aspirin. Interactions
between Fruitflow(R) and aspirin when consumed together were also
studied. A total of 47 healthy subjects completed the trial over a
7-month period.
The study, which is available to view on the Company's website
at
www.provexis.org/wp-content/uploads/2016/12/EJCN-Aspirin-Fruitflow-study-23-Nov-16.pdf
demonstrates that Fruitflow(R) showed up to 30% reduction from
baseline platelet aggregation in each of three different biological
pathways, while a single dose of aspirin caused up to 60% reduction
in a single pathway, with lesser effects on the other two. The
study showed no negative interactions between Fruitflow(R) and
aspirin when consumed together.
The study findings are statistically significant and serve to
demonstrate the potential effectiveness of Fruitflow(R) as a
dietary supplement with a significant effect on blood flow,
suitable for daily use in primary prevention of CVD, and with no
adverse side effects.
The World Health Organization reports that more people die
annually from CVDs than from any other cause.
On 12 July 2016 the Company announced the publication of another
important study for Fruitflow(R) in the European Journal of
Nutrition.
The study, titled 'Fruitflow(R): the first European Food Safety
Authority-approved natural cardio-protective functional ingredient'
includes a scientific summary of the entire Fruitflow(R) project
from its inception and it is expected to be a significant
opportunity to promote Fruitflow(R) further across scientific,
trade customer and consumer channels. The study is available to
view on the Company's website at
www.provexis.org/wp-content/uploads/2017/03/Fruitflow-the-first-European-Food-Safety-Authority-approved-natural-cardio-protective-functional-ingredient-07-Jul-16.pdf
It is envisaged that further study publications for Fruitflow(R)
will be submitted to appropriate scientific journals in due
course.
Key Opinion Leaders' roundtable
The Company conducted a Key Opinion Leaders' roundtable event
for Fruitflow(R) in London on 29 September 2016, with considerable
support from DSM.
The roundtable was focussed on raising awareness of the
importance of blood flow in cardiovascular health, and the
effectiveness of dietary antiplatelets, and it was attended by key
scientists from Provexis and DSM, along with a number of interested
health care professionals with close links to the national media.
The event was recorded and a video for Fruitflow(R) + Omega-3
capsules targeting prospective consumers can be seen here
www.youtube.com/watch?v=P3HCSdyupEY&t=71s
The Company and DSM are keen to secure greater medical advocacy
for Fruitflow(R) and the roundtable event forms part of this
strategy, supported by a broader consumer PR campaign. The Company
is keen to conduct a follow up roundtable event in the coming
months.
Digital marketing strategy
A digital marketing strategy, strongly supported by DSM, has
also been implemented, seeking to drive and optimise online leads
and sales for the Company's Fruitflow(R) + Omega-3 capsules. The
capsules have been promoted across key social media and other
search platforms, to include DSM's key digital communities and
channels.
Other marketing initiatives
Other marketing initiatives for Fruitflow(R) have seen the
product being promoted at several major food ingredient and dietary
supplement trade shows. The product has been featured in numerous
publications and it has been the subject of several trade seminars
and presentations, some of which are available to view in the news
section of the Company's website www.provexis.com.
Some further limited digital and other marketing investment is
envisaged in the coming months, likely to include a carefully
costed and targeted radio campaign.
Fruitflow(R) and Blood Pressure - Collaboration with University
of Oslo
In November 2014 the Company signed a two stage collaboration
agreement with the University of Oslo seeking to undertake further
research into the relationship between Fruitflow(R) and blood
pressure regulation. Recent work undertaken by the University has
shown that Fruitflow(R) has a potential new bioactivity, leading to
blood pressure lowering effects which would be of relevance to a
large number of consumers and patients with a wide range of
cardiovascular conditions.
The first stage of the collaboration work, completed in 2015,
was focussed on developing the science and the key results from
this stage were very encouraging, with strong evidence from the
laboratory based work that a standard 150mg dose of Fruitflow(R) in
powder format has the potential to give a clinically relevant
reduction in systolic blood pressure.
The Company and the University completed the second stage of the
collaboration work in December 2016, which had seen the parties
conduct a small clinical trial in Oslo by way of a proof of
principle study. The study examined the acute effects of different
amounts of Fruitflow(R) in powder format on parameters relating to
blood pressure, such as systolic and diastolic blood pressure, mean
arterial pressure, pulse pressure and heart rate. These blood
pressure related parameters were monitored over a 24-hour period
using ambulatory blood pressure monitoring. Platelet function was
also measured. The trial subjects, who were healthy with no
underlying cardiovascular disease or other conditions likely to
affect blood pressure, received both placebo and Fruitflow(R)
supplements in a blinded crossover design.
Results from the pilot study indicated that a 150mg dose of
Fruitflow(R) in powder format significantly lowered the average
24-hour systolic blood pressure compared to placebo. When the
monitoring time was split into waking and sleeping periods, both
systolic and diastolic blood pressure were significantly lower
after 150mg Fruitflow(R) treatment than after placebo treatment
during the waking period; systolic pressure was also significantly
lower during the sleeping period.
