BATM Advanced Communications Ltd's (LON:BVC) shares rose on Monday after it signed an investment agreement to fund the development of a molecular diagnostics product by its joint venture, Ador Diagnostics.
The firm, which operates in the bio-medical and networking technology space, said the conditional investment would total up to US$30mln, with the initial US$14.5mln to be funded by the end of March and the remaining US$15.5mln to be funded by the end of 2020, subject to certain milestones being achieved.
WATCH: BATM's Zvi Marom outlines $30mln molecular diagnostics investment agreement
Ador itself is owned by BATM and medical equipment group Gamida for Life, both of which would provide US$4mln of the investment funds with the rest funded by what the company said were “leading” US medical investors as well as real estate investment group Puma Brandenburg Investments.
The investment is focused on the commercialisation of Ador’s first product, the NATlab reader, a rapid-results diagnostic system that is currently in final engineering ahead of in-hospital testing in the US and Europe.
BATM said it was intended that NATlab receive regulatory approval to enable commercialisation in 2020, while the investment itself would be used to build several systems with customers to test, develop, and certify tests for different diseases using NATlab, as well as for sales and marketing purposes.
Once the total investment is completed, BATM said it would own 30.2% of a new company, NewCo, which will own 100% of Ador.
Dr Zvi Marom, chief executive of BATM, said the investment reflected the “tremendous potential” of the molecular diagnostics solution and that the funding once completed would allow the commercialisation of NATlab to be accelerated.
In afternoon trading, BATM shares were 1.7% higher at 47.60p.
In a note to clients, analysts at ‘house’ broker Shore Capital said: “In our view, this announcement is further confirmation of the progress being made across BATM’s intellectual property portfolio as discussed at the company’s investor day last November.”
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