REG - Creo Medical Group - Half Year Trading Update

Creo MedicalAnnouncement

03/08/2023 07:00

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RNS Number : 1378I  Creo Medical Group PLC  03 August 2023

Creo Medical Group plc

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

 

Half Year Trading Update

 

Core technology revenue in the first six months of 2023 to equal Core
technology revenue for the twelve months of FY 2022; trading in line with
expectations and Management confident of achieving the Company's objectives

 

 

Creo Medical Group plc (AIM: CREO), the medical device company focused on the
emerging field of minimally invasive surgical endoscopy, provides an unaudited
trading update for the six months ended 30 June 2023.

 

Trading update

 

Creo made significant progress during the first half of 2023 ("H1-2023") with
a step change in commercial activity and considerable strides made in all
facets of the business. Boosted by the launch of a slimmer Speedboat Inject in
late 2022, trading across the business has tracked in-line with management's
expectation during H1-2023 and the Company expects to report:

 

·    Total revenue in H1-2023 of £15.7m, a 15% increase vs H1-2022 :
£13.6m;

·    H1-2023 revenue from Creo's core technology of £0.9m (H1-2022 :
£0.4m), equal to like for like revenue for FY 2022 (£0.9m);

·    Endotherapy consumable revenues of £14.3m, representing growth of c.
12% vs H1-2022 (£12.8m);

·    Kamaptive revenue of £0.5m (H1-2022 : £0.5m) in respect of
development work undertaken with robotic partners in H1-2023; and

·    A continued focus on cost control, with underlying OPEX remaining
flat over H1-2023. Underlying administrative expenses in the period of £18.0m
(H1-2022 : £19.7m) reflecting the reduction in R&D spend and strict cash
control by management as Creo transitions into a commercial and operational
based business with a clear path towards break even.

 

The increase in revenue from Creo's core technology has been driven by an
increase in new and high-volume users, global cases, a strengthened pipeline
of interested clinicians and Creo's technology being introduced into new
territories.

 

Looking forward, the pipeline of users and prospective users for Creo's core
technology continues to grow. Multi-national and bespoke regional training and
mentoring events, held during H1-2023, have resulted in 115 confirmed users at
the end of the period, an increase of 44% over the 80 confirmed users as at
December 2022, and 30% over the 91 as at 31 March 2023. Cases using Speedboat
Inject in Q1 and Q2-2023 were both 50% higher than the FY-2022 quarterly
average. Management is confident of this significant growth continuing through
the remainder of 2023 and beyond.

 

Creo's Endotherapy consumable business also continued to grow during H1-2023,
with the Company now having implemented a sales and distribution structure in
the US to replicate its European success. First sales were achieved during
H1-2023 and growth expected in H2-2023.

 

Creo's Kamaptive Licensing partnerships with Intuitive and CMR have progressed
well during the first half of 2023. The team continues to explore expanding
the scope and reach of partnerships, as the potential for the wider use of
Creo's technology presents itself. The investment made in FY-2022 in the next
generation CROMA platform is paying off, enabling not only the scaling and
scope of the Company's product range organically over the coming years but
also facilitating the development and expansion of its partnerships and
licensing programs.

The Company expects a combination of all these factors, together with the
introduction of an even slimmer Speedboat device which is currently under FDA
review, to result in continued growth in its Core technology and increased
utilisation by users over the remainder of 2023 and beyond, validating the
Board's confidence in Creo's long-term growth plans.

 

Significant growth in the use of Speedboat Inject

 

Speedboat Inject (targeting gastrointestinal ("GI") lesions (including Bowel
and Upper GI cancer) and swallowing disorders) is a flexible endoscopic device
which delivers both advanced bipolar radiofrequency and microwave energy
through a single device. By bringing advanced energy precision to endoscopic
procedures in the entire GI tract, it can curatively and safely resect lesions
in the colon, stomach and oesophagus, avoiding the need for surgery.

 

The launch of Creo's slimmer Speedboat Inject in late 2022, supported by
Creo's Pioneer training programme, boosted use of the device in H1 2023. The
slimmer device is compatible with the working channel of most major endoscopes
which allow clinicians to gain deeper access into the GItract and have
increased manoeuvrability, facilitating easier retroflection techniques.

 

Speedboat Inject is now CE marked according to the Medical Device Regulation
("MDR") for use throughout the entire GI tract (as is already the case in the
US and APAC region). Over 40% of global cases performed with Speedboat Inject
to date are in the upper GI across multiple indications. Upper GI clearance in
the UK and Europe significantly increases the number of procedures for which
the device can be utilised. This has been supported by the number of doctors
attending Creo's Pioneer training programme and post-clearance upper GI case
numbers. Management expect that the wider clearance will continue to increase
Creo's potential user base and their usage substantially.

 

The results seen by The Royal Oldham Hospital during H1-2023 illustrates the
positive impact of adopting Speedboat Inject and launching a Speedboat
Submucosal Dissection ("SSD") service on patient outcomes, waiting lists and
the prevention of bowel cancer. Having attended Creo's Pioneer training
programme and installed devices across multiple endoscopy rooms immediately
post training, the hospital was able to perform five SSD cases in its first
afternoon, with dozens more patients successfully treated in short order.

 

During H1-2023, Speedboat Inject has been used for the first time in Croatia,
Slovenia, Malaysia and in the United Arab Emirates. The increased pace of
adoption can also be seen in India, where one of the world's premier
healthcare settings, AIG Hyderabad Hospital, quickly became the first in Asia
to treat 50 patients using Speedboat Inject, less than a year after Creo
officially opened its APAC regional hub. The progress across APAC has been
particularly significant, with Covid-19 restrictions all but dropped during
H1-2023 and management seeing potential for greater increases as Creo launches
more products in APAC during H2-2023.

 

Elsewhere Professor Fatih Aslan, based in Istanbul, successfully performed
four SSD procedures over a single day. Importantly, one of these cases was
completed in under 15 minutes - a key illustration of how efficiently
Speedboat Inject can be used by clinicians, allowing them to tackle more cases
in a shorter period of time. Further case examples can be seen at
https://www.linkedin.com/company/creo-medical/posts/
(https://www.linkedin.com/company/creo-medical/posts/) .

 

Finally, the validation of Creo's technology has gathered further momentum
with the selection of Speedboat Inject by the National Institute for Health
and Care Excellence ("NICE") to be scoped and routed for guidance, and by an
ongoing collaboration with NHS Supply Chain.

 

Creo expects to announce its unaudited results for H1 2023 during September
2023.

 

 

Craig Gulliford, Chief Executive Officer of Creo, commented: "Creo has made
considerable strides across all areas of the business over the past six
months, not only in terms of attracting the necessary funding to provide us
with a clear path towards break even, but also in terms of the rapid pace of
adoption and recognition that the Company is now achieving globally. This has
been reflected in the significantly improved performance in both our core
technology revenues and our number of confirmed users.

 

"The slimmer Speedboat Inject device (with an even slimmer version currently
under FDA review), MicroBlate Flex trial, NICE recognition and quicker
adoption of the technology have all been milestones we've been working towards
for some time and so to see them begin to bear fruit is testament to the
relentless hard work across the business.

 

"Our Kamaptive programme continues to progress, and we continue to look to
expand the scope and reach of our potential partnerships and the wider use of
our technology.

 

"Our technology is beginning to have the impact we knew it could, and the path
ahead is a clear one thanks to what has already been achieved. It's incredibly
rewarding to see patients now treated on a daily basis across all corners of
the globe with our game-changing technology."

 

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 (Sales)

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

 Freddie Barnfield / Duncan Monteith / Euan Brown

 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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