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- Medlab Clinical (MDC) sells the Australian-only part of its nutraceutical business to well-established Aussie health and wellness company PharmaCare
- The nutraceutical assets, which have reportedly been an ongoing concern for shareholders, are being sold for $1.6 million in cash
- Medlab says the distribution costs were too high and PharmaCare is more capable and has the right resources and infrastructure to grow the business
- Moving forward, Medlab will restructure business to focus on its NanaBis and NanoCelle products
- Company shares are up 6.45 per cent to trade at 16.5 cents
Medlab Clinical (MDC) has sold the Australian-only part of its nutraceutical business to PharmaCare.
PharmaCare, a well-established Australian health and wellness company, will buy the business for $1.6 million in cash on November 1.
The sale includes all nutraceutical assets except for certain Medlab intellectual property assets that will be provided as an ongoing licence to PharmaCare for the Australian territory.
Medlab chose to sell the business as the cost of distribution was high which the company said is inevitable to effectively participate in the area.
PharmaCare was attracted to the Australian nutraceutical asset as it does have the means, including the required infrastructure and capability, to take advantage of the business and grow in a subchannel that it doesn’t currently participate.
Positively for MDC, the sale will enable it to save around $2 million per year on operating expenses.
It will however keep the ownership of its research and development and both companies have agreed to work together on future product development. This provides ongoing innovation for PharmaCare and an ongoing stream of income for Medlab.
Moving forward, Medlab will restructure its business to focus on its NanaBis and NanoCelle products and emerging commercial partnership opportunities after having gained patents in 48 markets worldwide.
Executive Director Laurence McAllister commented on the sale.
“This really sharpens our focus and frees up our senior team to focus on developing our core asset NanaBis and NanoCelle technology,” he said.
“This nutraceutical business has been an ongoing concern for many shareholders. We are a biotech, however we will consider commercialising healthcare opportunities that can support our revenues for clinical studies and global partnering.”
Company shares were up 6.45 per cent to trade at 16.5 cents at 3:10 pm AEDT.
