Concepta upbeat after first sales order from China

UK healthcare company Concepta announced on Tuesday that it received its first sales order for CNY 1.95million (£0.23m) for its myLotus fertility products from its partner in China, HuanZhong Biotech Company.

The AIM-traded firm said the sales order represented the first purchase for the company's myLotus products, and would see HZ Biotech distribute myLotus products in China to help achieve market penetration for the initial launch of the product in the country.

Concepta’s board said it anticipated that further sales orders would be made by HZ Biotech in line with its partner agreement going forward.

The myLotus product was described as “the only consumer product” which allowed both quantitative and qualitative measurements of a woman's personal hCG and LH hormone levels in an “easy-to-use” home test, to facilitate higher conception rates and early diagnosis of any fertility problems.

Competitor products currently only allowed qualitative measurement, and were based on the 'average woman', according to Concepta

The company did note that its original business plan envisaged commencement of sales during the first quarter of 2017.

Given the receipt of the China order, however, the board re-appraised its sales forecast for 2017, and now believed turnover for the year ending 2017 would be below market expectations.

As Concepta had delayed costs and initiated tight cost control, that will result in the losses for the year being broadly in line with current market expectations, however.

“This is a positive and significant milestone for Concepta and is the result of close co-operation with our Chinese partners, who have helped us refine our market entry strategies into China,” said chief executive officer Erik Henau.

“Through our office in Shanghai we continue to develop close local relationships that allow us to actively manage the profile and development of the myLotus brand.

“This first order allows us to test our three identified routes to market - IVF clinics, direct to consumer and hospitals - and we expect to make further announcements in the future as we look to expand our distribution network in China.”

Henau said the company was now in a position to activate the whole supply chain, leveraging core UK elements configured to provide a scalable international supply chain.

“This is the result of a significant investment in regulatory processes and physical assets enabling our modular systems to expand capacity in line with demand.”

Chairman Adam Reynolds added that it was a “significant undertaking” to transform a start-up situation with a pioneering product in development, to one where the infrastructure was maturing and initial distribution channels and sales had been established for a new product in an overseas territory.

“We are pleased that we have transitioned the company to that position, although as outlined above, we have experienced some delays to our hospital trials schedule that will impact revenue this calendar year.

“Nonetheless, Concepta has made significant progress since coming to market, and the infrastructure and relationships we now have in place provide an excellent platform for growth.”