Shares of Collagen Solutions PLC (LON: COS) have slumped on Tuesday afternoon after the firm gave shareholders a disappointing update.
Collagen Solutions specializes in producing custom formulations of medical-grade collagen biomaterials and tissues for use in medical devices in collaboration with our customers. We also develop our own proprietary collagen-based medical device technologies for use in regenerative medicine.
Shares of Collagen Solutions slumped 6.97% following the modest announcement, to trade at 3p. 3/12/19 13:35BST.
The firm saw its shares in green back in October, after it saw consistent periods of revenue growth which sparked shareholder enthusiasm.
The progress was further boosted by a fundraiser held in June, which added £6 million investment before fees applied. These funds allowed Collagen to further product development, manufacturing capacity and repay a financial debt to healthcare investor Norgine Ventures Management Ltd.
Today, the firm reported that it had seen a wider loss in the first half of its financial year. The firm alluded to higher marketing costs tied in with as well as amortisation & depreciation.
For the six months ended September 30, the biomaterials and regenerative medicines firm posted a £1.2 million pretax loss, widened from £1.1 million the year before.
Although revenue increased 16% to £2.2 million from £1.9 million, this was offset by a 14% increase in selling & marketing costs to £562,313 from £491,324 and a rise in amortisation & depreciation of 47% to £352,086 from £238,981.
During this period, Collagen said that it had invested into further resources and this has benefited the quality of its products.
The second half will involve “delivery of additional technical capacity and space” to enable the firm to meet its anticipated financial 2021 demand both from its existing and from new supply customers, as well as to fulfill manufacturing contracts.
Chief Executive Jamal Rushdy said: “As we previously announced, we are pleased to report the third consecutive six-month period of double-digit sales growth. We have shown particularly strong growth from our tissue business and also are continuing to bring on new customers and contracts from our global sales team. Our product development teams remain focused on development projects for customers, providing a solid platform for future contract manufacturing business. Finally, we are investing in our manufacturing capacity to ensure we can continue to support future growth and we look forward to a successful remainder of the year.”
