WideCells Group PLC, the healthcare services company focused on providing stem cell services and ground-breaking insurance for stem cell treatment, has announced its interim results for the 6 months ended 30 June 2017.
Highlights
· Established revenue generative operations, with three primary divisions and five revenue streams
· Award winning – named 21st in Global DISRUPT 100 list, showing potential to influence, change and create new global markets, and nomination as ‘Life Science IPO of the year’ by Biotech&Money
· Successfully executed the landmark launch of the world’s first global stem cell insurance product, CellPlan, generating maiden revenues
o Secured a commercial agreement with the UK’s leading cord blood storage facility, Biovault, to capitalise on their 25,000 cord blood samples;
o Built e-commerce platform to facilitate rapid global rollout
o Post-period end signed a definitive agreement with Hemocord, a leading Brazilian storage facility, providing exposure to a new and rapidly growing market
o Strong growth pipeline – actively assessing a number of agreements with additional cord blood storage facilities
· Commenced revenue generative research work and expanded product offering at WideCells
o Building a portfolio of global stem cell storage facilities to build upon current facility in Brazil and cryogenics facility in Manchester, UK
o Post-period end granted a Research Licence to proceed with the planned paid-for research work to drive development in stem cell therapies
o Post-period end identified strategic opportunity to target complementary growth opportunities within regenerative medicine by becoming a licenced provider of novel synthetic bone graft INDUS – maiden product sales targeted Q4 2017 selling to the UK dental industry in the coming months, with potential for further roll out internationally
· Advanced Wideacademy from vision to commercialisation, with revenue generation on track to commence in 2018
o Former Director of Education at Apple, Alan Greenberg, appointed to drive development
o Finalised “route to market” through creation of an innovative Software as a Service (‘Sas’) platform to deliver authentic, factual and trustworthy content on stem cell treatments and life sciences
o Commercial launch targeted for Q1 2018
· Cash position of £868,829 as at 30 June 2017 – post period end cash balances further bolstered through Placing to raise gross proceeds of £750,000
WideCells Group CEO Joao Andrade said, “I firmly believe WideCells Group is set to change our future medical landscape. By creating the world’s first end-to-end service solution, we are committed to making cord blood stem cell treatment accessible and affordable globally and I believe the repercussions of this are set to be huge.
“Having achieved consistent growth across our portfolio of three divisions during the period, we now have two revenue generative divisions – CellPlan and WideCells – with the third – Wideacademy – targeted to commence operations in early 2018. With a number of growth initiatives already well advanced to build on revenues and expand our global reach, the future continues to look very bright for our company. I would like to thank all of those who have made this rapid progress possible, and I look forward to updating our loyal shareholders in the future as we continue to expand and commercialise our products in this electric market.”
Chairman’s Statement
Having listed on the London Stock Exchange just over a year ago, I am delighted to report on the historic progress we have made, not only in the period under review, but since our listing. Within a year of becoming a quoted company we have rapidly grown WideCells Group to become a revenue generative worldwide provider of stem cell services, driving innovation across a US$100 billion industry that is rapidly growing and projected to be worth US$170 billion by 2020.
Our strategy is simple: to offer an end-to-end service solution for the stem cell industry, which drives innovation, improves accessibility and catalyses the next important phase in the medical industry, whilst offering multiple revenue opportunities to provide value uplift for our shareholders. This is achieved through our three distinct and complementary divisions: CellPlan, which represents the world’s first stem cell insurance plan and medical concierge service to directly tackle the affordability of stem cell transplantation for families across the globe; WideCells, which provides cutting-edge stem cell processing and storage facilities and pioneers innovative research work; and Wideacademy, which is committed to driving training, education and research in stem cell technologies to support the continued growth of this potentially lifesaving industry.
In the past six months, we have seen enormous advancements made in all three divisions. CellPlan and WideCells made the monumental transformation from product development to commercial deployment, thus bringing with it the advent of revenues, which we are now focussed on rapidly growing, whilst former Director of Education at Apple, Mr. Alan Greenberg, has become Senior Vice President of Wideacademy and devised a clear programme and strategy through which we are now ideally poised to grow our training and research arm. The excellent progress that we have made is reflected in our global ranking as 21st in the Global DISRUPT 100 list – a list which celebrates the businesses with the most potential to influence, change or create new global markets – and in our nomination as ‘Life Science IPO of the year’ by Biotech&Money. We are committed to maintaining this rapid pace of development as we now look to build our global presence.
I would now like to take this opportunity to provide a more thorough overview of the developments we have achieved across our divisions during the period under review.
