Cellmid Ltd (ASX:CDY) wholly-owned subsidiary Advangen International Pty Ltd has entered into an agreement with television's Australian Shopping Network (ASN) for the sale of évolis® Professional anti-ageing hair care products.
The products are expected to be sold on openshop from the last week of October 2019 with value offerings exclusive to ASN, which is one of only two 24/7 shopping channels in Australia.
ASN’s openshop is a new, 24/7 shopping experience on channel 75 and is the result of a broadcast agreement between Channel 7 and ASN.
Advangen’s évolis® Professional products will be the only anti-ageing hair brand offered on the channel.
TV shopping major revenue source
Television shopping is the most significant revenue source for Cellmid with sales from QVC Japan alone representing close to 30% of total consumer health revenues.
Since beginning sales on TV shopping channel QVC four years ago, Cellmid’s FGF5 inhibitor products became best-sellers with two ‘million dollar’ sales days annually.
The company’s most recent TSV show on QVC Japan delivered a record $1.14 million in wholesale revenue and products have already been ordered by QVC for the next TSV event on November 24, 2019.
Cellmid is also negotiating the launch of a new product range on QVC Japan, taking advantage of the brand loyalty built by its FGF5 inhibitors over the past four years.
Ideal medium for évolis®
The company believes TV shopping is an ideal medium to sell the évolis® products as it allows for detailed explanation of the novel FGF5 technology.
This medium allows for the long-term results of using the products to be represented visually and there is opportunity to build an intimate relationship with the audience.
TV shopping is also a cost-effective channel for a fast-growing company, such as Cellmid, as airtime is not charged and there are no additional marketing costs, rebates or discounts payable to the channel.
TV shopping platforms are rewarded with attractive wholesale margins in return.
Placement raises $1.5 million
Cellmid has also raised $1.5 million through a share placement to sophisticated and institutional investors in the issue of 7.5 million fully paid ordinary shares at 20 cents each.
The company will also provide the opportunity to existing shareholders to participate through a share purchase plan (SPP) targeting an additional $500,000 on the same terms as the placement.
Of the total shares issued, around 41% will be issued to company directors Dennis Eck and Maria Halasz, subject to shareholders’ approval.
"Increasing demand for products"
Chief executive officer Maria Halasz said: “The funding will allow us to fulfil the increasing demand for our products internationally.
“We remain confident that our consumer health division is on track to achieve operational profitability in FY2020, as we prepare to deliver value from our midkine assets through partnerships.”
XEC Partners acted as lead manager for the capital raising.