- Carclo's board has decided to discontinue its investment in Carclo Diagnostics Solutions, currently around GBP1.5 million per annum following a strategic review.

The carrying value of the intangible assets relating to CDS held on the group's balance sheet - around GBP4.9 million - will be fully impaired in the financial statements for the year ended 31 March. This non-cash impairment cost will be disclosed as an exceptional write down in these financial statements.

The board expects to incur an eventual closure expense of c.GBP1.0 million, being a combination of non-cash and cash costs during the year ending 31 March 2017. The group intends to absorb the CDS Intellectual Property Rights within the Technical Plastics Division whilst it explores options to sell or license these Rights should appropriate parties be identified.

Carclo announced on 12 April that it had started discussions with potential commercial partners and appointed advisers to engage with more strategic collaborators regarding the optimal way to develop the opportunities within CDS.

The board considered the feedback from these parties would be pivotal in concluding the appropriate strategy for the CDS business and optimising shareholder value.

The company said the review process explored a wide range of potential strategic options, including commercial partnerships, co-investments or divestment, with a diverse range of potential parties. In addition the board has investigated all other appropriate funding options for an independent CDS business outside of the Carclo Group.

The key feedback pointed to the need to develop a wider range of assays which would require an increasing level of future investment and concerns around the cost to and timings of market take up and, consequently, the certainty of future commercialisation.

The review did not identify a credible strategic option to take CDS forward or new investors.

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