REG - Creo Medical Group - FY 2022 Trading Update

Creo MedicalAnnouncement

11/01/2023 07:00

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RNS Number : 3233M  Creo Medical Group PLC  11 January 2023

Creo Medical Group plc

("Creo" the "Company" or the "Group")

 

FY 2022 Trading Update

 

Revenues and EBITDA in-line with market expectations

 

Strong growth and accelerating momentum in core electrosurgical products with
more cases, users and trainers delivering excellent clinical outcomes

 

First revenues received through the Kamaptive programme with first in-human
robotic procedure expected 2023

 

Creo Medical Group plc (AIM: CREO), the medical device company focused on the
emerging field of minimally invasive surgical endoscopy for pre-cancer and
cancer patients, provides a trading update for the year ended 31 December
2022, including an overview of its commercial and clinical progress.

 

Further progress in commercialisation of core advanced energy electrosurgical
products, translating into scaling revenues across multiple business revenue
streams

 

In FY 2022, sales in Creo's core electrosurgical products and technology
during the period, including Kamaptive licensing revenues, increased eight
times over FY 2021 (from £0.3m to £2.3m) and over 60% in the second half vs
H1 2022. Sales of Speedboat Inject and the CROMA Advanced Energy platform have
grown threefold with 45% growth in the second half vs H1 2022.

 

FY 2022 was the first full year following the lifting of most global pandemic
restrictions, and the benefits of their removal for the Company's sales
operations and the roll-out of core Creo products have been a key driver of
progress over the year. The launch of the Kamaptive license and partnering
brand, and the signing of the Group's first two deals in 2022, generated first
sales for this business revenue stream. These key drivers provide a positive
trend and outlook going into 2023.

 

With the steady and profitable revenue coming in through the European
consumables business, providing the anticipated foundation for integrating
sales of the core Creo products across this network of existing customers, the
growth in core Creo Technology revenue accounts for all the c. 7% overall
growth in Group revenues during the year, which is in-line with market
expectations and the original business plan set out at IPO.

 

The Board believes that the Group's core technology, protected by a
significant patent portfolio, is now entering a phase of accelerated growth as
the Group continues to commercialise its suite of products. The Creo
consumables business continues to deliver steady and profitable revenues, and
the launch of Creo's consumable range in the US provides further opportunities
from cross-selling to support the roll-out of core electrosurgical products in
that key market.

 

Expansion and momentum in our clinician education programme

The Company launched the Pioneer clinical training programme in 2022 which
is recognised in the industry as class leading. The Pioneer programme sits
at the heart of the sales process tracking doctors engaged with the business
to join the programme. The Company tracks all customers through this five-step
process, from engagement, through to purchasing of equipment, training and
mentoring, before becoming users. During FY 2022, the number of physicians in
the process doubled to more than 450 by Dec 2022. With 60 doctors trained in
H1 and 90 during H2, this resulted in 80 confirmed users at Dec 22, a fourfold
increase from the start of the period and in-line with the Board's
expectations, and leaving a wider cohort of engaged clinicians which the Group
will work to convert to regular users in H1 2023.

 

Given the number of physicians training and mentoring other doctors is
increasing all the time, this pipeline provides clarity and predictability
over the coming year and will be enhanced by new product launches anticipated
during the year.

 

The business is focussed is on the quality of training, mentoring and then
increasing utilisation, with every case performed by a user having both a
positive impact for the patient and providing revenue on a per case basis for
the business.

 

Continued new product innovation

 

Creo launched its upgraded Speedboat Slim device to the market in November
2022. This provides clinicians with the benefits of Speedboat Inject, but with
a slimmer profile that enables it to be delivered via the working channel of
most major endoscopes used by medical practitioners around the world,
expanding the Company's market opportunity further. It is also compatible with
paediatric endoscopes, for both lower and upper GI indications, and Speedboat
Slim has already demonstrated highly positive clinical outcomes, with
excellent feedback from all users. The Company has seen increasing adoption of
this upgraded product, with significant orders received and paediatric cases
already successfully completed. Management expects Speedboat Slim to drive
increased sales during FY 2023.

 

Microblate Fine has now been used in over 25 cases across six centres
internationally for further ground-breaking pancreatic ablations and initial
use for liver tumour ablation. Like the Speedboat products, Microblate Fine is
low procedure cost and minimally invasive. This allows patients to be treated
as outpatients with cancerous tissue being ablated under sedation, rather than
be subjected to longer procedures under general anaesthetic. The Company
expects to publish updates on patient outcomes during 2023.

