15th Nov 2006 09:08
Medical Solutions PLC15 November 2006 Medical Solutions plc (the "Company" or "Medical Solutions") Disposal of the Dubai based business of the Company and future strategy for the business Completion of the sale of Medical Solutions FZ LLC ("Dubai MedSol") Medical Solutions, the provider of pathology and cytology services and productsto the healthcare and pharmaceuticals sectors, today announces that it hascompleted the sale of 100% of the issued share capital in Dubai MedSol, itsDubai-based pathology business for gross consideration of £16.4 million beforeexpenses. Future strategy for the business Following a further review of its future strategy conducted in early November,the Board has reconfirmed the broad principles outlined to shareholderspreviously and is now in a position to expand on its strategy in certain keyareas. The Company intends to become a leading provider of laboratory medicine servicesto the healthcare and pharmaceutical/biotechnology sectors. The Board seessignificant potential to continue to grow its core business streams in pathologyand cytology through the addition of new products and the continued roll-out ofits liquid-based cytology business. In addition to this, the Board hasidentified three highly significant market opportunities upon which it believesthe Company is well positioned to capitalise. Automated cervical screening The Directors believe that the market for automated cervical screening inEngland and Wales could be worth an estimated £80-£100 million per annum. TheCompany is currently co-sponsoring two trials in England aimed at demonstratingthe reliability and accuracy of this technology. It also expects to start athird trial in Wales in the near future. The opportunity in Wales is significantfor the Company as the timeline for this trial is expected to be much shorterthan the main trial in England, which is currently expected to complete in 2008.In order to maximise its growth potential in this area, the Company intend tooffer an automated cervical screening service in partnership with the NHS. Expansion of diagnostic pathology capabilities Over the short to medium term, Medical Solutions expects to broaden the range ofits pathology service offerings both within histopathology and in other areas ofpathology services. The Board believes that a wider portfolio of pathologyservice offerings will be important for the long-term success of the Company andit is currently exploring different means by which it could offer such servicesto UK healthcare organisations, including the NHS, private healthcare and otherpotential customers in the pharmaceutical and biotechnology industries. Optionscurrently under evaluation include internal investment, strategic alliances and/or acquisition. Early stage discussions over strategic alliances are alreadyunderway with a number of potential partners. The Directors believe this marketto be worth in excess of £2 billion per annum. Molecular diagnostics The Board sees significant potential in the area of molecular diagnostics, amarket which is expected to be worth approximately £440 million by 2011, andregards entry into this area as a natural addition to the Company's referencelaboratory capability. At this stage in its development, however, MedicalSolutions does not intend to develop proprietary tests of its own but would lookto act as the "partner of choice" for other groups so as to maximise thepotential of such molecular diagnostic products within the UK, and, potentially,European markets. Early stage discussions are also underway in this area. In conjunction with its plans to grow the business organically, the Boardintends to take a proactive approach to opportunities to growing the business bythe acquisition of suitable complementary businesses. Sir Gareth Roberts, Chairman of Medical Solutions said, "We are delighted to have completed the sale of Medical Solutions FZ. Thistransaction will provide substantial funds and allow us to take advantage of thesignificant market opportunities available to grow our business and realise ourvision to become one of the leading providers of laboratory medicine to thehealthcare and pharmaceutical sectors. We have a clear growth strategy and Ibelieve we are now exceptionally well positioned to capitalise upon theseopportunities." Enquiries: Medical Solutions plcNeil Johnston, Chief Executive Officer 0115 973 9010Nick Ash, Chief Financial Officer 0115 973 9010 Bell Pottinger Corporate & FinancialGeoff Callow/Chris Hamilton 020 7861 3232 Nomura Code Securities LimitedRichard Potts 020 7776 1200 This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
SBS.L