Yourgene Health plc

("Yourgene", the "Group" or the "Company")

Conditional disposal of Taiwan laboratory

Manchester, UK - 13 June 2023: Yourgene (AIM: YGEN), a leading international molecular diagnostic group, announces the conditional divestment of its Taiwanese subsidiary, Yourgene Health Taiwan Co Ltd ("Yourgene Health Taiwan"), to INEX Innovate Pte Ltd ("INEX" or the "Acquirer"), a Singapore based molecular diagnostics company focused on women's and fetal health for proceeds of up to $4m USD (approximately £3.2m) (the "Divestment").

As announced on 26 April 2022, given the challenges supporting, investing and growing the Taiwanese genomic service lab from the UK, the Yourgene Board decided to conduct an operational and strategic review of its Taiwanese operations. As a result of this review the Board decided to seek an acquirer for the Group's Taiwan-based business activities, whilst retaining ownership of its proprietary NIPT software, Sage^TM Prenatal Screening, which underpins its wider NIPT offerings in Asia-Pacific and elsewhere. 

The Divestment is conditional upon the Acquirer being granted Taiwanese Government approval for the planned acquisition as required for non-Taiwanese acquirers.  Yourgene will also need to complete a pre-Closing restructure to facilitate the transfer of retained people and assets to other Group companies. It is currently expected that these conditions will be satisfied within the next three months and that the Closing Date will occur before September 2023.

The Divestment will streamline the Group's operations, enabling Yourgene to focus its strategic efforts on expanding the core Asia-Pacific product-based activities whilst retaining a strong route to market in Taiwan and reduce the Group's ongoing expenditure by approximately £0.5m on an annualised basis. For the year ended 31 March 2023, on a post-restructure pro forma basis, Yourgene Health Taiwan had turnover of circa £2.0m and was profit breakeven. The proceeds from the Divestment will be used for general working capital purposes in the Asia-Pacific region and in the pursuit of the Group's strategic objectives.

Key terms of the Divestment include:

·    Upfront payment: US$1m payable on the Closing Date; plus

·    Loan agreement: US$1m payable as a lump sum or via ad hoc instalments within two years of the Closing Date (carrying interest at 7 per cent. above the Bank of England base rate) ("Loan Agreement"); plus

·    Earn-out consideration: up to US$2m potential earnout subject to the achievement of certain profit related milestones, over the next two calendar years post completion.

·    The Loan Agreement is secured against the shares of the subsidiary being sold such that failure to pay will result in ownership returning to Yourgene with no obligation to return previously received funds.

Upon the Closing Date, INEX will be appointed as Yourgene's NIPT distributor in Taiwan and Japan and will act as the Group's exclusive laboratory partner and service provider in Asia for an initial three-year term. INEX will also apply its expertise in diagnostic testing in Southeast Asia to grow the laboratory services business in its own fields of activity. There will be a transitional period of 12 months where the two companies will support each other operationally and administratively whilst separation of the two businesses takes place in an orderly manner.

Yourgene's Board member and Yourgene Health Taiwan's founder, Dr. Bill Chang will remain with the Group and on the Board of Directors. As part of the pre-Closing restructure, ownership of two non-trading subsidiaries of Yourgene Health Taiwan will be transferred to Dr. Bill Chang (the "Transfer") whilst their dissolution takes place, so as to remove a potential delaying factor from the Acquisition.  

The Transfer constitutes a related party transaction for the purposes of Rule 13 of the AIM Rules by virtue of Dr. Bill Chang being a Director of the Company and therefore is deemed to be a related party. The Directors independent of the Transfer consider, having consulted with Cairn Financial Advisers LLP, the Company's nominated adviser, that the terms of the Transfer are fair and reasonable in so far as the shareholders are concerned.

The disposal of the Yourgene Health's Taiwan Laboratory completes another step in Yourgene's multi-stage strategic plan which is intended to create focus on the Group's core products and geographies, prolong the available cash runway and rebuild shareholder value over time.

Lyn Rees, Chief Executive Officer of Yourgene, commented on the Divestment: "We look forward to developing a lasting relationship with INEX as they act as our exclusive laboratory partner and service provider across Asia. We will update shareholders once the completion of the transaction has occurred in due course."

This announcement contains inside information for the purposes of the UK Market Abuse Regulation.

The Directors of the Company take responsibility for this announcement.

About Yourgene Health

Yourgene Health is an international integrated technologies and services business, enabling the delivery of genomic medicine. The Group works in partnership with global leaders in DNA technology to advance diagnostic science.

Yourgene primarily develops, manufactures, and commercialises simple and accurate molecular diagnostic and screening solutions, for reproductive health and precision medicine. The Group's portfolio of in vitro diagnostic products includes non-invasive prenatal tests (NIPT) for Down's Syndrome and other genetic disorders, Cystic Fibrosis screening tests, invasive rapid aneuploidy tests and DPYD genotyping assays.

Building on our expertise in genomic technology, Yourgene's Ranger® Technology offers next generation size selection with a range of sample preparation platforms for dynamic target enrichment. Ranger® Technology can be utilised to improve workflows and performance in multiple applications including NIPT, oncology, infectious disease testing and gene synthesis.

Yourgene Genomic Services offers a clinical service from UK and Taiwan focusing on precision medicine and reproductive health, including NIPT.

Yourgene Health is headquartered in Manchester, UK with offices in Taipei (divestment pending), Singapore, the US and Canada, and is listed on the London Stock Exchange's AIM market under the ticker "YGEN".

For more information visit https://yourgenehealth.com/ and follow us on twitter @Yourgene_Health.

Forward-Looking Statements

Certain statements made in this announcement are forward-looking statements. These forward-looking statements are not historical facts but rather are based on the Company's current expectations, estimates, and projections about its industry; its beliefs; and assumptions. Words such as 'anticipates,' 'expects,' 'intends,' 'plans,' 'believes,' 'seeks,' 'estimates,' and similar expressions are intended to identify forward-looking statements. These statements are not guarantees of future performance and are subject to known and unknown risks, uncertainties, and other factors, some of which are beyond the Company's control, are difficult to predict, and could cause actual results to differ materially from those expressed or forecasted in the forward-looking statements. The Company cautions security holders and prospective security holders not to place undue reliance on these forward-looking statements, which reflect the view of the Company only as of the date of this announcement. The forward-looking statements made in this announcement relate only to events as of the date on which the statements are made. The Company will not undertake any obligation to release publicly any revisions or updates to these forward-looking statements to reflect events, circumstances, or unanticipated events occurring after the date of this announcement except as required by law or by any appropriate regulatory authority.