WideCells Group PLC (LON:WDC), the healthcare services company focused on providing stem cell services and ground breaking insurance for stem cell treatment, announced today its unaudited preliminary results for the period ended 31 December 2016.
Highlights
· Successful IPO on the Main Market of the London Stock Exchange following £2 million raise to build an integrated stem cell support services company
– Three distinct divisions WideCells, CellPlan and WideAcademy, focused on making stem cell treatment more accessible and affordable as well as improving research and development (‘R&D’) to further advancements in stem cell technology
· WideCells launched WideCells Brasil, its umbilical cord blood processing and storage facility in São Paulo, Brazil
– The launch follows a 2016 licencing agreement between the Company’s wholly owned stem cell storage division, WideCells, and Biocells Brasil, the owner of the Facility, which has been in operation since 2012 and has an established client base of circa 400 clients.
– Established regional management team with proven operating experience both within the stem cell industry and regionally – includes Luiz Sardinha, the former COO of Coca-Cola Brasil (10,000+ employees and BRL4.9 billion) for 35 years, who has joined WideCells Brasil’s Board as COO and has taken a 10% stake, which is testament to the strong market potential of the stem cell services industry
· Launch and rollout of innovative insurance product CellPlan, the world’s first insurance plan and medical concierge service for the cord blood stem cell industry
– Provides affordable access to cutting edge stem cell treatments, which can currently be used to treat up to 82 blood disorders
– First definitive agreement with Biovault Technical Ltd (‘Biovault’), the UK’s leading cord blood storage facility, providing access to its extensive customer base and a long-term revenue stream
– Letters of Intent (‘LOI’) signed with two further cord blood banks to support continued rollout within Europe and South America.
· New revenue stream identified following establishment of WideCells Institute of Stem Cell Technology (ISCT) at the University of Manchester Innovation Centre (‘UMIC’)
– The Group’s first UK-based stem cell processing and storage facility
– Agreement signed with innovative North American medical device company, Qigenix, to undertake contract stem cell research worth £100,000. The first payment of £25,000, which is binding under the LOI, was paid to WideCells at the end of December 2016, representing the first revenue from this source. Subsequent payments will be at the commencement of laboratory research (£25,000) and the final payment at the delivery of the final research report to the client (£50,000).
· Development of ten online short courses on stem cell technology in partnership with the University of Westminster
· World-class leadership team secured, and a number of key managerial appointments made, to drive forward a strategy to deliver ground breaking services to the stem cell industry
– The team is further strengthened by the appointment as a non-executive director of Dr Marilyn Orcharton, a qualified dentist and co-founder of Denplan, the UK’s dental payment plan specialist.
– Alan Greenberg, former Head of Apple Education for Europe and Asia, appointed to the Board as non-Executive Director and as Vice-President of WideAcademy.
WideCells Group PLC CEO Joao Andrade said, “Our activities during the period have ideally positioned us to start generating revenues in 2017 from all three WideCells divisions, which work together to create the world’s first end to end service solution focused on making cord blood stem cell treatment accessible and affordable globally. Having listed in London in July 2016 we have made significant progress in the commercialisation of our stem cell services; the roll out of our revolutionary stem cell insurance product CellPlan has now commenced in collaboration with the UK’s largest stem cell storage facility, Biovault; discussions with multiple other facilities are advancing rapidly; delivery of our first stem cell processing and storage facility in Manchester is on track for Q2 2017; and we have appointed the former Head of Apple Education, Alan Greenberg, as a non-Executive Director and VP of WideAcademy to devise a strategy that makes it the thought leader in the stem cell industry. The pace with which we have achieved these milestone developments underpins our active growth strategy, and alongside this we have demonstrated our ability to execute our strategy in a reliable way, and to attract world-class personnel to our company, which we see as an endorsement of our revolutionary proposition.
“I believe that our business is well placed for a value re-rate in 2017 as we bring our various work-streams over the line. We have a ready and growing market for our products and services, a first mover advantage in delivering our product and building our brand, and partnerships with best-in-class companies which ensures that our commitment to quality is achievable at all time. With this in mind, I am excited for the months ahead and look forward to providing regular updates to shareholders in the near term.”
Chairman’s Statement
WideCells Group was formed in 2012 with the aim to revolutionise the stem cell industry. The stem cell market is projected to be worth US$170 billion by 2020 and as medical researchers continue to find new and ever more innovative applications for stem cells, this is a field which is likely to lead the way in disease therapy in the future. However, the hidden costs associated with stem cell treatment can often come as a surprise to the increasing number of families that are choosing to store their babies’ cord blood stem cells. Therefore the Group’s vision is to make potentially life-saving cord blood stem cell treatment affordable and accessible to families around the world and in July 2016 we embarked on making this vision a reality by listing on the Main Market of the London Stock Exchange.
