Skin wound firm puts London IPO back on agenda
Cambridge skin wound specialist, Clinical Cell Culture, is reconsidering the possibility of raising up to £5 million by way of a listing on the London Stock Exchange before the year is out.
A 12 month delay in obtaining US regulatory approval for one of its flagship products, ReCell®, and slower than expected product sales elsewhere has forced the innovative biotech to review strategy, which includes raising new capital in 2006.
Further changes include cutting back on the development of its EpiGrow R & D project and the reduction of its staff by more than a quarter.
Clinical Cell Culture (C3) transferred its headquarters to the UK 18 months ago, lured in part by the potential opportunities offered by AIM, though it had no immediate plans to list.
However, a monthly cash burn of £330,000 and a 12 month delay for the lucrative US market has forced its hand and C3 now has to decide between a new listing on AIM or a placing on the Australian Stock Exchange where it is already a quoted company.
C3 chief financial officer, Andrew Cannon, said: “We are looking at different alternatives to raise money. The preferred option is a dual-listing on AIM or a placing in Australia, which will happen within the next 12 months.”
According to C3 chairman, Dalton Gooding, it could happen sooner. In the company’s new strategy statement, he said C3 was likely to raise capital in 2006 to fund its growth strategy, with the precise amount primarily determined by the rate of product uptake and penetration.
The news comes 12 months after its first ReCell sale. At the time C3 expected break-even to follow quickly behind launch in Japan, Europe, South and North America, which was anticipated for the end of 2005.
One year on and the former Australia-based firm has struggled to hit its targets due to the delays in securing regulatory approvals in both the US and Australia and slower than expected product sales in Asia in particular.
In response C3 has made a number of changes to strategy including increasing transparency through the publication of the its revenue targets for the next three financial years.
Cannon, said: “We wanted to provide some guidance to the market so are coming clean.” Sales revenue for the current financial year (FY) is forecast to be in the range of £450k – £577k, FY 2007 £2.1m – £2.9m and £4.9m - £6.6m in FY 2008.
Gooding, said the board had adopted a conservative approach to the sales revenue projections and that it was important for shareholders to have a good understanding of C3’s commercial prospects, which includes current opportunities.
He said: “C3 products are approved for sale in many major markets such as the UK, Germany, Italy and Japan where we have distributors in place and product sales already occurring.”
Other changes installed include the reduction of C3’s workforce from 20 to 14, mothballing of the EpiGrow project and an increased sales drive in underperforming areas.
ReCell is an innovative ‘off the shelf’ medical device for harvesting autologous skin cells. The device uses the patient’s own skin biopsy to produce a large enough cell population to treat minor burns and wounds within 30 minutes.
C3 believes things in the US are more positive following a meeting with the Food and Drugs Administration (FDA) in which it confirmed the preferred regulatory approval approach for ReCell, including guidelines for the clinical trial and the re-submission of its application.
C3 has already started preparations for the trials, which will be completed in the first half of 2007. A final response from the FDA is anticipated in Q3 2007 and first US revenues pencilled in for FY 2008.
A decision on Australian approval is expected before the end of the current financial year in June.
Of the six staff being made redundant, two will go from the Asia Pacific area, one from the European clinical affairs department and three from the EpiGrow project, C3’s product for chronic wound applications.
It is now investigating two alternative chronic wound products with shorter lead times to bring to market.
C3 is also in the process of evaluating alternative adv-anced surgical skin focused products and collaborations that are complementary to the existing C3 products and which will have the potential to generate revenue in the short term.
The majority of functions such as R & D, manufacturing and distribution will continue to be outsourced.