MDY Mdy Healthcare

RNS Number:1994F
MDY Healthcare PLC
05 October 2007

                               MDY Healthcare plc

                     Year end business and portfolio update


5 October 2007:  MDY Healthcare plc ("MDY Healthcare" or the "Company"), the
strategic investor in healthcare companies, today provides a pre-close update on
its business and investment portfolio following the completion of its financial
year on 30 September 2007.  The Company anticipates announcing its final results
in December and intends to publish its annual report shortly thereafter
following completion of the audit process.


Highlights

  * Successful development and validation of strategic investment business
    model

  * Total investments valued at approximately #10.6 million and cash deposits
    of approximately  #5.0 million

  * Five strategic public investments valued at approximately #5.0 million
    showing approximately 16% value increase

  * AOI Medical Inc. completed IPO in June

  * Medivance Inc. completed $23.0 million financing in July

  * Investment in Lombard Medical Technologies plc announced in August

  * Innovative JV with William Ransom & Son announced in August

  * Cash offer for Cozart plc in September represents 87% gain and #1.3
    million cash return to MDY Healthcare



Charles Spicer, CEO, said:

"We are delighted with the progress we have made in our first full year as a
strategic investor in healthcare companies despite challenging market
conditions.  Our portfolio of strategic investments is developing well and we
are close to our first cash exit thereby validating the MDY Healthcare business
model. With depressed asset values in the sector, we believe we are well placed
to make further selective investments and continue to structure innovative deals
that will deliver future shareholder value."



For further information, please contact:

MDY Healthcare plc
Charles Spicer, CEO
+44 (0) 207 647 1800
charles.spicer@MDYhealthcare.com


Financial Dynamics
Ben Atwell
+44 (0) 207 831 3113
ben.atwell@fd.com
John Gilbert
john.gilbert@fd.com


Notes for editors:

About MDY Healthcare

MDY Healthcare plc is a sector specialised strategic investing company quoted on
AIM (ticker symbol: MDY).  The company seeks to achieve superior returns for
shareholders by investing globally in companies, both public and private, across
the healthcare sector.  The directors, executives and senior advisors have
significant operational and investment experience in the sector and therefore
the ability to identify and review a wide range of potential investments.

Further information can be found on the website www.mdyhealthcare.com.





                               MDY Healthcare plc



                     Year end business and portfolio update



MDY Healthcare plc ("MDY Healthcare" or the "Company"), the strategic investor
in healthcare companies, today provides a pre-close update on its business and
investment portfolio following the completion of its financial year on 30
September 2007.  The Company anticipates announcing its final results in
December and intends to publish its annual report shortly thereafter following
completion of the audit process.



The Company had total investments valued at the year end of approximately #10.6
million and cash deposits of approximately #5.0 million (unaudited), most of
which remain held in US dollars.  This compares with investments of #6.3 million
and cash of #9.4 million as at 31 March 2007. The Company's core portfolio of
strategic public investments was valued at just over #5.0 million with its
strategic investment in a private company valued at approximately #2.7 million.
Investments in the Company's smaller trading portfolio were valued at
approximately #2.8 million.



During the course of the year, the Company has evolved its business model to
increase its focus on investment transactions where it can leverage the
specialised sector and transactional expertise of its executives, board and
senior advisers to add value to investee companies as a strategic shareholder.
MDY Healthcare supported the management team of Cozart to implement their
buy-and-build growth strategy over the last year.  Similarly, both of the
Company's US investments have benefitted from having a sector-focused strategic
investor based in Europe to assist them in developing their financing
strategies.  The JV with William Ransom is an example where MDY Healthcare
developed an innovative deal structure to support Ransom's strategic business
objectives, while preserving significant investment upside for the shareholders.




Looking forward, MDY Healthcare intends to focus increasingly on such
transactions in both the private and public arena, working with other providers
of capital where required.



Strategic portfolio



The Company currently has seven core strategic investments - five of which are
companies quoted on AIM, one is a private US medtech business and one is an
investment in a joint venture with another AIM-quoted company.



Each of these strategic investments has made good progress since MDY Healthcare
invested.  In particular, AOI Medical successfully floated on AIM, Medivance
successfully raised further equity finance while Cozart recently announced a
cash offer at an 87% premium to MDY Healthcare's cost of investment.



