Life sciences firm Collagen Solutions flags revenue hike

● Losses expected to be lower than previously forecast ● Glasgow group says it is ‘moving up the value chain’

Collagen Solutions, the Glasgow-based life sciences firm, is forecasting a double-digit hike in revenues and narrowerthan-expected losses, marking a “substantial” turnaround in its financial fortunes.

In a trading update, the group said revenue for the full year was expected to be ahead of market expectations at £4.15 million, reflecting yearon-year growth of 18 per cent.

Revenue from agreements to develop collagen products on behalf of third parties continued to contribute significantly to the business in the second half, the firm noted, and will make up about a third of its revenues for the year to the end of March.

The company said that it expected to post a lower-thananticipated loss before tax due to the improved top line as well as the sale of its holding in Jellagen, a marine biotechnology company.

The firm continues to await feedback regarding the status of the CE mark for Chondromimetic. In preparation for the approval, and as previously announced, Collagen has put in place several distribution partners in “select countries” in Europe and Asia in anticipation of this.

The group also flagged a better-than-expected cash balance of £1.7m for the yearend, though that is markedly down on the £5m recorded 12 months earlier.

Since the year-end, the business has been trading in line with management expectations, Collagen noted, supported by the new business gained in the second half of the last financial year and current pipeline of deals in process.

Chief executive Jamal Rushdy said: “We are pleased with our delivery of high doubledigit growth within our core business representing a substantial turnaround of performance from our prior financial year.

“In addition, our increased mix of development services is a positive leading indicator of success in our strategy to move up the value chain. We look forward to providing a further update when we announce our preliminary results in July.”

In February, the group revealed that it had sold its stake in Jellagen for some £215,000.

Jellagen, which was founded in 2013, focuses on developing collagen biomaterials from jellyfish. Collagen had held a minority stake in the firm since 2014 and also collaborated on technology development. The transaction to sell Collagen’s holding followed the most recent investment round in Jellagen in which the life sciences company did not participate.

In December, Collagen Solutions trimmed its half-year losses after reporting a jump in US sales.

Rushdy said the firm remained on track to meet its key initiatives after pre-tax losses were cut to £1.06m from £1.38m a year earlier.