CellPlan
CellPlan is a completely unique and a first of its kind insurance product that aims to transform the stem cell industry by making stem cell treatment affordable and accessible globally. Through an average cost of £170 per annum, families that have stored their stem cells are able to protect themselves from the often unforeseen costs of treatment, which can be as much as £300,000. CellPlan has developed four services, which are offered in one single product: “Your Expert Consultation Service”, which comprises a panel of experts in stem cell transplantation who are able to review a patient’s case regardless of where he is in the world and provide the right diagnosis and the right treatment plan; “Your Medical Certainty”, where we provide a comprehensive summary of the patient’s case and identify a selection of treatment centres where the patient can access treatment globally; “Your Global Resource”, which is a medical concierge service, whereby CellPlan handles the full treatment process, including any travel requirements, hospital admission and transportation of the stem cell sample, allowing patients to concentrate on getting well; and “Your Family protection”, where CellPlan provides cover of £/$/€1m (sterling, euros or dollars) – depending on the location – of medical, travel and accommodation bills. We believe that this highly innovative product is set to revolutionise the stem cell industry and indeed our future medical landscape – a view which a leading provider of market analysis shares, stating that the launch of CellPlan necessitates a revision in their forecasts for stem cell storage uptake because demand is now expected to be greatly heightened.
A further endorsement of our CellPlan product is the response we have received from stem cell storage providers, with multiple international facilities contacting us so that they can offer CellPlan to their customers. An example of the type of agreement we would look to secure with these facilities is the exclusive agreement that we have signed with Biovault Technical Ltd (‘Biovault’), the UK’s largest private human tissue storage facility, which stores c.25,000 cord blood samples; as of June 2017 all new Biovault customers automatically become a client of CellPlan for a period of 12months as part of a Biovault package to new storage customers in the UK, whilst existing customers are able to purchase the CellPlan product directly via the Company’s e-commerce platform, which was launched post-period end in July 2017. With the strength of our product, targeted marketing programmes and the support of Biovault, we expect uptake to be strong and renewal rates to be high, which will build recurring revenues for the group.
From every product sold, c.£50 is net to WideCells Group. Accordingly, this maiden agreement was a landmark for the Company because it marked the commercial launch of CellPlan and accordingly the commencement of revenue generation from this division. Furthermore, work is currently underway to roll-out our e-commerce platform further so that families that have stored stem cells in facilities currently not members of the CellPlan Excel Member Programme but which meet standards adhered to by the programme (the ‘Extended Provider Network’) will be able to purchase CellPlan. For sales generated from the Extended Provider Network, CellPlan will take a greater share of the margin given that no commission payment will be required to storage facilities.
Looking at our future sales opportunities, it is important to note that CellPlan’s target market includes people who have already committed to storing their baby’s umbilical cord blood for 25 years, and accordingly, we believe there is strong potential that these people will be interested in subscribing for and renewing the CellPlan policy for the same period of time, which will create a valuable recurring revenue and provide clear see-through value of our Company in the future. CellPlan is targeting c.100,000 policies by year three (from its commercial launch), which when generating on average £50 net to CellPlan per policy on a recurring basis, provides a strong structure through which we can build the profitability of our Company.
By establishing two defined routes to market, we have placed ourselves firmly in the driver’s seat in terms of sales. Our focus is now on signing up new customers, both via strategic agreements with storage facilities and via our Extended Provider Network, so that we can build revenues. In support of this, I am pleased to report that post-period end in early July 2017 we signed a definitive agreement to roll out CellPlan to Hemocord, a leading Brazilian storage facility that currently has approximately 5,000 cord blood samples stored. South America is one of the fastest growing cord blood markets across the globe, expected to be valued at US$445 million by 2023, and accordingly our move into this geography marks a significant opportunity.
With additional agreements in the pipeline and our e-commerce platform strategically built to facilitate rapid global rollout, the coming 6 months are, I believe, set to be equally transformational for the Company as we focus on building CellPlan into the world’s leading provider of cord blood and related stem cell insurance.
WideCells
Our WideCells division operates an international portfolio of stem cell storage and research facilities, providing us with exposure to markets initially across Europe and South America, with the ability to be extended to the Middle East and Africa.
The division was founded to penetrate a crucial area of the stem cell market: stem cell storage, a global market which was valued at US$2.4 billion in 2015. To enable us to capitalise on this market we have established a cryogenics facility in Manchester, at our Institute of Stem Cell Technology, and have a licencing agreement with a storage facility in Brazil, now operating as WideCells Brasil. With an expected average storage price of £2,000 in the UK and Europe, we believe this division has the potential to generate significant revenues for our Company; there are c.500,000 births each year in WideCells’ initial target markets of the UK, Portugal, Spain and Brazil and within this we believe there will be 50,000 (10%) umbilical cord blood samples stored per year. It is accordingly our mission to convert this opportunity into material value for the Company in the near term.
Whilst stem cell storage remains a primary focus of the division’s operations, I am also pleased to report that since our listing we have identified an additional opportunity to generate revenues by undertaking research at our Institute of Stem Cell Technology in Manchester. This research is focused on stem cell therapy and regenerative medicine, and post-period end in July 2017 WideCells was granted a Research Licence from the UK’s Human Tissue Authority, enabling it to proceed with the planned research work. Crucially, revenues are already being received from this area of the business, showing the success of this venture; Qigenix, a California-based clinical stage medical device company, has agreed to pay £100,000 in aggregate to WideCells to test a new laser technology designed to increase the homing and integration of stem cells.