Raised blood pressure is estimated to cause more than 7 million
premature deaths throughout the world each year, and 4.5% of the
disease burden. Treating raised blood pressure by way of achieving
systolic blood pressure < 140 and diastolic blood pressure <
80 has been associated with a 35-40% reduction in the risk of
stroke and at least a 16% reduction in the risk of heart attack
(WHO 2007). The pilot study results therefore show that
Fruitflow(R) may have clinically relevant effects in blood pressure
control.
The University of Oslo's research team was led by Professor Asim
Duttaroy, Group Leader of Chronic Disease at the Faculty of
Medicine, who was the original inventor of Fruitflow(R). Provexis'
work under the collaboration was led by Dr Niamh O'Kennedy, a
research chemist specialising in the field of natural products
chemistry who played a key role in the development of Fruitflow(R),
and the health claim for Fruitflow(R) which was adopted by the
European Food Safety Authority ('EFSA').
Intellectual property
The Company is responsible for filing and maintaining patents
and trade marks for Fruitflow(R) as part of the Alliance Agreement
with DSM. We are pursuing a strategy to strengthen the breadth and
duration of our patent coverage to maximise the commercial returns
that can be achieved from the technology. Trade marks were
originally registered in the larger global territories, and new
registrations are typically now sought in additional territories in
response to requests from current or prospective DSM customers for
Fruitflow(R).
In December 2013 British and international patent applications
were filed for the use of Fruitflow(R) in mitigating
exercise-induced inflammation and for promoting recovery from
intense exercise, and as indicated above the patent was granted by
the UK IPO on 3 May 2017. Patents are being sought in Europe, the
US, China and ten other territories, with the patent application
now having entered the national phase, with potential patent
protection out to December 2033.
The Company's patent application for Fruit Extracts, relating to
part of the production process for Fruitflow(R), was granted by the
European Patent Office on 11 January 2017, with the patent
application also now having entered the national phase across
larger global territories, with potential patent protection out to
November 2029.
Capital structure and funding
The Company is seeking to maximise the commercial returns that
can be achieved from its Fruitflow(R) 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(R)
revenues increase, but while the Company remains in a loss making
position it will need to raise working capital on occasions, hence
the Company's announcement on 2 May 2017 confirming that it was in
late stage discussions with a small group of investors in relation
to two subscriptions to raise further working capital for the
Company.
The Board is pleased with the outcome of the First Subscription
for GBP350,000 announced earlier today, and is also pleased to
report non-legally binding indications of interest in a Second
Subscription to raise approximately GBP375,000, of which
approximately GBP250,000 is likely to be subject to the Company
receiving positive EIS advance assurance clearance from HMRC. The
Company highly values its private investor base and it intends to
provide private investors with an opportunity to participate in the
Second Subscription at 0.50 pence per share through the
PrimaryBid.com platform.
The total First and Second Subscriptions are currently expected
to raise at least GBP475,000 in total, and if the Company receives
positive EIS advance assurance clearance from HMRC total
Subscriptions are currently expected to exceed GBP725,000.
The funds raised will be used to provide the Company with
additional working capital to support its revenue growth plans over
the coming years, to include the research and collaboration
agreement announced in April with BY-HEALTH for Fruitflow(R), and
they will considerably strengthen the Group's balance sheet.
Dawson Buck, Chairman of Provexis, commented:
'We are pleased to be able to report a 148% increase in revenue
for the year ended 31 March 2017, along with other significant
progress for the Company to include:
-- The encouraging increase in brand awareness and customer
interest in Fruitflow(R) which the Company and DSM have seen in
recent months, with the total projected annual sales value of the
prospective sales pipeline for Fruitflow now standing at an
all-time high level;
-- The strategic collaboration agreement for Fruitflow(R)
between DSM and Chinese listed BY-HEALTH, focussing on the
development of new products that contribute to cardiovascular
health in China, and the related announcement by the Company
confirming that it had entered into an MOU with BY-HEALTH for a
research and collaboration agreement with BY-HEALTH for
Fruitflow;
-- The planned launch by BY-HEALTH of some Fruitflow(R) based
products in the Chinese market, with the first launch envisaged in
the second half of 2017;
-- The launch and encouraging initial progress of the Company's
Fruitflow(R) + Omega-3 dietary supplement product, which is
expected to provide the Company with an additional long term income
and profit stream. Further UK sales channel opportunities for the
product are currently being progressed, to include online listings
with some major UK retailers, and some international sales channel
opportunities in North America and elsewhere are being
explored;
-- The planned formulation and launch of a Fruitflow(R) +
nitrates dietary supplement product which would be supported by the
Company's strong patent position in this area;
-- The second stage of the Company's blood pressure pilot study
for Fruitflow(R) which indicated that Fruitflow(R) significantly
lowered blood pressure in waking subjects;
-- The Fruitflow(R) comparison study with aspirin published in
the European Journal of Clinical Nutrition, providing strong
support for the use of Fruitflow(R) in the primary prevention of
cardiovascular disease, and the detailed scientific study for
Fruitflow(R) which was published in the European Journal of
Nutrition in July 2016;
-- The strong support which the company has received recently
from investors in relation to two subscriptions to raise further
working capital for the Company, to include a PrimaryBid.com
element; the First and Second Subscriptions are currently expected
to raise at least GBP475,000 in total, and may exceed GBP725,000 if
the Company receives positive EIS advance assurance clearance from
HMRC.