The eight months following our listing can be characterised as a period of significant progress and I am delighted that we have been able to report first revenues via an agreement to undertake contract research work at our Institute of Stem Cell Technology laboratory (‘ISCT’) at the University of Manchester Innovation Centre (‘UMIC’). This is only set to increase when the first phase of our CellPlan rolls out with Biovault going live before the end of May 2017. Therefore, the coming months will see us build on the revenue generative foundation we have already created to establish a globally recognised brand in the evolving and growing stem cell industry.
Our three distinct and complementary divisions provide us with several entry points into the market and add to our unique proposition: through our WideCells division, we provide the cutting-edge in stem cell processing and storage facilities across Europe and the Americas with plans for extending into new markets; CellPlan represents the world’s first stem cell insurance plan and medical concierge service which directly tackles affordability of stem cell transplantation for families across the globe; whilst, WideAcademy was established to drive research, innovation and teaching in the rapidly evolving stem cells market. This approach ultimately acts as a marketing tool, underpinning our business proposition.
CellPlan
CellPlan is completely unique and a first-of-its-kind insurance product. It removes barriers to affordability for not only cord blood stem cell transplantation but also the associated medical consultation and care. This enables families to focus on recovery rather than potentially staggering medical bills. Following its official launch to cord blood banks at the World Cord Blood Congress Europe in May 2016, we have made significant strides towards the successful rollout of CellPlan and we have received an overwhelmingly positive response from the market. We believe that the implications of delivering this sophisticated product to the market could be radical. Supporting this, a leading provider of market analysis reported that the launch would necessitate a revision in their forecasts for stem cell storage uptake, which acts as a strong endorsement of our business.
Due to our unique high potential proposition, we have attracted global partners including a world leader in expert medical opinion, and a leading underwriter. In collaboration with them we finalised the terms and conditions (‘T&Cs’) for CellPlan in October 2016, which enables us to focus on driving our customer base and brand positioning while our partners take on the risks associated with underwriting an insurance product. The finalisation of the T&Cs in October 2016 was an important milestone for the Group as it signalled the completion of our product development phase and marked the commencement of our rollout.
We have also received very positive feedback from stem cell storage facilities, which have made clear their demand for a product such as ours. The period under review saw us enter into an agreement with the UK’s largest private stem cell storage facility, Biovault. With Biovault’s reputation for excellence, this partnership with an eminent stem cell facility has given the Group an ideal platform for entry into the European and global market. The five-year agreement, which provides the Group with access to Biovault’s customer base of 25,000 clients, marked the official entrance of CellPlan into the global insurance market. We are now preparing for the commencement of first sales of CellPlan to Biovault customers by Q2 2017 and anticipate we will be in a position to report first revenues from this division in the near-term. We were delighted to announce the extension of this rollout with the signing of two further Letters of Intent (‘LOIs’) with cord blood banks in Brazil. This has given us unrivalled access to the largest market in South America’s booming stem cell industry, projected to be worth US$445 million by 2023.
We aim to build CellPlan into the world’s leading provider of cord blood and related stem cell insurance, by capitalising on our first mover advantage. Our investors should be attracted to the recurring revenue stream and, given the nature of the insurance plan, customers are very likely to remain with us for many years. We are in discussions with a range of other significant providers of stem cell storage services, and look forward to providing updates on this, and our other developments, in the coming months.
Alongside the commercial rollout of CellPlan, we continue to focus on our service offering in order to ensure we maintain a competitive business model, which satisfies market demand. Accordingly, and in line with our innovative business model, we created ‘Your Expert Consultation’; A specialist medical consultation service, which provides clients with access to the best medical minds to provide a second opinion on their diagnosis. As a stand-alone product with a low entry price point, we believe the launch of this consultation service will create an additional revenue stream for the Company and create further opportunities for growth.
Additionally, while CellPlan continues to be a flagship division, central to the success of our strategy, we have simultaneously made significant progress across all three of our core divisions.
WideCells
Through our WideCells division, we have penetrated another crucial area of the stem cell market: stem cell storage, a global market which was valued at US$2.4 billion in 2015. Our WideCells division provides us with access to this burgeoning market and is a complementary addition to our wider portfolio, providing us with fertile ground from which to expand the rollout of CellPlan in future.
