Collagen Solutions, the manufacturer of biomaterials for the medical sector, has flagged its expectation of a 13 per cent rise in income for the current year, boosted by new development agreements.

The Glasgow-based firm said revenue and other income is expected to be £2.1 million for the six months to September 2018, up from £1.86m the previous year.

It said that revenue performance has been buoyed by new development agreements closed in the first quarter of this financial year, which were described as "more than offsetting" previously announced delays in customer projects and inventory adjustments.

The company said in a statement that its development business will comprise nearly half of its overall business this financial year.

New customer acquisition continues with nine new deals in place, representing an increase in the number of new customers over the same period last year when it was eight.

The average expected value of those customer acquisitions also increased, Collagen said.

The firm said that its tissue business unit has several pending agreements, which typically take three to six months to negotiate, with supply agreements expected to follow within a further twelve to eighteen months.

Collagen, which was initially formed as part of Glasgow sausage skin maker Devro in 2008, develops, manufactures and supplies medical grade biomaterials for research, medical devices and regenerative medicine.

Shares in the collagen-based biotechnology specialist have been gradually climbing this year - and held firm with no change at 3.1p on Tuesday - as its growth prospects in China were bolstered after it struck a distribution agreement double with two firms in the emerging market.

Collagen's move to restructure its operations and secure export licences for China earlier this year paved the way for the distribution deals which included one with Dakewe Biotech Co.

The Shenzen-based company will distribute Collagen's products to the research market and sell into the medical device industry.

The second agreement was with Shanghai Regenic Biomedical, which also distributes collagen-based products to the Chinese medical device and regenerative medicine sectors.

Jamal Rushdy, Collagen Solutions chief executive, said: "We remain on track to meet our key initiatives for the year including achieving our commercial execution plans and financial performance objectives in line with market expectations.

"We are also continuing our planned rolling submission of data to support our goal of obtaining the CE Mark for ChondroMimetic this financial year.

“We are in negotiations with multiple distributors which we expect to conclude ahead of the limited user release planned to follow."

ChondroMimetic is the company's collagen-based implant for the treatment of small cartilage and underlying bone defects.

Mr Rushdy said: "Operationally, our New Zealand restructuring initiative is delivering the expected synergies and benefits according to plan and the New Zealand team is now fully focused on the tissue business and we are pleased with our progress so far."

The firm said earlier this year that "as well as positioning the New Zealand operations for significant growth over the medium term the proposed restructuring will enable the existing collagen production to be consolidated into Glasgow and for our current disparate R&D resource to be more focused".

The annual cash cost saving from the restructuring was estimated to be £200,000 with one-off cash cost estimated to be £150,000.

Mr Rushdy declared that the company "will continue to deliver more visibility and metrics to our investors relating to the value and progress within our core business".