YGEN.L Regulatory News (YGEN)

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THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR IMMEDIATE RELEASE FOR THE PURPOSES OF ARTICLE 7 OF EU REGULATION 596/2014.

Yourgene Health plc

("Yourgene" or the "Company")

Acquisition of French distribution channel

& Direct Subscription to raise £2.5m

Manchester, UK - 10 March 2020: Yourgene (AIM: YGEN), a leading international molecular diagnostics group, announces the acquisition of AGX-DPNI S.A.S., a newly formed entity comprised of the NIPT distribution business of AdGeniX S.a.r.L ("AdGeniX"), the Company's current French distribution partner for its IONA® test, for an initial cash consideration of €2.4m (c. £2.0m) and up to a maximum of €1.7m (c. £1.4m) in cash earn-out payments based on sales growth performance criteria (the "Acquisition").

In addition, the Company has raised gross proceeds of £2.5 million by way of a direct subscription of 17,482,517 new ordinary shares (the "Direct Subscription") at 14.3p per ordinary share (the "Placing") with BGF Investment Management Limited ("BGF"), an existing significant shareholder of the Company. The net proceeds of the Direct Subscription will be used to satisfy the initial cash consideration and for general working capital purposes. Cash-based earn-out payments are expected to be met using the Company's future cashflows arising out of the Acquisition.

Acquisition highlights

· Acquisition of AGX-DPNI S.A.S., incorporating all customer contracts, current employees and assets that relate to the NIPT distribution business of AdGeniX

· France is a key growth market for NIPT with French Government reimbursement agreed in early 2019 and 75% growth in Yourgene NIPT volume sales in 2019

· Acquisition timed ahead of further anticipated market growth and Yourgene's launch of the Illumina-based IONA® test

· The Company estimates an immediate EBITDA uplift in first year of c.£0.5m from internalising distributor margins

· NIPT customers in France are mainly large private laboratory networks which have nationwide coverage and better access to new high growth markets in the French-speaking Africa and Middle East regions

· Integrates the NIPT commercial channel in France with the Company's own direct channel that was acquired through the Elucigene acquisition in April 2019, allowing further range-selling opportunities including further uptake of the reproductive health product portfolio, across public and private health networks

About AdGeniX (https://www.adgenix.fr/)

AdGeniX is a privately held French company, based near Versailles, Paris, with over 25 years' experience of selling into the cytogenetic and pharmaceutical laboratory markets. They were appointed as distributors for Yourgene's IONA® test in 2015 and have built a significant market position for the product in France. Since first sales in 2016, NIPT sales volumes have grown rapidly and the Company expects this trend to continue, particularly following the introduction of reimbursement by the French Government for NIPT in 2019 (in France DPNI - dépistage prénatal non-invasif). In addition, the Company expects to further increase NIPT sales volumes in this market following the launch of the Illumina-based IONA® test, for which it recently submitted its technical file to its EU notified body for CE-IVD approval.

Consideration

An initial cash consideration of €2.4m will be payable upon completion. A further two cash payments of €0.6m each will be payable in October 2020 and April 2021 dependent on NIPT sales growth during the period, with a final cash bonus of up to €0.5m due in April 2021 if NIPT sales exceed additional agreed targets. The executive management of AdGeniX are contracted during the earn-out period to ensure a successful transition and customer continuity, with an additional multi-year non-compete provision from completion.

Lyn Rees, CEO of Yourgene, commented: "The Acquisition of our French distributor makes sense for Yourgene on a number of levels. This has an immediate and positive impact on earnings and is an opportunity to fully capitalise on our rising NIPT sales in this growing market alongside our current direct sales of additional reproductive health products. This also allows us to gain maximum benefit from the launch of our Illumina-based IONA® test and increases our ability to range-sell additional content into France and beyond. 

"Whilst this provides us with our first direct commercial presence in Europe, and gives us an EU-based presence post-Brexit, it also opens up access to high growth French speaking African and Middle Eastern markets not previously addressed by Yourgene. I would also like to thank BGF for their continued support for our ambitious growth strategy."

Issue of Equity and Total Voting Rights

The New Ordinary Shares will rank pari passu with all existing ordinary shares in the Company. The Direct Subscription is being made under existing shareholder authorities and following Admission, BGF will own 8.1% of the issued ordinary share capital of the Company.

Application will be made to London Stock Exchange for the admission of 17,482,517 New Ordinary Shares to trading on AIM (the "Admission"). It is expected that Admission will occur and that dealings in the shares will commence at 8.00 a.m. on or around Friday, 13 March 2020. The New Ordinary Shares represent approximately 2.9% of the existing issued ordinary share capital of the Company. 

Following Admission, the Company will have 616,482,205 ordinary shares in issue. No ordinary shares are held in treasury. The total number of voting rights in the Company will therefore be 616,482,205. The above figure may be used by shareholders in the Company as the denominator for the calculations by which they will determine if they are required to notify their interest in, or a change in their interest in, the share capital of the Company under the FCA's Disclosure Guidance and Transparency Rules.

About Yourgene Health plc

Yourgene is an international molecular diagnostics group which develops and commercialises genetic products and services. The group works in partnership with global leaders in DNA technology to advance diagnostic science.

Yourgene develops and commercialises simple and accurate molecular diagnostic solutions, primarily for reproductive health. The Group's products include non-invasive prenatal tests (NIPT) for Down's Syndrome and other genetic disorders, Cystic Fibrosis screening tests, invasive rapid aneuploidy tests, male infertility tests and genetic disease tests. Yourgene's commercial footprint is already established in the UK, Europe, the Middle East, Africa and Asia.

Our product development, research service and commercial capabilities extend across the lifecycle of genetic test development including regulatory submissions. Through our technical expertise and partnerships, Yourgene is also extending its genetic testing offering into oncology.

Yourgene is headquartered in Manchester, UK with offices in Taipei and Singapore, and is listed on the London Stock Exchange's AIM market under the ticker "YGEN". For more information, visit www.yourgene-health.com and follow us on twitter @Yourgene_Health.