The funds raised on listing were primarily required for the development of WideCells’ Institute of Stem Cell Technology (‘ISCT’) at the University of Manchester Innovation Centre. We are pleased to see that this continues to advance on schedule and is targeted for completion in Q2 2017 following the granting of a Human Tissue Authority Licence for Human Application and Research. Once operational this state-of-the-art facility will provide us with a further revenue stream and will have the capacity to offer stem cell retrieval, processing and storage services to the European market. Seeking to further cement our global presence, in September 2016, we launched WideCells Brasil following a licensing agreement with Biocells Brasil. With an established client base the launch of this facility provides us with access to a compelling market, as well as the potential to generate further revenues through the provision of additional storage and healthcare services.
Stem cell research is developing at a rapid pace and it is crucial that the industry keeps pace with these advancements. With our expert team and an adaptable business model, the Group has been able to utilise its strategic position to take advantage of new opportunities as they are identified. Ahead of its completion, the ISCT has already proved a significant advantage to our portfolio, enabling us to establish a new revenue stream through a contract research agreement with Qigenix. The agreement, announced 30 November 2016, provides the Group with an additional £100,000 in revenues for use of our state of the art laboratory. The first payment of £25,000, which is binding under the LOI, was paid to WideCells by the end of December 2016, representing our first revenues.
WideAcademy
We are clear in our belief that as uptake in cord blood and other types of stem cell storage increases, further funding will be poured into research and development, in turn leading to further advancements in stem cell technology and treatments. WideAcademy is our research, development and training division through which we will work to strengthen knowledge of the benefits of stem cell treatment to the wider medical community. We were therefore delighted to appoint Alan Greenberg as non-Executive Director and VP of WideAcademy. With his wealth of experience in healthcare and education technology (‘EdTech’), most notably as Head of Apple Education for Europe and Asia, Alan has a vision to make WideAcademy a thought leader in the stem cell technology space, which will enable us to reach wider audiences and influence the next generation of stem cell therapies. We will leverage his fantastic experience of how to disseminate information and educational resources digitally as soon as possible and look forward to updating the market with detail regarding his plans to build WideAcademy into a credible and innovative brand at the appropriate time.
We expect him to dramatically build on the successes we have already experienced in this division. In September 2016 we announced, as part of our partnership with the University of Westminster, that we had devised a syllabus for a series of online short courses targeted at healthcare professionals wanting to expand their knowledge of stem cell technology, which does not currently form part of a medical degree. The courses aim to close the knowledge gap between healthcare professionals, to keep them abreast of advancements as the industry continues to advance, and will create a new revenue stream when they launch later this year. The courses will also provide the Group with access to professionals at the cutting edge of stem cell treatment and delivery, thereby creating access to an additional market segment to be targeted by both WideCells division and CellPlan.
Corporate
As the Group continues to establish itself in the global market, we have made a number of key appointments to support our sustainable growth. These include Alan Greenberg as Non-Executive Director and Vice President of WideAcademy. I am confident that we have secured a highly skilled and experienced team with the requisite skillset to make significant contributions to the wider growth of WideCells Group and to build the Company into a leader in the stem cell support services market.
Financial Overview
We successfully raised £2m before expenses in an IPO on the Main Market of the London Stock Exchange on 27 July 2016. This has enabled us to set up our operations for WideCells and WideAcademy in Manchester and for CellPlan in Porto and we are on target to begin sales in Q2 2017.
Outlook
WideCells Group is driven by a vision to unlock the potential of stem cells and make stem cell treatment affordable, accessible and achievable for families worldwide. We have taken significant strides forward this year to achieve this and have already positioned ourselves as a potential leader in the global stem cell services industry. With an expert leadership team, which has experience across a range of recognised and highly relevant brands, a host of global partners and strong foundations for growth already in place, we are extremely excited about the months ahead. The launch of the WideCells ISCT targeted for Q2 2017 will cement our position in the UK stem cell storage market and, we anticipate, will provide us with further openings for revenue generation and partnership opportunities. We remain in ongoing discussion with global cord blood banks as we seek to continue the expansion of CellPlan’s rollout to new markets globally. Alan Greenberg joining the team allows WideAcademy to move from strength to strength as we focus on building this division to become the go-to resource for professionals and consumers wishing to learn more about stem cells. We anticipate that the year ahead will be one of growth for the Group as we further establish our brand and continue to progress our vision.
Finally, I would like to take this opportunity to thank our shareholders who provide ongoing support as we continue to grow WideCells Group and distinguish ourselves in this market. This has been instrumental to our achievements thus far and we look forward to building your Company into a leader of stem cell support services in the global market
Dr Graham Hine
Chairman
