SINGAPORE (Feb 18): iX Biopharma is selling Chemical Analysis, its laboratory testing business in Australia, to Eurofins Australia New Zealand Holding for A$12.5 million ($12 million).  

The consideration is about $10.6 million and $10.84 million over the book value and its net tangible asset value (NTA) of the sale shares, and translates to a net gain on disposal of about $10.4 million.

This comes after the group saw its 2Q losses widen 11% to $3.6 million after registering lower revenue from its chemical analysis division, from which iX Biopharma prioritised and allocated substantial resources to prepare for the nationwide launch of its Entity product range in 4Q19.

In a Monday filing, iX Biopharma says it believes the disposal, which is made on a value-optimised basis, will be in the interest of its shareholders as it expects intensifying competition within Australia’s chemical analysis and testing sector within the next 12 months.

The way the group sees it, opportunities for further development of Chemical Analysis are limited, while maintaining the company’s competitive position and continued growth will require additional capital investments and human resources.

With the sale of Chemical Analysis, the group intends to focus its attention and financial resources to manage its core business – which is the development and commercialisation of innovative therapies to address areas of unmet health needs, and not the non-core, ancillary business of laboratory testing.

The sale is also especially in light of the strides made by iX Biopharma in progressing its pharmaceutical and nutraceutical businesses in the past year, adds the group.

Shares in iX Biopharma closed 1 cent lower at 21 cents on Friday.