Sinclair Pharma Regulatory News (SPH)

Sinclair Pharma plc

Acquisition of Worldwide rights to the Refine™ Support System, an FDA cleared suture based breast-lifting technology

Provides immediate access to a $600 million segment of the US aesthetic market via Thermi's sales infrastructure

Expands and complements Sinclair's portfolio of premium aesthetics brands

London,19 June 2017 Sinclair Pharma plc (SPH.L), ("Sinclair") the international aesthetics company, is pleased to announce it has acquired the Refine™ Support System, a patented and FDA cleared, suture based product primarily used in breast cosmetic and reconstructive procedures for a total consideration of up to $11.3m including regulatory and sales based milestones and royalties.

The Refine™ Support System, is owned by Refine LLC, and is a soft and flexible suture-mesh-anchor system that lifts and supports soft tissue. The Refine™ Support System will be incorporated into the Silhouette portfolio. The system can be used for a number of cosmetic or reconstruction soft tissue procedures, and can be used both as a standalone procedure or to help enhance many other regularly performed cosmetic and reconstructive procedures such as a breast lift and combined breast reduction and lift.

The global aesthetic breast surgery market is currently valued in excess of $1 billion per annum. Among the most common procedures in this market are breast augmentation with implants and/or fat transfer, breast lift procedures, and breast reduction. According to the American Society for Aesthetic Plastic Surgery (ASAPS), over 600,000 of these procedures were performed in the US in 2016, up 6% on the prior year. In each of these procedures, there is often the need for tissue repositioning and or support in order to achieve the maximum aesthetic result. It is estimated that around 20% of all aesthetic breast procedures predominately target lifting rather than volumisation.

Commenting on Refine™ Dr Bruce Van Natta, a board certified plastic surgeon and clinical assistant professor in the plastic surgery section of Indiana University Medical Center in Indianapolis says "Over the last several years I have had the opportunity to treat over 150 patients with the Refine™ Support System as we have developed the product and techniques. I have found Refine™ to be highly beneficial in both my breast lift and breast reduction procedures, providing a means to achieve and maintain upper pole fullness that I find to be unobtainable without Refine™. The technique learning curve is short and we have had minimal adverse events. My patients are very active and routinely engage in sports and aerobic workouts without any limitations. It would be very hard to imagine no longer having the Refine™ Support System in my armamentarium given the results and patient satisfaction we are achieving; results that we cannot obtain in any other way"

The Refine™ Support System has been cleared by the US FDA for the reinforcement of soft tissue in plastic or reconstructive procedures. Following completion of the acquisition Sinclair will submit the product for regulatory review in Europe and Brazil as well as other key aesthetic markets in Asia, Middle East and Latin America, with initial approvals and launches in the first non-US territories expected in 2019.

Sinclair has amended the existing distribution agreement with ThermiGen LLC to include the Refine™ Support System, which will allow the product to be sold alongside Silhouette Instalift™ by Thermi's existing sales force of over 60 representatives, with initial marketing efforts focussed towards their well-established plastic surgeon client base.

The shareholders of Refine LLC will receive an initial consideration of $0.6m.  They will also be eligible for future milestone and royalty payments. The total consideration will be split as follows 1) The up-front payment of $0.6m payable in cash 2) Deferred consideration of $0.6m payable in December 2017 in cash or shares at Sinclair's option, 3)Up to $6.1m in largely sales related milestone payments with full pay-out only achieved once cumulative sales exceed $10m 4) A single digit gross profit royalty, capped at $4.0m and payable only when cumulative sales have exceeded $5m.

"This acquisition is another important milestone in our strategy of building a leading global pure-play aesthetics company", said Chris Spooner, CEO of Sinclair. "The Refine™ product strengthens our Silhouette brand and gives us immediate access to the $600 million US breast cosmetic surgery market. We believe this product has significant global potential both as a standalone and to complement other regularly performed procedures. Following future regulatory approvals, we will launch the product into the other large aesthetic markets around the world, with the initial focus on Europe and Brazil."

Jeff Thompson, non-executive Director of Sinclair, has a beneficial interest of 52% of Refine LLC and in light of the total consideration that may be paid to Refine LLC the acquisition constitutes a related party transaction under the AIM Rules for Companies. The Directors of Sinclair, other than Jeff Thompson, having consulted with Peel Hunt LLP, the Company's Nominated Adviser, consider that the terms of the transaction are fair and reasonable insofar as the Company's shareholders are concerned.

The assets being acquired consist of patents, trademarks, product registrations and all knowhow relating to the manufacture of the product. The Refine Support System generated a pre tax loss of $50,000 in 2016 and the assets are valued at $nil in the balance sheet of Refine LLC.

This announcement contains inside information. The person responsible for arranging for the release of this announcement on behalf of Sinclair is Alan Olby, Chief Financial Officer.

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About Sinclair Pharma plc 

Sinclair Pharma plc is an international company operating in the fast growth, high gross margin, global aesthetics market. Sinclair has built a strong portfolio of differentiated, complementary aesthetics technologies, which are experiencing significant growth, targeting unmet clinical needs for effective, high quality, longer duration, natural looking and minimally-invasive treatments. The Company is planning entry to multiple new geographic markets and line extension launches over the next few years. Sinclair has an established sales and marketing presence in the leading EU markets and Brazil, and a network of international distributors.

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