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Concepta to accelerate expansion of myLotus in China following fundraise

The expansion drive is targeting an estimated 2.3mln women per year in the areas of Hebei, Shanghai, Beijing, Shangdong, Henan and Liaoning
myLotus kit
myLotus is an easy-to-use home test that has been developed for women who have been trying to conceive for six months or more

Concepta PLC (LON:CPT) received strong backing from its owners as it raised  £2mln in an oversubscribed share placing to fund the expansion of its myLotus product in the Chinese market.

The AIM-listed fertility products manufacturer placed shares at 4p each to establish robust sales channels in China.

MyLotus is an easy-to-use home test that has been developed for women who have been trying to conceive for six months or more.

It measures hormone levels in urine to give quantitative and qualitative measurements that might help explain the apparent lack of fertility.

That is a problem in China as much as elsewhere and Concepta is targeting 2.3mln women across the areas of Hebei, Shanghai, Beijing, Shangdong, Henan and Liaoning through initial distributor agreements.

In April the firm inked a deal with SinoPharm, the largest state-owned pharmaceutical company in China.

Under the terms of the deal, the Concepta will receive regular quarterly orders for myLotus meters from SinoPharm, with 50% of the payment made upfront and 50% paid on delivery.

SinoPharm - which has annual sales of over £23bn - will coordinate the logistics and distribution of units with Concepta’s China office executing the marketing plan.

The UK healthcare company said the contract will run to 31 December 2018 and will be renewed on a yearly rolling basis thereafter.

Deal with SinoPharm brings “trust” to Chinese venture

Concepta hopes the deal will ease some of the delays and supply side problems that have hampered its launch into China.

One of the key stumbling blocks entering the market was getting distributors to commit to large up-front block orders, which Henau admits was “perfectly good practice in the olden days” but had been “more difficult than originally anticipated”.

He adds that the deal with SinoPharm goes a long way to solving this issue, as the relationship as it allows Concepta to stock a pool of its product in the Chinese market, allowing distributors to dip in and out of the stock rather than making large orders upfront.

“The deal offers us greater flexibility in the Chinese market as stock will be readily available rather than having to be manufactured to order.”

“SinoPharm also brings the element of trust” said Henau, as it now had the backing of a large state-owned enterprise.

Concepta will launch in the UK once it has achieved a European standard CE mark, with Henau saying the company will have "products ready" to ship once the mark is awarded.

In addition to the UK and EU markets, the CE mark can also open doors for the company in another large market, India.

“India is a huge market…and currently the only requirements they have for registration is a CE mark,” Henau told Proactive.

Former AstraZeneca director on the board

There has also been movement within the company at board level, with the former global commercial director of FTSE 100 pharma giant AstraZeneca PLC (LON:AZN), Matthew Walls, joining the company as chairman in July.

Walls also has experience in the small-cap pharma & biotech space, having previously served as chief executive for molecular diagnostics and fellow AIM-listee Genedrive PLC (LON:GDR).

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