Alongside undertaking research for Qigenix, we intend to conduct research to examine the potential of using stem cells alongside synthetic bone graft treatments to accelerate the new bone formation process. This is part of our recently announced strategy to target complementary growth opportunities identified within regenerative medicine. As part of this development, post-period end in July 2017 WideCells secured a licence agreement with Medbone® – Medical Devices Lda (‘Medbone’) which has developed and manufactures INDUS, a novel synthetic bone graft which promotes new bone formation. This means we are now a licenced provider of INDUS, which we intend to start selling to the UK dental industry in the coming months, with potential for further roll out internationally.
This move is perfectly aligned with our our stem cell activities, as we are looking to initiate a research project where we will be looking to combine our synthetic bone INDUS with the patient’s own stored dental pulp stem cells (TeethCells), which is a service we are expecting to launch early next year after we receive the licence we are seeking from the Human Tissue Authority for the provision of this service. We are also fortunate enough to count Dr. Marilyn Orcharton as a member of our Board and her experience within the dental industry – being a qualified dentist who has received a medal of Honour from the British Dental Association and co-founded Denplan Limited, the UK’s market leader in dental insurance – means that we are uniquely well placed to rollout this new product offering whilst maintaining the continued development of our stem cell services. I believe this is a very exciting growth opportunity for our Company; we believe that this move will enhance our position within the regenerative medicine arena whilst also generating new revenue opportunities for the Company.
Wideacademy
Wideacademy is our research, development and training division, through which we intend to educate people on the benefits of stem cell treatment. The division’s mandate is simple: to establish itself as the thought leader on stem cell technologies and innovation for medical professionals and families. This is because we believe knowledge is power, and whilst the stem cell industry is a multi-billion-dollar industry, there is a disconnect in terms of people’s understanding of stem cells and their potential. By securing and working with strategic partners in the tech and education sectors, we intend to produce and deliver the highest quality content and courseware to bridge this gap and enable people to educate themselves on stem cell technologies and ultimately make informed decisions on this growing area of medicine.
Spearheading this area of the business is Alan Greenberg, the former director of Education at Apple, who was intrinsic in launching educational podcasts at the company. He joined us in February 2017 and has already had great success in helping define our development plans and rollout model. As outlined through an announcement made post-period end on 25 September 2017, Wideacademy has designed an innovative Software as a Service (‘Sas’) platform (the ‘Platform’) to deliver authentic, factual and trustworthy content on stem cell treatments and life sciences. It is our intention that through this one bespoke platform, we will be able to satisfy any and all needs of both the professional and personal interest relating to stem cell technology. The Platform is currently being developed, with commercial launch targeted for Q1 2018, which we expect will herald the commencement of revenues for this division. We look forward to keeping shareholders updated with progress on these exciting developments in due course.
Financial
The £2m raised at IPO allowed the Group to set up a state-of-the-art stem cell facility at the University of Manchester Innovation Centre, establish offices for WideCells and Wideacademy, and to develop the CellPlan insurance product from offices in Porto.
On 12 April 2017, the Company announced the completion of a private placing of 10% of its existing share capital. 5,405,806 ordinary shares at £0.12 were issued for trading on the Main Market of the London Stock Exchange (the ‘Main Market’) on 28 April 2017. The placing raised £646,686, £601,111 after £47,585 of costs, and allowed the Company to focus on growing its three core divisions.
With the change to the EU Prospectus Regulation from 21 July 2017, Premium and Standard listed companies on the Main Market are now allowed to raise 20% of their share capital over a rolling 12-month period without a prospectus. At the same time as launching the CellPlan product and the Company moving into sales, it was decided to take advantage of this rule change and raise another 10% of the Company’s post-IPO share capital. Accordingly, post-period end on 28 August another 5,357,143 shares were issued for trading on the Main Market at a price of £0.14. This raised another £750,000 before costs.
Aside from cash placings, another £25,000 of our initial £100,000 paid-for contract research project was recognised in the period.
As at 30 June 2017 cash and cash equivalent balances stood at £868,829. This figure does not include the £750,000 (before costs) raised post-period end in August.
Outlook
WideCells’ mission is to deliver the world’s first end-to-end service solutions to make stem cell treatment accessible and affordable globally. Since the beginning of the year we have seen our Company grow exponentially and with revenues now commencing across much of our business, new product offerings launched, and initiatives in place to grow our service offering globally, I believe we are poised for further transformational growth.
Regenerative medicine is developing at a rapid pace and it is crucial that the industry not only keeps pace with these advancements but drives its continued development. With our expert team and an adaptable business model, we have been able to utilise our strategic position to take advantage of new opportunities as they are identified so that we can build a robust, profitable business. Our mission is now on building revenues and our global reach so that we can translate the significant potential we have identified into material value for our shareholders.
I would like to thank our shareholders, together with our incredibly hardworking board and management team, for their continued support. I very much look forward to the future opportunities ahead.
Dr Graham Hine
Chairman
