Life sciences firm warns of heavier losses

Scottish life sciences firm Collagen Solutions yesterday warned that full-year losses will be higher than forecast after delays over contract talks with a new customer.

The Glasgow-based company, which specialises in medical grade collagen and tissue components, said revenues had been “materially impacted” by discussions with the customer not reaching agreement by the end of the financial year.

Together with the impact of other customer delays already flagged, it said revenues for the year to 31 March will fall to £3.5 million from £3.9m last year.

Losses for the full year will be more than expected both due to the lower sales and also costs related to the plans announced last week to restructure its New Zealand operations and move production to Glasgow.

Chief executive Jamal Rushdy said that although the firm had suffered “protracted sales cycles” across several parts of the business, the size of the contracts under negotiation was promising.

Collagen Solutions chairman David Evans admitted the announcement was “clearly disappointing” but added: “Our backlog of commercial discussions remains healthy and the aim remains to build upon the size and nature of the contracts we secured in the second-half of the year.”

The company said its plans to restructure its New Zealand operations should lead to annual cost savings of around £200,000 with one-off costs estimated to be £150,000. The plans are subject to an employee consultation process. 0 ‘Protracted sales cycles’ – CEO Jamal Rushdy