Microsaic Regulatory News (MSYS)

24 September 2021

Microsaic Systems plc

("Microsaic" or the "Company")

Microsaic sign manufacturing, supply, and service agreement to support China operations

Production assembly to commence this year and on track for China medical device licence in 2022

Microsaic Systems plc (AIM: MSYS), the developer of point of need mass spectrometry ("MS") instruments and solutions, is pleased to announce it has signed an agreement with Jiangsu Henzhihe Technologies Co. Ltd. ("HZH"), to support the Company's relationship with the Chinese distributor (the "Distributor"), with whom the Company announced a signed Heads of Terms for its micro-engineered MS technology (per the RNS dated 4 May 2021). Under the agreement ("Agreement"), HZH will provide integration and service support for Microsaic's operations in China.

HZH will act as the manufacturer, integrator, and service centre in support of distribution and prospective OEM partnerships in China. HZH is a recently incorporated entity whose directors have a long history of working with MS in China and manufacturing other analytical devices, and in active pharmaceutical ingredients ("API"). Their relationships include large analytical instrumentation and pharmaceutical companies. HZH and Microsaic will collaborate with distribution partners to access and service other substantial growth opportunities in the Chinese market.

Production in China of the MS hospital diagnostic monitoring equipment is expected to commence before the end of this year to support the Chinese Distributor through local production and service support, which are pre-requisites to securing a medical license. The Agreement establishes a local presence for Microsaic, accelerating the Company's growth opportunity in China. With an addressable market of 33,000 hospitals having 7.9 million beds1, having the ability to scale local production for MS therapeutic drug monitoring ("TDM") and maintain supply and service capability is essential.

Multiple revenue streams are expected in due course, consisting of the sale of MS TDM units, franchise services and sales of reagents, in-line with Microsaic's business strategy.

Once the medical license in China has been secured in 2022, HZH and the Company estimate a target rising to 100 units per annum for each therapeutic drug monitoring sector over the next two to three years, and there several sectors in this market and in other analytical sectors. HZH has confirmed it can meet the prospective demand requirements of Microsaic for China and the rest of the world.

Glenn Tracey, CEO of Microsaic Systems plc, commented:

"With the Company on track to secure a China medical device licence in 2022, developing the capability with local partners for mass production of Microsaic equipment in China represents a significant opportunity to reduce costs and increase available margins for these devices. This demonstrates our commitment to position our point-of-need technology in a broad range of key verticals within the human health diagnostics sector.

"With a focus on commercialisation of sample-to-result platforms, and equipment with network management software capability (and later artificial intelligence ("AI") software, we look forward to providing further updates on production and distribution to the market as they arise."

Abbin Huang, MD of HZH, commented:

"The Microsaic miniaturised mass spectrometers are unique and of great interest for a range of markets in China. We particularly see great potential in clinical and bioprocessing applications where real-time, point-of-need data is extremely valuable. We look forward to a long-term and close collaboration with Microsaic to serve the needs of the Chinese market."

1China Hospital Industry Report, 2019-2025

About Microsaic

Microsaic listed on AIM in 2011 to develop and commercialise micro-engineering chip-based mass spectrometry equipment. Having invested £30m over the last 20 years before and after the IPO, Microsaic has a robust patent portfolio in cutting-edge technology purpose built for "Industry 4.0" which enables analytical detection and characterisation at the point-of-need, whether within a human health environment, conventional laboratory setting, or within a bioprocessing facility for continuous mass spectrometer detection and monitoring of data at any step in the process workflow.

About Jiangsu Henzhihe Technologies Co. Ltd

An OEM provider of analytical solutions which includes hardware, such as HPLC, Mass Spectrometers, sample preparation devices etc., software and application development, for the markets ranging from environmental and food testing to pharmaceutical analysis, as well as clinical diagnostic analysis.