The Company expects that these strongly positive announcements
and initiatives will have a beneficial effect on the current and
future commercial prospects for Fruitflow(R). The Company is well
placed to maximise the commercial opportunities arising from these
developments for Fruitflow(R) and the Provexis business, and
remains positive about the outlook for the business for the coming
year and beyond.'
This announcement contains inside information.
ends-
For further information please contact:
Provexis plc Tel: 07490 391888
Dawson Buck, Chairman enquiries@provexis.com
Ian Ford, Finance Director
Cenkos Securities plc Tel: 020 7397 8900
Bobbie Hilliam
Notes for editors
About Provexis plc
AIM-listed Provexis is focused on the development and licensing
of its proprietary, scientifically-proven Fruitflow(R) heart-health
functional food ingredient.
In May 2009, the Company's Fruitflow(R) technology was the first
to be substantiated by the European Food Safety Authority ("EFSA")
under the new Article 13(5) for proprietary and emerging science.
In December 2009 the European Commission authorised the health
claim "Helps maintain normal platelet aggregation, which
contributes to healthy blood flow", which was the first wording to
be authorised under Article 13(5).
In June 2010 it was announced that the Company had entered into
a long-term Alliance Agreement with DSM Nutritional Products to
commercialise Fruitflow(R), and in June 2015 the Company confirmed
it had agreed significantly enhanced financial terms for its
Alliance Agreement with DSM for Fruitflow(R).
The Company's Alliance partner DSM Nutritional Products has
developed the market actively for the Company's novel, patented
Fruitflow(R) heart-health ingredient in all global markets, with
over 50 regional consumer healthcare brands now having been
launched by direct customers of DSM, and with a number of further
regional brands having been launched through DSM's distributor
channels.
An increasing number of further commercial projects have been
initiated by DSM with prospective customers, including some
prospective customers which are part of global businesses, with
good prospects for these projects to be launched as consumer
products. Interest in the technology exists in all major global
markets.
In June 2016 the Company launched a high quality dietary
supplement product containing Fruitflow(R) and Omega-3 which is
being sold initially from a separate, dedicated website
www.fruitflowplus.com on a mail order basis.
The Company conducted a Key Opinion Leaders' roundtable event
for Fruitflow(R) in London on 29 September 2016, focussed on
raising awareness of the importance of blood flow in cardiovascular
health, and the effectiveness of dietary antiplatelets. The
roundtable was attended by key scientists from Provexis and DSM,
along with a number of interested health care professionals with
close links to the media. The event was recorded and a video for
Fruitflow(R) + Omega-3 capsules targeting prospective consumers can
be seen here www.youtube.com/watch?v=P3HCSdyupEY&t=48s
The Company and DSM are keen to secure greater medical advocacy
for Fruitflow(R) and the roundtable event forms part of this
strategy.
The roundtable event is being supported by a broader consumer PR
campaign, and the Company's Fruitflow(R) + Omega-3 dietary
supplement product has featured in a number of recent articles in
the UK national press which can be seen here
www.fruitflowplus.com/fruitflow-in-the-media
The Company has been engaged in a two stage collaboration
agreement with the University of Oslo to undertake further research
into the relationship between Fruitflow(R) and blood pressure
regulation. In December 2016 the Company announced the results from
the second stage of the collaboration, a pilot study which
indicated that a standard dose of Fruitflow(R) in powder format
significantly lowered average 24-hour systolic blood pressure
compared to placebo. Both systolic and diastolic blood pressure
were shown to be significantly lower whilst trial subjects were
awake, a clinically relevant reduction in blood pressure which is
expected to be of interest to a large number of consumers and
patients with a wide range of cardiovascular conditions.
In April 2017 the Company announced that it had entered into a
memorandum of understanding with BY-HEALTH Co., Ltd ('BY-HEALTH')
which is intended to result in a research and collaboration
agreement with BY-HEALTH for Fruitflow(R). The Company also
confirmed separately that Provexis and DSM are working with
BY-HEALTH to support the planned launch of some Fruitflow(R) based
products in the Chinese market, with the first launch envisaged in
the second half of 2017.
BY-HEALTH is a substantial Chinese listed dietary supplement
business which is currently valued in excess of GBP1.7bn.
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
This information is provided by RNS
The company news service from the London Stock Exchange
END
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