RUA Life Sciences FY royalty income impacted by FX movements

Medical device group RUA Life Sciences said on Monday that it had seen continued like-for-like growth in royalty income from its Elast-Eon polymer product but cautioned that foreign exchange headwinds would bring about an overall decline in the metric.

RUA's biomaterials unit, which holds the intellectual property rights to a range of long-term implantable biomaterials and derives its income from licence fees charged for the rights to use Elast-Eon in medical devices and royalty fees derived from the sale of Elast-Eon polymer or enabled devices, said final royalty statements were still awaited from certain licensees.

The AIM-listed group added that early indications were that volumes had increased despite the impact of Covid-19 on elective surgery, with royalty revenues anticipated to have grown by around 5% during the year ended 31 March in US dollar terms. However, when translated into sterling, the exchange rate movement during the year meant that royalty income was on track to have declined roughly 5% from the £450,000 reported a year ago.

No polymer licensing income was recognised in the year as the industry's focus was on Covid-19 related issues, meaning R&D projects were deferred and no new licences were signed.

The third-party device manufacturing business acquired by the group at the beginning of the financial year was impacted by reduced orders from customers, coming to £1.02m, broadly in line with internal budgets.

Chairman Bill Brown said: "During the year just ended, RUA Life Sciences achieved all of the objectives set. The acquisition of RUA Medical was fully integrated into the group, our first Elast-Eon enabled product has been readied for regulatory submission and proof of concept accomplished on the polymeric heart valve.

"This was all achieved within the cash resources available to the Group at the start of the year and the recent fund raise should allow RUA to continue its positive development."

As of 1140 BST, RUA shares were up 1.82% at 140.0p.