Creditors of Brisbane-based infectious disease testing products developer Ellume have agreed to a US$38 million ($57 million) deal that will see the business, known for its rapid COVID-19 test, enter the hands of competitor Hough Consolidated.
The funds will be paid to creditors and noteholders after a vote in favour of the Deed of Company Arrangement (DOCA) yesterday with Hough Consolidated, a market-leading supplier of tests to a variety of retailers in Australia including supermarkets, convenience stores and pharmacies.
Under the deal, larger noteholders can elect to roll their notes and remain invested in the business.
"We have developed a proposal and business plan that will capitalise on the synergies between Hough and Ellume," said the acquirer's CEO Jackson Hough.
"Our plan includes continued manufacturing in Australia and the United States."
The Hough offer also provides for a substantial line of credit to fund the further development of the business.
In addition to the existing its US Food and Drug Administration (FDA) approved approved Ellume COVID-19 Home Test and a QuantiFERON TB test it produces in conjunction with Qiagen, Hough intends to rapidly expand Ellume’s products and secure approvals in both Australia and the United States for multiple diagnostics platforms across both the self-test and point-of-care markets.
Hough and its related entities operate a diagnostics business that distributes ARTG (Australian Register of Therapeutic Goods) listed rapid antigen tests to both the point-of-care and self-test markets.
In March 2023, Hough will launch the first range of self-test rapid diagnostics to be available in supermarkets and pharmacies nationally, creating a new category of products based on its experience with COVID-19 rapid tests.
The initial range of six tests will be expanded to more than 10 different diagnostics covering women’s health, male fertility, and sexually transmitted diseases by the end of 2023.
Like Ellume, Hough grew rapidly following the advent of COVID-19.
“The team at Hough believe the opportunity now is for rapid diagnostics to move beyond COVID-19, as a cheaper and faster tool for disease screening across the Australian and global health landscape," the company's CEO said.
“From at-home testing for common conditions to point of care screening for life-threatening respiratory diseases, rare cancers, heart disease and auto-immune disorders, rapid diagnostics have the power to increase early diagnosis, deliver faster treatment and better health outcomes.
"Globally, the growth of rapid screening programs for HIV, Tuberculosis, Malaria, Dengue Fever, and Hepatitis B/C can improve the lives of billions of people over the next decade."
Ellume itself was founded by Dr Sean Parsons who witnessed firsthand the problems of slow diagnoses during the 2009 swine flu pandemic, and over the course of a decade developed fluorescent immunoassay technology that can generate results in the space of 15 minutes for a range of diseases.
The underlying technology allowed Ellume to rapidly pivot during the pandemic, securing a high-profile contract to support the US COVID-19 testing effort and the establishment of a 20,000-square-metre facility in the US state of Maryland. Despite the enthusiasm on the other side of the Pacific, Ellume's self-tests are still not approved for use in Australia.
Ellume's success in the lead-up to FDA approval and securing US contracts led to him being crowned Brisbane Young Entrepreneur of the Year 2020.
Jackson Hough said now was an exciting phase in the development life cycle of diagnostics that will "change the way Australians engage with their health and the health of their family".
"The partnership between Ellume and Hough will see Australian know-how and research lead the way," he said.
Hough expects to formally enter the Deed of Company arrangement at the end of the week and, subject to the meeting of the conditions’ precedent, settle the transaction in mid-March 2023.
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