Join our community of smart investors

Tissue Regenix buys CellRight Technologies

The medical devices company used proceeds from a £40m share placing to buy the US-based business
October 3, 2017

It’s been a “transformational” year for Tissue Regenix (TRX), or so says management. The medical devices company raised £40m through a share placing and used a chunk of the money to buy CellRight Technologies, a US-based medical company. CellRight’s regenerative platform technology focuses on bone procedures, but has other applications in orthopaedics, spinal and general surgery. This is complementary to Tissue Regenix's soft-tissue-based dCELL platform.

It’s estimated that the CellRight acquisition will more than double group sales, and this should help Tissue Regenix achieve its target of profitability by 2020. Jesus Hernandez, founder and chief executive of CellRight Technologies, has also taken the position of chief scientific officer at Tissue Regenix. CellRight’s facility in San Antonio, Texas will become the new group US headquarters.

The surge in group revenue was driven by sales of DermaPure in the US, along with a full six-month contribution from joint venture GBM-V. Contracts with healthcare organisations Premier and Vizient helped generate revenue in the DermaPure US woundcare business. The cost of the product evaluation to see these contracts through caused margins in this division to slip, although management believes this will be short term.

Analysts at Hardman & Co expect a pre-tax loss of £13.1m in the year to January 2018, giving a 1.3p loss per share, compared with a £10m pre-tax loss and 1.3p loss per share in FY2016.

TISSUE REGENIX (TRX)   
ORD PRICE:11.4pMARKET VALUE:£132m
TOUCH:11.25-11.5p12-MONTH HIGH:21pLOW: 11p
DIVIDEND YIELD:nilPE RATIO:na
NET ASSET VALUE:0.64pNET CASH:£3.6m
Half-year to 30 JuneTurnover (£m)Pre-tax profit (£m)Earnings per share (p)Dividend per share (p)
20160.63-5.44-0.68nil
20171.38-5.430.60nil
% change+118---
Ex-div:na   
Payment:na