The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the UK version of the retained EU law Market Abuse Regulations (EU) No. 596/2014 ("MAR"). With the publication of this announcement via a Regulatory Information Service, this inside information is now considered to be in the public domain.

Joint Venture established to accelerate the growth of Prolong

InnovaDerma (LSE: IDP), a leading digitally focused UK beauty brand developer, is pleased to announce it has signed a joint venture agreement with M. Ward, a Non-Executive Director of the Company, to accelerate and develop the Prolong brand.

Ergon Medical Limited, a subsidiary of InnovaDerma, is a private limited company registered in the England. Pursuant to the joint venture agreement, (the "Joint Venture"), InnovaDerma will retain a 45% ownership stake in the Joint Venture, with the remaining 55% being acquired by M. Ward for a value of £275,000. The transaction completed 3^rd December 2021.

As previously announced, the Board, following a strategic review, concluded that while Prolong, the world's only FDA-cleared medical device for premature ejaculation, has strong growth potential, it requires significant operational and financial investment and has limited synergies with the Company's topical portfolio. Therefore, the objective of the Joint Venture is to accelerate the marketing and sales of the Prolong medical device and enable the Company to focus on its topical products. The Company will not be required to invest in Prolong's development as part of the Joint Venture nor will there be operational use of executive management's time.

M. Ward has a proven track record in successfully growing businesses and has significant experience in the digital, technology and consumer industries. He founded Hunter Macdonald, a digital transformation and services company in 2013 and under his leadership, the business employed more than 400 employees within 5 years.  In respect of the Joint Venture, Mark has assembled a team of professionals with deep sector expertise within the digital marketing, healthcare and medical regulatory sectors. 

The Joint Venture will focus on rapidly increasing sales of the Prolong Device with the objective of creating a sizeable business. It is the Board's intention to review an exit strategy, which may include a trade sale or an IPO, to maximise shareholder value after a period of three to five years.

Blake Hughes, CEO commented:

"Over the past 12 months, we have focussed on simplifying InnovaDerma to ensure it will deliver sustainable and profitable growth. The Joint Venture is another important step towards this objective, enabling us to focus on our core topical business while also seeking to create value from Prolong, which we believe to be an exciting product that can transform and improve relationships. Our Joint Venture partner has both the skills and funding to rapidly accelerate sales of Prolong and thereby maximise value for our shareholders."

M Ward, Non-executive Director commented:

"Dr Zamar, a leading Harley Street consultant psychiatrist, invented the Prolong device to help cure men affected by premature ejaculation. It is the only FDA cleared device available on the market and it has the potential to help millions globally who suffer from the condition. We have brought together a team of experts who have the skills required to significantly increase sales of Prolong whilst ensuring as many people as possible benefit from it. These experts range from former Googlers who are recognised experts in digital marketing, through to senior healthcare professionals with significant experience within the regulated medical device sector."

M Ward continued, "Prolong has great potential however has really suffered from a lack of focus and investment since InnovaDerma acquired it during 2017. That changes today. Within the next 30 days, we will launch a brand-new SEO enabled website with a fresh design direction, we will ensure this design direction is replicated across all of our digital channels and we will also launch an aggressive digital marketing campaign. In parallel to this, my device team will be working hard to ensure we gain the necessary regulatory approvals to sell the Prolong Device into key markets such as the UK and Europe.  I strongly believe that with the right level of investment and the right team, we can create significant shareholder value for InnovaDerma. I look forward to keeping you updated."

Related Party Transaction

For the purposes of DTR 7.3, the entry by the Company into the Joint Venture with M Ward, a person with control or significant influence over the Company, constitutes a material related party transaction. The independent directors of the Company, being Ross Andrews, Simon Pyper, Blake Hughes and Andrew Dunderdale have approved the terms of the Joint Venture agreement and consider the arrangement to be fair and reasonable from the perspective of IDP and the shareholders who are not related parties.

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