Belluscura Regulatory News (BELL)

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Belluscura PLC

("Belluscura" or the "Company" or "Group")

Admission to trading on AIM

& First Day of Dealings

Capitalised terms used in this announcement shall, unless the context provides otherwise, have the same meaning as defined in the Admission Document.

LONDON, U.K. AND PLANO, TX, U.S. (28 May 2021). Belluscura plc (AIM:BELL), a leading medical device developer focused on lightweight and portable oxygen enrichment technology, announces that admission to trading on AIM ("Admission") will take place and dealings will commence at 8:00 a.m. today under the ticker BELL and ISIN GB00BD3B8Z11.

The Company's Admission Document is available here: investors.belluscura.com

Key Highlights:

· Successful Fundraising for gross proceeds of £17.5 million, at an Issue Price of 45p

· The oversubscribed Fundraising was strongly supported by new and existing investors

· Market capitalisation of approximately £50.96 million on Admission

· Enlarged Share Capital on Admission of 113,240,735 Ordinary Shares

· The Placing Shares and Subscription Shares represent 34.34 per cent. of the Enlarged Share Capital

· SPARK Advisory Partners Limited acted as the Company's Sole Nominated Adviser and Dowgate Capital Limited acted as Sole Broker and Bookrunner in relation to the Placing and Subscription.

About Belluscura:

Belluscura's first product, the X-PLO₂RTM, is a lightweight FDA cleared portable oxygen concentrator ("POC") designed to replace larger, metal oxygen tanks and heavier portable oxygen concentrator devices. The X-PLO₂R weighs less than 1.5kg (3.25lbs) and the Directors believe it is the world's first modular portable oxygen concentrator and that it will generate more oxygen by weight than any other FDA cleared POC in its class. The X-PLO2R can deliver up to 95% pure oxygen to patients 24 hours a day, 7 days a week to help improve the quality of life for millions of people worldwide who suffer from chronic lung diseases, such as Chronic Obstructive Pulmonary Disease ("COPD") and respiratory distress caused by COVID-19. The X-PLO₂R will be launched shortly and additional products within the range will be launched within the next 12 months.

Belluscura either owns or exclusively licenses a total of 26 patents and applications relating to oxygen enrichment devices and treatments.

Background & history

Belluscura was established in the UK in December 2015 with the object of commercialising intellectual property in the medical device space. The Company is currently focused on devices and treatments involving enriched oxygen.

The Company has raised approximately $11.7 million since 2018 in a number of fundraising rounds in order to develop and commercialise the Company's product portfolio.

In February 2017, Belluscura entered into a co-exclusive licence and development agreement with Separation Design Group LLC ("SDG") of Waynesburg, Pennsylvania, to jointly develop and commercialise the X-PLO₂RTM portable oxygen concentrator, a device that weighs less than 1.5kg, yet can deliver up to 800ml per minute of pulse dose enriched oxygen to a patient prescribed long term oxygen therapy. This agreement was updated in March 2021 to be an exclusive licence and development agreement.

SDG owns patents and patent applications covering novel oxygen enrichment technologies and treatment devices and methods. Through joint development efforts with SDG and the licence, Belluscura now either owns or exclusively licenses a total of 26 patents and applications relating to oxygen enrichment devices and treatments.

The Belluscura and SDG development relationship also includes the development of additional products, the X-PLO₂R CXTM and the X-PLO₂R DXTM portable oxygen concentrators. The X-PLO₂R CX is expected to produce the equivalent of 4 litres pulse dose oxygen and 750ml continuous flow oxygen. The X-PLO₂R DX is being designed to produce the equivalent of 6-litres pulse dose oxygen and 2-litres of continuous flow oxygen.

On 2 March 2021 Belluscura received 510(k) clearance from the US Food &Drug Administration ("FDA") for the X-PLO₂R. The Directors do not anticipate requiring additional FDA 510(k) clearances to launch the X-PLO₂R CX and the X-PLO₂R DX portable oxygen concentrators, as it expects to be able to self certify under "substantially equivalent" protocols of the FDA.