As at 30 September 2007, the overall book value of the strategic public
portfolio had increased by approximately 16%.  Three of the investments (Cozart,
Lombard and AOI) have increased in value, while two (Allergy Therapeutics and
Minster Pharma) are currently showing losses.  Allergy Therapeutics' share price
has suffered over the last three months following the unexpected clinical hold
imposed by the FDA on its key clinical trial following a single adverse event.
Minster's share price has suffered in line with the depressed share prices
across drug development companies.  The Company's investment in Medivance is
showing an approximately 10% increase in book value, based on the valuation
achieved at the recent financing.



The offer for Cozart represents the Company's first exit from a strategic
investment and the significant profit made in a short time demonstrates the
opportunities for gain in the sector even in challenging markets.  Assuming
completion of the offer for Cozart, MDY Healthcare's cash reserves will be
increased by approximately #1.3 million.



Cozart plc



Cozart is an AIM-quoted medical diagnostics company which develops, manufactures
and sells immunodiagnostic tests predominantly for the detection of drugs of
abuse.   MDY Healthcare has been a shareholder in Cozart since July 2006 and has
acquired further shares in a vendor placing and in the market taking the
Company's total interest in Cozart to just over 2% of the issued share capital.
On 5 September 2007, Cozart announced that it had reached agreement on the terms
of a recommended cash offer at 57.5p per share for Cozart by Concateno plc,
valuing MDY Healthcare's shareholding at approximately #1.3 million. On 4
October 2007, Concateno announced that the offer was unconditional in all
respects.



AOI Medical Inc.



Based in Florida, USA, AOI Medical is developing, and intends to commercialise,
innovative orthopaedic medical devices for the spine and trauma markets. In
September 2006, MDY Healthcare subscribed $1.5 million for ordinary shares in a
private placing. In June 2007, AOI Medical completed its IPO on AIM with the
Company investing a further #1 million and it now has approximately 8.6% of the
issued share capital valued at approximately #2.4 million as at 30 September
2007



In July 2007, AOI Medical announced the 510k submission for BAMF Spine (Balloon
Assisted Management of Spine Fractures) to the US FDA.  In September, AOI
Medical confirmed that BAMF Spine remains on track for commercial launch by the
end of 2007, subject to FDA approval.



Medivance, Inc



Based in Colorado, USA, Medivance is a leading company in the emerging field of
therapeutic temperature management. Medivance's non-invasive technology, Arctic
Sun(R) is patented and FDA approved to rapidly cool patients ("therapeutic
hypothermia") and precisely control their temperatures as a therapeutic tool.



In July 2007 MDY Healthcare subscribed a further $2.5 million in newly issued
equity in Medivance following its subscription for $2.5 million in convertible
loan notes announced in December 2006.  The July financing of $23.0 million was
led by Quellos Group, LLC, a US investment management company.  As a consequence
of the more recent financing, conversion of the convertible loan notes was
triggered at a discount of 15% to the price paid at that financing. Consequently
MDY Healthcare now owns approximately 9.8% of the fully-diluted equity of
Medivance valued at #2.7 million as at 30 September 2007.



Medivance has continued to roll out the Arctic Sun(R) product internationally.
In the year to date, Medivance has exceeded its annual plan expectations on a
number of levels including revenues, gross margin and expenses.  The Arctic Sun
(R) product is now available in Europe and Asia as well as in the US.  In the
UK, units have been installed in a number of leading hospitals.



Minster Pharmaceuticals plc



Minster is a drug development company that acquired from GlaxoSmithKline the
worldwide development rights of two compounds, tonabersat and sabcomeline, which
have already benefited from substantial investment by GSK.  Minster's lead
product, tonabersat, belongs to an exciting new class of drugs called gap
junction blockers, and is being developed as a prophylactic treatment for
migraine.



In March 2007, MDY Healthcare invested in Minster's fundraising, which raised a
total of #17.0 million.  Minster's share price has performed poorly during the
year reflecting the difficult markets for small cap companies generally and drug
development businesses in particular.  Following the original investment MDY
Healthcare has acquired further shares at significantly lower prices in the
market and now holds just over 2% of Minster's issued share capital valued at
approximately #0.6 million as at 30 September 2007.



Minster has started enrolment for their 500-patient phase IIb trial of
tonaberstat in the US where they see migraine prevention as one of the fastest
growing segments of the pharmaceutical market. They have also reported a
significant level of interest in tonabersat from potential licensing partners.



