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Epistem Holdings signs landmark deal with medical fund

Agreement marks first investment by the fund, GHIF, which willl help Epistem launch its Gendrive platfrom in the world's poorest countries.

Epistem (LON:EHP) has agreed a landmark collaboration and funding deal with the Global Health Investment Fund to help launch its tuberculosis diagnostic platform in the world’s poorest countries.

Under the agreement, GHIF will lend Epistem US$8mln via a five-year convertible bond on favourable interest and conversion terms and support and facilitate the introduction, distribution and sale of the Genedrive platform around the world.

For its part, Epistem has agreed to make the platform affordable for patients in low- and middle-income countries.

Genedrive is a handheld tool that can diagnose TB within 30 minutes and that has been predicted to revolutionise the diagnosis of the disease in the third world.

Trials are currently ongoing in five countries, including India and Nigeria, after which regulatory submissions will be filed ahead of a global access and roll-out of the TB test.

GHIF, an investment fund set up to fund treatments for diseases associated with the poorest countries, such as tuberculosis, malaria, HIV/Aids and infant mortality, has agreed a conversion price of 489p on the bond, more than 50% higher than yesterday’s share price close, while the coupon is 5%.

According to GHIF, nearly 10mln cases of tuberculosis are reported annually resulting in approximately 1mln premature deaths each year.

Christopher Egerton-Warburton of GHIF said: “Epistem has sought to improve this situation with its Genedrive platform and as a result the GHIF is delighted to make this our first investment."

Matthew Walls, Epistem’s chief executive, added: "The support of the GHIF represents a very powerful endorsement of our strategy of developing Genedrive for infectious disease applications and our decision to target the tuberculosis market with our first assay.

“We are very excited about the potential of the GHIF's global network to financially support and commercially advance the roll-out of the Genedrive unit and our menu of new molecular diagnostic tests for 'Point of Care' application in low resource settings."

Separately, Epistem issued a trading update predicting underlying [EBITDA] losses of around £2.5mln this year reflecting the expenditure ahead of the launch of Genedrive. Net cash at 30 June was £4.2mln.

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