Belluscura plans to launch the X-PLO₂R shortly and the X-PLO₂R CX and X-PLO₂R DX within the next 12 months. The Company has a manufacturing agreement to produce the products in the USA. Following a soft launch, the Company plans to appoint distributors in the US to give US-wide coverage; this is expected to occur in the second half of 2021 and into 2022. Belluscura will commence International Regulatory clearances during 2021 and 2022 before expanding distribution globally. Following launch in the US, the Company intends, in due course, to pursue commercialisation in the UK, EU, Japan, South Asia, Australia, South America and Latin America.

Belluscura has an experienced executive management team with significant expertise in the medical devices industry and UK public companies.

The Company has conditionally raised £17.5 million (before expenses) by the issue of 38,244,444 Placing Shares and 644,444 Subscription Shares at the Issue Price pursuant to the Placing and the Subscription. From the net proceeds of the Placing and Subscription, the Directors currently intend that some £3.0 million will be used to launch the X-PLO₂R and some £8.0 million will be applied to progress Belluscura's oxygen enrichment product portfolio.

The Market

The global respiratory care devices market is estimated to be $23.4 billion in 2021 and expected to reach $28.6 billion by 2024, growing over $1.7 billion per year. (Source: Research&Markets.com - Global Respiratory Care Devices market)

Supplemental Oxygen Therapy Market 

Within the respiratory care devices market, the supplemental oxygen therapy devices market was forecast in 2018 to grow by 6 per cent. per year from $3.2 billion in 2021 to $4.2 billion by 2026.

The impact of the COVID-19 pandemic has led to an increase in this growth forecast to 11 per cent. per annum. The market is now forecast to reach $5.7 billion by 2026, an increase of 66 per cent. over the next 5 years. The World Health Organisation ("WHO") announced on 24 June 2020 that it would be purchasing 184,000 oxygen concentrators, valued at over $100 million, to address oxygen shortages in 120 countries. (Source: Reuters, 24 June 2020 https://www.reuters.com/article/us-health-coronavirus-who-milestone/who-warns-of-oxygen-shortage-ascovid-cases-set-to-top-10-million-idUSKBN23V2FG)

As of February 2021, the WHO and partners have distributed over 30,000 concentrators and 40,000 pulse oximeters and patient monitors, reaching 121 countries, including 37 countries that are classified as "fragile".

Respiratory Diseases

The principal respiratory disease that requires management through the prescription of supplemental oxygen is Chronic Obstructive Pulmonary Disease. In addition, other respiratory diseases where symptoms are alleviated through supplemental oxygen include Coronavirus, Pulmonary Fibrosis and Cystic Fibrosis.

Chronic Obstructive Pulmonary Disease

COPD is the name for a group of lung conditions that cause breathing difficulties. These conditions include Emphysema, Chronic Bronchitis and Asthma. COPD typically affects middle-aged or older adults who smoke. The World Health Organisation estimates that 328 million people globally have COPD, of whom 65 million have moderate (Stage 2) or Severe (Stage 3) symptoms.

Although originally more common in men, due to increased smoking among women the disease now affects men and women almost equally. COPD also affects non-smokers, though smoking is the cause of 90 per cent. of COPD cases.

Symptoms of COPD comprise breathlessness, a persistent chesty cough, frequent chest infections and persistent wheezing. COPD is progressive and incurable, and by 2030 it is forecast that it will be the third leading cause of death worldwide.

In the early stages of COPD, the progression of the disease can be slowed by inhalers, tablets and pulmonary rehabilitation. As symptoms become more severe, oxygen enrichment products are used to prevent the level of oxygen in the blood falling to a dangerously low level.

