REG - Creo Medical Group - Trading update

Creo MedicalAnnouncement

03/02/2022 07:00

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RNS Number : 5359A  Creo Medical Group PLC  03 February 2022

Creo Medical Group plc

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

 

Trading update

 

Strong progress against 'Build, Buy and Partner' strategy

Revenues ahead of expectations

 

Creo Medical Group plc (AIM: CREO), a medical device company focused on the
emerging field of surgical endoscopy, announces a trading update for the year
ended 31 December 2021, as the Company continues to deliver on its
three-tiered 'Build, Buy, and Partner' strategy.

 

During 2021 Creo has continued to build momentum through sustained commercial
progress. The Group expects to report overall revenue for the year ended 31
December 2021, ahead of expectations, at just over £25m, despite the well
documented challenges related to COVID-19. Revenue from the Company's core
Creo product portfolio is growing and is in-line with management's cumulative
revenue forecasts at the time of IPO in December 2016.

 

Build

The final quarter of 2021 saw a significant uplift in commercial orders and
adoption of Speedboat Inject in the US (upper and lower GI) and Europe (lower
GI). As previously announced, Speedboat Inject offers large cost savings in
lower GI procedures versus a traditional surgical procedure as well as
improved clinical outcomes. Despite the pandemic, Speedboat Submucosal
Dissection (SSD) procedure volumes doubled during 2021 versus 2020 when
procedures utilising Creo products were delayed as a result of routine
diagnostics and elective procedures being postponed due to COVID-19.

 

Over the course of 2021, Creo's pipeline of doctors waiting to be trained as
part of the Group's Clinical Education Programme has more than doubled from
the number trained in 2020. Demand for training on Creo's products continues
to build and the number of global training centres across our direct markets
increased threefold over the course of 2021.

 

Creo trained a significant number of leading clinicians in 2021, who are now
product users, and the Company expects this number to rise in 2022. In order
to service this increased demand, Creo has increased its direct sales force by
25% since the beginning of 2021.

 

The opening of the Company's US headquarters during 2021, with a learning
centre and fully equipped training laboratory, has helped to support Creo's
commercial roll-out in the key US market. Creo has also secured office space
in Singapore to act as its APAC hub which is expected to be formally opened
during Q1 2022. This will aid the commercial roll-out of Creo's products in
APAC during 2022 and is expected to satisfy the backlog of demand, following
numerous distributor agreements being signed throughout 2021. In addition,
Creo completed the purchase of the freehold of Creo House, Chepstow, and the
adjacent building, to support the Company's planned and sustained growth.

 

As at 31 December 2021 the Company had a net cash position of approximately
£44 million.

 

Buy

The Albyn acquisition in 2020 has been a success, bringing increased revenue
year on year and the integration of Creo's European direct sales teams is now
yielding new users of the Group's core technology.

 

In November 2021 Creo announced that it had acquired Aber Electronics Limited,
a UK based manufacturer and designer of power amplifiers and radio frequency
products and a key supplier to Creo's CROMA Advanced Energy Platform. The
acquisition of Aber Electronics complements Creo's R&D and manufacturing
processes, adding further specialist microwave and radio frequency capability
and expertise within the business, helping enable the adaptation of the
Company's technology for its partnering programme whilst also securing a key
element of the Group's supply chain. This acquisition has helped solidify
Creo's position at the forefront of miniaturised advanced energy applications
for use in multiple end markets.

 

Partner

As announced on 24 January 2022, the Company has entered into non-binding
heads of terms (the "HoTs") with a number of parties which relate to the
Company's SpydrBlade, Cool Plasma and MicroBlate technologies. This is
accelerating the development of the "powered by Kamaptive" brand, by enabling
partners to leverage our core "Kamaptive" technology.

 

The Company believes that such partnerships have the potential to create
shareholder value through granting third-party access to Creo's advanced
energy technology in markets adjacent to those where the Company is already
operating. This includes fields such as laparoscopic surgery, robotically
assisted surgery, and non-thermal plasma sterilisation.

 

The parallel applications of the Company's technology offer growth
opportunities in global markets and enable Creo to leverage its IP portfolio
of 376 granted patents, with 870 pending as at 31 December 2021. With the
right partners, the Company believes that Creo's technology has the potential
to fundamentally change the way that patients are cared for and to improve
patient outcomes.

 

Craig Gulliford, Chief Executive Officer of Creo, commented:

"I am pleased to report on what has been a successful year for Creo, with
strong progress against our 'Build, Buy, and Partner' strategy. We have seen
significant growth in commercial orders and adoption of Speedboat Inject in
the US and Europe, the successful acquisition of Aber Electronics, as well as
agreeing HoTs with a number of third parties to provide access to our advanced
energy technology. Particularly encouraging has been completing the transition
from a distribution model in core markets to an integrated direct sales team,
built from the ground up in the US and through successful integration of Albyn
Medical into our European business.

 

"We see the COVID-19 outlook improving, with an increased backlog of doctors
gearing up to perform procedures as staffing challenges reduce, and
restrictions ease across the globe.

 

"2022 has already started positively, with strong performances seen from our
core product portfolio. Throughout the rest of the year, we look forward to
continuing to execute and expand our three-tiered strategy through the
education and training of clinicians, the roll-out of our product portfolio in
APAC and further commercial orders and adoption of Speedboat Inject in the US
and Europe. With our strong cash position and clear strategy, Creo is well
positioned to deliver shareholder value in 2022. We look forward to updating
shareholders in more detail in due course."

 

 

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 Ltd                                     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 / +44 (0)7867 984 082

 Phillip Marriage

 

 

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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