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Thanks Sam. I couldn’t be there due to logistics. It helps me to see directors chatting things through so I’ve missed that this year.

Did you get any feeling that something is imminent from one of the divisions? It sounds like CM is gearing up nicely. Heart valve material is probably a patient game as a licence deal is quite a commitment from a major. But we know they need something significant to work with if they are going to wean themselves off the limited supply of animal tissue.

We know Vascular has been prepared to a point where it should be an “off the shelf” offering for any party that wants a project with all the development work done bar a clinical trial for a device that is well understood in the industry. All that differs is the sealant being an FDA approved polymer rather than an animal by product.

Who mentioned the Vascular ten bagger potential at the AGM? A director? I believe they think it is worth £25M as a business division (but discounted for the work left to complete) and will have to give away plenty of it in exchange for a funded partnership, but it’s encouraging they give it an outsider status still! It would be a shame to write off the £5M it has cost to date.

I like the way the update casually slipped in another £300k “win”. Predictably none of the madding crowd has reacted!

That’s close to what I expected for this announcement. The main thrust is a positive message, numbers pointing in the right direction and a hint that further announcements are forthcoming shortly with CM.

It’s got to be positive also that the MTA partner has requested further data. Their initial testing has not put them off the material. We know that everything to do with vital medical devices has to be got right and that always takes time.

Strange as it may seem, I prefer a RNS that doesn’t unleash the trumpets and bunting yet hints at good performance. Then, if and when the actual results and any other positive developments are announced, that should add some proper gas to the accelerator.

The AGM is on Tuesday and they usually do a pre-open statement updating anything relevant. No guarantees but it’s been the habit of recent AGM’s.

Two things immediately spring to mind.

1. The RUA material is a composite of the Elasteon polymer and finely woven medical textiles with the manner of its combination a highly valuable intellectual property. My understanding is that other polymer materials (including that of Foldax) are purely polymer based and have a disadvantage in design and flexibility compared to RUA’s composite.

2. There is a pressing need for the industry to make progress with a future material that can sustainably and reliably replace animal byproducts for the manufacture of valves. The composite also has the advantage of being uniformly produced, thus suitable for mass production whereas animal tissue is not uniform in its formation and requires more manual labour in manufacture.

In summary, any major that can be satisfied in initial tests is not going to hang around. If there is a promising breakthrough, they will snap up the rights to it before their competitors.

In case you need a reminder about the current investment case in RUA and the potential for progress, or simply want to beef up your knowledge of the company’s activities, it’s well worth a listen to RUA’s Dec 23 webinar presentation and the Q&A after it. Total length around 40 mins. Sound quality is variable so a pair of headphones might be in order to catch some parts!

https://youtu.be/wzBFcSQc6eE

Momentum and FOMO are not the same as leakiness. Look at the seller of 43,668 shares. The same number were bought yesterday and that person cleared a 1% profit and probably thinks he’s a genius. Safe to say the purchase was not founded on a leak. Most small cap buyers are FOMO merchants these days.

Greeneyes, on the CM point, I refer to my post of 25th July which highlighted what I consider to be enhancements to the details and information being given to us about how they hope to reach the £2M revenue target.

https://www.lse.co.uk/ShareChat.html?ShareTicker=RUA&share=Rua-Life-Sci&thread=A05EAA2B-2E90-4D49-8BB9-5111B65C50FE

On the MTA point, RUA have said they will make their data available to the major’s direct competitors soon. I would also expect the major to keep RUA informed about how testing is progressing and not to simply stay silent until the testing is done. An MTA is a two way agreement and RUA owns the product being tested.

The share price of RUA currently reflects your doubts and fears Greeneyes1. It offers no premium for anything good that could happen. It hasn’t moved an inch since the results and the new material contract. So it can’t be much of a worry to be a holder unless you fear a bigger market rout in general.

The current market cap is less than its latest published book net assets (cash £4M, other net assets £3M).

Sellers continue to bail on a regular basis in my opinion on boredom, with so much of the share capital base being issued at 11p last December. A mixture of boredom and a considerable ignorance on the part of the wider market of this company at all.

Most people who post here are invested because of the many potential catalysts that could occur. They’ve been explained in detail in the results commentary just published. Those that believe will hold, those that say they’ve heard it all before with this company will (perhaps with justification) will hold off or get bored and sell.

All I know is that, should any of these catalysts (MTA, CM, Vascular, etc) appear, there will be an awful lot of people not in this stock that suddenly will want to be.

All I would say is re-read the directors’ commentary in the final results covering all the divisions and see what they are saying about short, medium and longer term objectives across the businesses. Then read the following RNS about a new CM contract for £400k (a 25% uplift in CM revenues in one fell swoop).

Then realise that the AIM market is currently saying that all those businesses and prospects are basically in there for nothing. The balance sheet has £4M cash and £3M other assets. The market cap is £7M.