COVID-19

The use of oxygen concentrators is a cornerstone treatment for COVID-19, with the WHO indicating that it intends to purchase over 100,000 units to distribute globally. The NHS is recommending oxygen for COVID-19 patients that are breathless and have blood oxygen saturations less than 94 per cent.

Although most people recover from COVID-19 after a short period, for some people, the symptoms can last for considerably longer. According to the NHS, long Covid symptoms include shortness of breath which may require the use of oxygen concentration treatment.

Other Respiratory Diseases

Although COPD is the primary disease for which oxygen enrichment products are used, they are also used to alleviate the symptoms of Pulmonary Fibrosis, Cystic Fibrosis and other respiratory disorders. Currently, it is estimated that 1.5 million adults in the US and 3.5 million adults in Europe use supplemental oxygen for these respiratory disorders.

Use of Proceeds

The net proceeds of the Placing and Subscription are expected to be approximately £16.1 million and are

currently intended to be applied as follows:

· Widening staffing resources within Engineering & Quality, Marketing, Sales & Customer Service,

· Compliance & Finance and appointing a key Manufacturing & Regulatory Executive;

· Marketing of the product ranges, including building the brand, improving the website functionality and

· SEO and social media presence;

· Funding towards the FDA Medical Device Compliance, IT & Data Compliance and CE Mark Clearance;

· Research & Development into new products and increasing testing capabilities;

· Funding for the overheads of the firm such as running the offices; and

· Initial working capital funding.

Business Model and Strategy

Manufacturing

With FDA clearance received, the Group is now pressing ahead with developing the manufacturing capability. Belluscura is outsourcing manufacturing of the X-PLO₂R to two separate US companies that have expertise in producing medical device products. The battery manufacturer is a leading provider of advanced battery and power systems for global Original Equipment Manufacturers ("OEMs"). The unit and zeolite cartridge manufacturer is a full service electronics manufacturing and custom material solutions provider with a proven track record of supplying state-of-the-art solutions to a diverse group of OEMs. These manufacturers are established US companies, which removes concerns on cross-border supply chain issues. The companies are certified to ISO 13485 and ISO 9001 standards.

The production process is advancing well and the Directors do not envisage any issues in the scaling up of production as demand builds. Further, as the level of demand increases the Group will be able to optimise the production process, thereby increasing gross margin.

Commercialisation Strategy

The Directors have adopted a five-phase process for the commercialisation of the X-PLO₂R portfolio.

Phase 1

The X-PLO₂R will launch in July 2021 with online distributors. The X-PLO₂R CX is targeted for launch in December 2021 and expected to be available in the market from January 2022 onwards.

Phase 2

The Company expects that the X-PLO₂R will launch with MediCare providers in November 2021 and in the market via this route from December 2021 onwards. It is also expected that the X-PLO₂R CX will launch with various providers in January 2022 and in the market from February 2022 onwards

Phase 3

The Company expects to begin the marketing and manufacturing with medical companies that may produce the X-PLO₂R portfolio under a private label as early as the second half of 2021.

Phase 4

The Directors intend to develop the Web E-Commerce to sell directly to consumers in December 2021, and launch these sales in February/March 2022.

Phase 5

The X-PLO₂R DX is expected to launch in March 2022

Robert Rauker, CEO of Belluscura, said:

"The Belluscura team is excited to be trading on the AIM market of the London Stock Exchange. We are pleased to welcome new shareholders and thank them for their support in the Company. We are an oxygen enrichment company dedicated to improving the quality of life for those patients requiring supplemental oxygen.

"We believe our patented X-PLO₂R range of small and discreet portable oxygen concentrators, delivering more oxygen by weight than any other device in their class, will be well-received in the large, expanding supplemental oxygen market."

For further information please contact:

About Belluscura plc (www.belluscura.com)

Belluscura is a UK medical device company focused on developing oxygen enrichment technology spanning broad industries and therapies. Our innovative oxygen technologies are designed with a global purpose: to create improved health and economic outcomes for the patients, healthcare providers and insurance organisations.