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(Alliance News) - EKF Diagnostics Holdings PLC on Tuesday said it appointed Trellus Health PLC Interim Chief Financial Officer Stephen Young as its own finance chief, effective immediately.
The Penarth, Wales-based diagnostics company also removed any guidance for fermentation revenue across 2023 in a trading update which also saw falling revenue and adjusted earnings before interest, tax, depreciation and amortisation forecasts.
New York-based digital health platform provider Trellus Health replaced Young by appointing Joy Bessenger as CFO in a non-board capacity, effective from Monday next week and noting Young's departure to EKF.
EKF Diagnostics said Young has been working as a consultant at EKF Diagnostics for the last two months, working alongside outgoing CFO Marc Davies, who signalled his intention to step down in late June once a successor had been lined up.
EKF Diagnostics said Young is an "experienced finance director and CFO", joining from Trellus Health where had served as interim CFO in a non-board capacity since August last year.
Prior to working with Trellus, EKF Diagnostics said Young served as CFO at contract electronic manufacturer Axiom Manufacturing Ltd. Joining in 2009 when Axiom generated close to GBP12 million in revenue and was loss-making, EKF Diagnostics said Young supported the restructuring of the business to over GBP62 million in turnover in 2020.
Young also has experience with AIM-listed firms, such as serving as CFO at Pure Wafer PLC after being CFO at BBI Holdings PLC, EKF Diagnostics said.
"I'm pleased to welcome Steve Young to the EKF team and to work again with him after doing so at BBI," said Executive Chair Julian Baines, who was CEO at BBI during Young's seven-year tenure at the firm.
"Steve is a highly dependable and experienced CFO, with a strong working knowledge of how AIM companies operate, so I look forward to his support as we continue to execute against our plans for significant long-term growth."
Trellus Health said Bessenger's appointment as CFO came after working as a consultant since late July as part of an orderly handover from the outgoing Young.
Bessenger's most recent full-time role was at Nasdaq-listed clinical-stage biotechnology company IMV Inc, where she served as senior vice president of corporate strategy and investor relations.
In this role, Trellus Health claimed Bessenger took responsibility for a large portion of the CFO role, "working closely" with the IMV chief executive officer to "develop a new capital markets and corporate strategy, helping to secure a USD25 million debt facility and engaging with current and potential partners, as well as institutional investors".
More widely, Trellus Health said Bessenger has over 20 years of experience with "both privately and publicly held life sciences and healthcare companies", with "significant experience" across finance, operations, corporate strategy and development, compliance and governance and strategic communications.
From 2017 to 2019, Trellus Health noted Bessenger served as senior vice president of finance and strategy at 1N8bio, a then-privately-held biotechnology firm, where she helped raise a USD10 million Series A funding.
Before this, Trellus Health also noted Bessenger co-founded and served as CEO at privately-held forensic animation firm 3D Forensic Inc, where she raised seed investment from angel investors and developed a five-year strategic plan.
"I believe her wealth of experience in life sciences and healthcare companies will be of great value to Trellus Health as we look to further execute our commercial strategy and secure additional partnerships, having evolved our delivery model and aligned our expenditure to lengthen the cash runway into at least 2025," said Trellus Health Co-Founder & CEO Marla Dubinsky.
Incoming Bessenger added: "I believe the Trellus Elevate program has the potential to change the lives of people with chronic illnesses. I am excited to join Trellus Health at this stage in its journey and help deliver its whole-person healthcare approach to as many people as possible."
Also on Tuesday, EKF Diagnostics provided a trading update in which it revised guidance for its 2023 full-year performance, despite continued growth in Point-of-Care and good progress in the Life Sciences fermentation capacity expansion.
It said it was removing any guidance for fermentation revenues in 2023 and expects to see a "steadier build-up" of revenues in 2024 "as capacity comes online, production projects commence and utilisation increases through the year".
This is because while EKF Diagnostics said good progress was being made to increase its fermentation capacity, and both Point-of-Care and Life Sciences businesses performing well in the first half of the year and into the third quarter on strong sales of beta-hydroxybutyrate, it said the process of validation and verification "had not been sufficiently factored into current timescales for installed equipment to become fully operational".
Further, EKF Diagnostics said customer needs for downstream processing "have become apparent", meaning that, due to these factors, only limited initial scale-up revenues will be generated from this additional capacity during 2023.
EKF Diagnostics now expects to deliver around GBP53 million in revenue and around GBP10 million in adjusted Ebitda in 2023, when considering the above factors in the context of continued growth across the rest of the business. This would be down 20% from GBP66.6 million and down 33% from GBP14.9 million in 2022 respectively.
Executive Chair Baines also confirmed to the board he will increase his commitment to the firm, after originally assuming the role on a short-term basis. He will remain executive chair while the process of recruiting a new CEO will be halted.
Instead, EKF Diagnostics said Baines will work with the newly-appointed CFO Young and the wider management team to "ensure that EKF on track to deliver against revised guidance and significant growth prospects over the longer-term".
"In our last trading update, we flagged that the delivery of management's adjusted Ebitda expectations for this year remained very much dependent on the timing of bringing revenues from our new Life Sciences capacity online," said Baines.
"We remain very confident about the longer-term growth prospects from our newly expanded fermentation capacity, but believe it is prudent to reduce short-term guidance to reflect the revenue build now starting in 2024.
"I am pleased to confirm my increased commitment to EKF as executive chairman, reflecting my determination to ensure that our newly expanded South Bend facility is a success. I'm also delighted that we are delivering steady growth in our Point-of-Care division and [beta-hydroxybutyrate] sales, and remain very confident in our ability to deliver the longer-term, significant growth prospects for our LifeSciences business."
EKF Diagnostics will release its unaudited half-year results on September 26.
Shares in EKF Diagnostics were down 3.5% to 25.10 pence each in London on Tuesday afternoon, while Trellus Health were down 2.9% to 6.07p each.
By Greg Rosenvinge, Alliance News reporter
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