My head, on those facts, says that 11p is a decent entry price whatever my heart might be saying!

It’s not BS to say that Contract Manufacturing alone is worth £10M and with the pipeline that sounds very promising, £20M in the medium term. Biomaterials is easily worth £5M as a stand-alone royalty earner doing nothing but maintaining patents resulting in 85% net margins and a risk free £500k a year (FX the main variable). The results talked of some new possibilities there too via the Elasteon manufacturing partner, Biomerics Inc.

The depressed share price now has been because of excessive R&D spend, now being seriously reined in.

The licensing or other monetisation of vascular and heart valve is in for minus numbers effectively.

At 11p, I detect no BS!

In RUA’s final results, even ignoring the licensing possibilities for Vascular and Structural Heart products, I was intrigued by the comments around the Contract Manufacturing division (lest we forget that it is very profitable in its own right and as a standalone business right now is probably worth circa £10M on a PE ratio basis). The following quotes on CM stand out:

“Our stated ambition for Contract Manufacture is to double the scale of the business over the medium term. Business development activities are focused on long term high value strategic opportunities” …….

…….. “significant headway has been made with plans to increase Original Equipment Manufacturer (OEM) customer demand to meet our objectives” ……….

“We are confident of achieving our ambitions either through the c£2m in annualised revenue from current enquiries” …….or ………

…….”from a corporate opportunity presented through our strong client relationships.”

…….”Substantial opportunities are being pursued within Contract Manufacture and, with a following wind, could provide visibility to the ambitious growth plans” ……..

…….. “These opportunities alone would transform the Group without the potential for added value from the partnering to fund the regulatory pathway for Vascular and licensing of AurTex for heart valve leaflets”

I have to say that these last three entries pique my interest the most. The hints at “corporate” action, ambitious growth plans, transforming the group (without help from the juicier projects).

Let the market take its own sweet time!

Don’t know the chap’s thinking on the textile comment but rest assured it is the textile expertise that has differentiated what is now called AurTex from any other pretenders. It is the unique combination of Elast-Eon polymer with the fine textile that has enabled a 150 microns thickness material to be invented and tested to destruction. Far thinner than contemporary materials made from animal tissue.

I’ve learned from the company that the AGM is pencilled in for 27th August. That’s a week later than 2023 which followed results that were out on 26/7/23. New auditors this year too. I’m thinking maybe next week for final results on that basis.

I’m interested in latest events rather than the historic numbers so we should get a detailed account of where the company is at on all its projects. This company isn’t in the habit of dripping out titbits just to play to the gallery (which is fine with me).

RUA are Scottish. Just saying!

That’s not entirely true! I’ve certainly been topping up heavily over the last few weeks whenever I could buy sub-11p, especially since the awarding of options by the directors at 11p where they specified they would benefit in the event of a takeover or capital return.

Snouts in the trough maybe but one that we can share in at the same price.

John Rigg is elderly and I would guess tax planning ahead of likely hikes in capital taxes like IHT and CGT by the new govt. Seems sensible.

RUA have stated clearly in their recent RNS that they believe they are “…. a leader in developing next-generation alternative leaflet material resistant to Structural Valve Degeneration (SVD) ….”

Last month, Edwards Life Sciences (the US leader in TAVI heart valves) confirmed it was selling its critical care division in order to concentrate on heart valve technology. It’s worth reading the press release in this link.

https://ir.edwards.com/news/news-details/2024/Edwards-Lifesciences-to-Sell-Critical-Care-to-BD/default.aspx

In amongst it is the phrase:

“….. Edwards’ goal is to build the most comprehensive structural heart disease portfolio through its pursuit of breakthrough technologies…..”

There is no definitive source to say that Edwards is the party with which the MTA was signed by RUA but there are few majors out there that are so fixated on the heart valve scene. The closest other one is probably Medtronic but they have other interests as have Abbott Labs.

for year to 31/3/24, i am expecting contract manufacturing turnover of around £1.6m at a gross margin of 60% area so maybe gross profit around £900k.

turnover from royalties around £600k, so profit there of say £500k (direct costs are patent fees).

so that’s £1.4m gross profit before overheads which we are told were around £3.4m. therefore loss of circa £2m is my guess.

this will include a lot of the h1 problems already announced and i suspect some chunky pay offs in h2 to certain directors (stretton and anthony) and a good number of employees laid off since the vascular project was put on hold and offered out to future partners (if any).

these are “back of the *** packet” scribblings on my part!

what matters for the share price will be the commentary from the board (aka bill brown) about the future prospects of the divisions. hopefully, the cost base is also much reduced going forward, as suggested in the last rns.

The imminent final results should afford the company the chance to lay out in some detail what progress has been made in all of the divisions. Until then, we wait with anticipation!