Allergy Therapeutics PLC



Allergy Therapeutics is a speciality pharmaceutical company focused upon the
treatment and prevention of allergy.  It has an existing European sales base, an
MHRA-approved manufacturing capability and a number of novel vaccines which have
already undergone initial clinical evaluation and once registered, could
potentially revolutionise the treatment of allergy.



In March 2007, MDY Healthcare announced that it had acquired shares in Allergy
Therapeutics and has subsequently bought further shares in the market and now
holds just over 0.7% of their issued share capital valued at approximately #0.4
million as at 30 September 2007.



Allergy Therapeutics has announced conclusive results of their oral allergy
vaccine study and the commencement of dosing in their Pollinex(R) phase III
ragweed trial.  They also announced that they have entered into a Euro40 million
debt facility with RBS.  In July 2007, Allergy Therapeutics announced that its
Pollinex Quattro clinical studies had been placed on clinical hold by the FDA
whilst the agency fully assesses the report of a rare adverse event classified
by the physician involved as 'possibly related' to the study drug.  Allergy
Therapeutics continues to grow its core business but the future direction of the
company is dependent on the clinical hold.



Lombard Medical Technologies PLC



Lombard Medical is a specialist cardiovascular device and polymer coatings
company. Its flagship product, the AorfixTM endovascular stent graft for
Abdominal Aortic Aneurysm (AAA), is CE Mark approved in the EU.   With currently
no device approved for the treatment of AAA's with neck angulations greater than
60 degrees, AorfixTM has a potentially unique product profile targeting an unmet
clinical need.



In August 2007 MDY Healthcare plc announced that it had acquired shares in
Lombard Medical participating in both the June 2007 equity fundraising and
subsequently acquiring shares at significantly lower levels in the market.  It
now holds just over 3% of Lombard's issued share capital valued at approximately
#0.5 million as at 30 September 2007.



Joint Venture with William Ransom & Son plc



Ransom is the UK's oldest independent pharmaceutical company and one of the UK's
leading natural healthcare companies.  It is the market-leading supplier of
glucosamine supplements and one of Europe's leading suppliers of retailed aloe
vera products.



In August 2007 Ransom and MDY Healthcare announced the establishment of a
multi-channel retail joint venture selling natural healthcare products direct to
consumers via the internet, mail order and telesales. The aim of the joint
venture is to capitalise on the rapid growth of e-commerce in the UK.  The
products will be primarily sourced and/or manufactured by Ransom, which will
also provide management support and fulfilment from its newly established
distribution centre in Bradford, UK.  MDY Healthcare will provide up to #3
million in loan capital to finance the joint venture which is expected to launch
commercial activities in 2008.



The newly created joint venture company will initially be majority-owned by MDY
Healthcare.  The board will include representatives of both Ransom and MDY
Healthcare.  Ransom will have the option to acquire 100% ownership of the joint
venture company in accordance with an agreed timetable and valuation process.



Trading portfolio



Separately from the strategic investments, MDY Healthcare has investments
valued, as at 30 September 2007, at approximately #2.8 million in a portfolio of
investments in healthcare companies listed on the Main Market of the London
Stock Exchange or quoted on AIM.  The recent disruption in global equity markets
has hit smaller capitalisation companies relatively hard and particularly the
healthcare sector. Whilst the Company realised some cash gains in early summer
from better performing stocks (including Optos, Corin and Renovo), the trading
portfolio is currently showing a net loss of just under 13%.



Conclusion and outlook



With a growing and ageing population and a clear need for new medicines and
treatments, the long-term underlying fundamentals for the healthcare market
remain favourable.  The current equity market turbulence has depressed the value
of most of the companies in the sector, providing a good opportunity to invest
in high quality businesses at lower valuations.  The directors of MDY Healthcare
believe that the current portfolio will generate significant value over the next
year.  Furthermore they are confident that, with the collective experience of
the board, executives and senior advisors, MDY Healthcare is well placed to make
further selective investments (such as Cozart) and continue to structure
innovative deals in the sector (like the Ransom JV) that will deliver future
shareholder value.






                      This information is provided by RNS
            The company news service from the London Stock Exchange
END

TSTMIBPTMMIMBFR

MDY Healthcare (LSE:MDY)
Historical Stock Chart
Von Jun 2024 bis Jul 2024

MDY Healthcare (LSE:MDY)
Historical Stock Chart
Von Jul 2023 bis Jul 2024