 

First revenues from licensing deals

 

The Company's Kamaptive (IP) licensing deals announced during the year
continue to progress well. First revenues were received during the period and
are included within Creo's core electrosurgical sales. Development of Creo's
core technology for use with both Intuitive and CMR Surgical's robotic
platforms is progressing well, and there are ongoing discussions to expand and
broaden partnership opportunities substantially with additional and existing
partners. Management expects that the first in-human robotic procedure using
Creo's Kamaptive technology will occur during 2023.

 

Outlook

 

The Group continues to progress towards profitability with revenues continuing
to grow and the intensive investment product development and launch phase
coming to an end. Material reductions in operating costs have contributed to a
reduced underlying EBITDA loss for FY22 compared to FY21, which is expected to
be in-line with market expectations. Management considers that this
combination of strong core product revenue growth and active cost control
means that the business is well-positioned to further reduce cash burn in FY
2023 and remains on track for EBITDA breakeven during FY 2025, also in-line
with market expectations.

 

Cash and cash equivalents as at 31 December 2022 were £13.1m (30 June 2022:
£26.1m) and the Board is considering a number of options to ensure that the
Group is sufficiently funded to meet its stated growth ambitions.

 

Craig Gulliford, Chief Executive Officer of Creo, commented: "Against the
backdrop of challenging macroeconomic conditions, 2022 was a year of
significant operational progress for Creo. I am pleased we are expecting to
report revenues and underlying EBITDA for the year in-line with market
expectations. Most pleasing is the rapid growth in the core technology and
product revenues coming out of the pandemic which leaves us well positioned
for ambitious future success as we move towards EBITDA breakeven.

 

"Our excellent progress across our clinical adoption, Pioneer Training, new
product launches and partnering projects underpins that confidence. We have
seen new indications discovered for our core products, a record number of
clinicians trained and fantastic large scale training events held worldwide,
all creating more Creo product users around the world. Our Kamaptive
partnerships with Intuitive and CMR Surgical are progressing well, and we
continue to evaluate opportunities with other potential licensing partners to
add revenue streams.

 

"The foundations for rapid growth have been well laid during the year. I'd
like to thank our shareholders for their continued support and look forward to
updating the market with further news in 2023."

 

This announcement contains inside information.

 

Enquiries:

 

 Creo Medical Group plc                              www.creomedical.com (http://www.creomedical.com)
 Richard Rees (CFO)                                  +44 (0)1291 606 005

 Cenkos Securities plc                               +44 (0)20 7397 8900
 Stephen Keys / Camilla Hume (NOMAD)
 Michael Johnson / Russell Kerr (Sales)

 Numis Securities Limited (Joint Broker)             +44 (0)20 7260 1000

 Freddie Barnfield / James Black / Duncan Monteith

 Walbrook PR                                         Tel: +44 (0)20 7933 8780 or creo@walbrookpr.com
 Paul McManus / Sam Allen                            Mob: +44 (0)7980 541 893 / +44 (0)7502 558 258

 Phillip Marriage                                    +44 (0)7867 984 082

 

 

About Creo Medical

Creo Medical is a medical device company focused on the development and
commercialisation of minimally invasive electrosurgical devices, bringing
advanced energy to endoscopy.

 

The Company's vision is to improve patient outcomes through the development
and commercialisation of a suite of electrosurgical medical devices, each
enabled by CROMA, powered by Kamaptive. The Group has developed the CROMA
powered by Kamaptive full-spectrum adaptive technology to optimise surgical
capability and patient outcomes. Kamaptive is a seamless, intuitive
integration of multi-modal energy sources, optimised to dynamically adapt to
patient tissue during procedures such as resection, dissection, coagulation
and ablation of tissue. Kamaptive technology provides clinicians with
increased flexibility, precision and controlled surgical solutions. CROMA
currently delivers bipolar radiofrequency ("RF") energy for precise localised
cutting and focused high frequency microwave ("MW") energy for controlled
coagulation and ablation via a single accessory port. This technology,
combined with the Group's range of patented electrosurgical devices, is
designed to provide clinicians with flexible, accurate and controlled clinical
solutions. The Directors believe the Company's technology can impact the
landscape of surgery and endoscopy by providing a safer, less-invasive and
more cost-efficient option for procedures.

 

For more information, please refer to the website www.creomedical.com
(http://www.creomedical.com)

 

 

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