KUALA LUMPUR: Hong Seng Consolidated Bhd’s wholly-owned subsidiary, HS Bio Sdn Bhd (HS Bio) has entered into a share sale agreement to acquire a 51 per cent stake in the COVID-19 antibody test kit distributor RZAC Immunesafe Sdn Bhd for RM20 million.

       In a statement today, Hong Seng said the total purchase consideration of RM20 million comprises a cash payment of RM2 million and the issuance of 37,800 new ordinary shares in HS Bio worth RM18 million.

       RZAC is currently the sole distributor of the Immusafe COVID+ Biochip, a comprehensive neutralising antibody test kit that has been approved for use by the Medical Device Authority (MDA).

       "More importantly, Immusafe COVID+ Biochip has an accuracy of 100 per cent, as validated by the Institute of Medical Research (IMR), and higher sensitivity of 100 per cent compared with other antibody tests currently in the market which are less comprehensive and mostly single-antigen antibody tests,” it said.

       RZAC is also the strategic collaborative partner of the Malaysia Automotive Robotics and IoT Institute (MARii), and IMR, which are jointly spearheading the Immusafe COVID+ Biochip testing through Neogenix Laboratoire Sdn Bhd (a 60 per cent owned subsidiary of HS Bio) for the purposes of conducting neutralising antibody testing on the population.

       According to a bourse filing on Friday, both parties will deliver a guaranteed profit after taxation of RM40 million within a period of 12 months beginning from Oct 1, 2021.

       The profit guarantee provided by both parties is in view of RZAC’s secured orders and commitments from both the private and public sectors.

       The company expects to supply Biochip test kits generating an estimated revenue of up to RM250 million, in addition to its future prospects of Malaysia achieving a national herd community whereby antibody tests will play the next important role by assisting the gradual opening of the economy and borders.

       Hong Seng executive director and HS Bio director Christopher Chan said the acquisition is part of the company’s continuous initiatives to drive its healthcare business forward and enable the company to have exclusive distribution rights of the Immusafe COVID+ Biochip.

       "In view of the positive outlook for healthcare and COVID-19 antibody test markets, coupled with the advantages of the Biochip test kit, the acquisition will definitely complement the group’s healthcare-related business by leveraging on the capabilities of HS Bio’s existing network.

       "Therefore, HS Bio is confident it will continue to expand its dominance in the lucrative healthcare industry while the proposed acquisition with profit guarantee shall contribute positively to the group’s future earnings and financial position,” he said. - Bernama