(MENAFN- ProactiveInvestors - UK)
WideCells made a premium debut on AIM today, raising 2mln in the process, which will fund its foray into a niche (but potentially very lucrative) area of healthcare insurance.
Listed at 11p, the stock traded as high as 13p, before dropping back to 11.75p in afternoon trade. The business is valued at a modest 6mln giving plenty of headroom for growth if the model takes off.
Founded and run by Joao Andrade, the company has created a product called CellPlan.
It is aimed at the 3mln parents worldwide that refrigerate stem cells from their child's umbilical cord.
They do so for a cost of 2,000 (for 25-30 years) knowing the material provides a potentially life-saving treatment for 82 blood-borne diseases, including leukaemia and lymphoma.
What is never discussed is the costs of treatment which can top 300,000. In other words the outlay prohibits many of these folks from actually gleaning a benefit from their foresight.
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CellPlan, which costs around 150 a year, provides US$1mln of cover, which includes all the incidentals, such as travel and accommodation to specialist treatment centres around the world.
'We are resolving a major problem in the stem cell industry, in particular for a segment called the core blood banking industry,' chief executive Andrade told Proactive Investors.
'People pay 2,000 to store stem cells to protect the family against future illness. What they don't realise is just how much it costs to have the treatment. It's something they simply can't afford.
'Nobody is providing an insurance or medical opinion service.'
The claims handling and ancillary requirements, such as medevac services, are being outsourced by WideCells.
The company itself will be responsible for making sure the core blood banks it deals with operate to the highest international standards.
In all, there are 500 of these banks dotted around the world; however, the top ten banks store around half the samples.
The plan is to team up with major centres and WideCells has already signed agreements with two.
Even capturing a modest tranche of the market, say in low single digits, would deliver a supremely cash generative and profitable business.
The 2mln raised will be used for marketing and to set up a stem storage facility in Manchester.
According to sources, there was plenty of interest in WideCells' unique story, meaning the IPO was oversubscribed.
Among the shareholders who came on board at float was Miton Group, which stumped up 500,000.
Miton is run by Gervais Williams, who has an impressive track record in picking winners in the small-cap arena. Analysts said his investment is a significant endorsement of the company and its prospects.
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