RUA Life Sciences (AIM:RUA) has completed the spinout of RUA Structural Heart and the financing of its novel surgical mitral valve programme with a £3m issue of convertible unsecured loan stock (CULS) to the Leducq Foundation and the conversion of £4.8m of intercompany debt into pari passu CULS.
The funding will be used to complete valve design optimisation, durability and fatigue testing, animal studies, prepare for initiation of a first-in-human clinical study and recruit the team to take the programme to the clinic.
On completion RUA Life Sciences retains 100% of RUA Structural Heart equity but the company says that following conversion of the Leducq and RUA CULS and a management incentive strip its holding is not expected to fall below 62% immediately before the next equity round.
The investor is the Leducq organisation, supported by Broadview Ventures, and RSH’s initial board will include CEO William Brown, RLS appointee John Ely, investor appointee Andy Campbell and David Prim for Leducq.
RUA will deconsolidate RSH, recognise a non‑cash accounting gain of approximately £4.9m and says eliminating RSH operating costs and recognising CULS PIK interest will have a positive annual impact of around £750,000.
"The revised governance structure enables RUA Life Sciences to report RUA Structural Heart as an investment, resulting in a strengthened balance sheet and improved ongoing profitability profile for the Group," William Brown said.
RSH will use the proceeds to advance the programme towards first‑in‑human evaluation and will provide further updates as it progresses.
