LONDON (Alliance News) - ViaLogy PLC Friday became a molecular diagnostic company after buying Premaitha for GBP10.5 million, although it had to write down the value of the energy services business it is trying to offload because it is taking longer than it hoped to find a "suitable" partner for that business.
The company, which will change its name to Premaitha Health PLC, decided last year to offload the energy business, which was struggling to get its technologies accepted by major oil and gas companies. It also started looking for a new business that it could acquire, fundamentally changing its business in a move known as a reverse takeover under AIM rules.
"Premaitha offers us an exciting opportunity to acquire a molecular diagnostics company that has developed a non-invasive pre-natal screening test for Down's Syndrome. The IONA test is based on the analysis of fetal DNA in the maternal bloodstream, an approach that has been used since 2011 by several screening companies, principally in the USA. We believe that the IONA test will be the first regulated CE marked in vitro non-invasive diagnostic pre-natal screening product to market," Vialogy Chairman Adam Reynolds said in a statement.
ViaLogy's shares were down 21.6% at 0.149 pence early Friday, after it said it would pay for Premaitha by issuing 95.5 million new shares at 11 pence each, and had raised GBP6.5 million by placing 59.1 million new shares at the same price. It also launched an open offer of up to 6.7 million more new shares at the same price. The funds from the placing and open offer will be used to develop and commercialise the IONA test.
It is also planning a share consolidation, because it thinks it will benefit from having fewer shares in issue and trading in pence rather than fractions of a pence. If approved by shareholders, it will convert every 100 existing shares into one new share.
Premaitha's Chief Executive is Stephen Little who will continue to head the business.
Sandeep Gulati, chief executive and founder of the energy services business and group chief technology officer, has resigned as a director with immediate effect, Reynolds said in a separate statement.
"As far as our oil and gas services business is concerned, I have to report that it is taking longer than anticipated to secure a suitable partner for ViaLogy Energy Company, where we have a 75% holding. To this end the board has decided to provide against the assets of VEC to reflect the fact that, as at the balance sheet date, no suitable partner had been found," the company said in an earnings statement.
"The founder of the company, Dr. Sandeep Gulati, continues to pursue various avenues on our behalf and to enable him to concentrate on our US activities he has agreed to resign from the main board of the company," it said.
ViaLogy reported a net loss of GBP4.9 million for the year to end-March, wider than the 4.6 million loss it booked a year earlier. Revenue declined to GBP62,106, from GBP257,681, and while cost of sales dropped sharply, it booked GBP3.3 million in impairments for the energy business. Last year it had booked GBP2.2 million in depreciation.
By Steve McGrath; stevemcgrath@alliancenews.com; @SteveMcGrath1
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