REG - Deltex Med Grp PLC - Half-year Trading Update & Potential Fundraise

Deltex MedicalAnnouncement

06/07/2023 07:15

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RNS Number : 1796F  Deltex Medical Group PLC  06 July 2023

The information contained within this announcement was deemed by the Group to
constitute inside information as stipulated under the UK Market Abuse
Regulation

 

6 July 2023

 

Deltex Medical Group plc

("Deltex Medical", the "Company" or the "Group")

 

Half-Year Trading Update

and

Potential Equity Fundraise

 

Deltex Medical Group plc (AIM: DEMG), the global leader in oesophageal Doppler
monitoring, provides a trading update following the end of the first half of
its current financial year on 30 June 2023 ("H1 2023").

 

Key highlights:

 

·    unaudited revenues for H1 2023 were £1.1 million (H1 2022: £1.2
million).

·    cash at hand on 30 June 2023 was £0.1 million (H1 2022: £0.6
million).

·    next generation TrueVue monitor has completed all required internal
and external testing, with the finalisation of the technical file expected
imminently to enable launch of the product.

 

Update on launch of next generation TrueVue monitor

 

As previously announced by the Group, work in relation to the next generation
TrueVue monitor is substantially complete, with the Group having completed all
the required internal and external testing. As a result of this, the
independent test company used by the Group has issued its report on its
third-party review of the safety tests and is now conducting the review on the
electromagnetic compatibility (EMC) report of the monitor. Following
completion of that review, the Group expects to be able to quickly finalise
the technical file (the "Technical File") required for the launch of the new
monitor and following which the product will be eligible for use by
clinicians. It is a regulatory requirement for the Group to complete the
Technical File before the new monitor can be released for sale in the UK and
EU.

 

Trading update

 

Unaudited revenues for the six months ended 30 June 2023 were £1.1 million
(H1 2022: £1.2 million). As announced on 26 June 2023, the Group has
experienced weaker than expected trading in the second quarter of 2023, which
the Board believes is a result of, inter alia, customers waiting for the new
TrueVue monitor to be available. Cash at hand on 30 June 2023 was £0.1
million (H1 2022: £0.6 million).

 

The combination of delays in the launch of the Group's next generation TrueVue
monitor and the national tender for haemodynamic monitoring with one of the
Group's Latin American distributors failing to progress to the stage of a
revenue contributing contract for the Group, has impacted the Group's
financial position as announced on 26 June 2023. Accordingly, on 26 June 2023,
the Group's ordinary shares were suspended from trading on AIM pending
clarification of the Group's financial position, for which fundraising is
being explored as detailed below.

 

Potential equity fundraise

 

The Board is considering various options to obtain additional finance for the
Group and is currently exploring an equity fundraise to provide the necessary
working capital. The Group is working with its broker, Allenby Capital, to
discuss a potential equity fundraise with investors.  In order that existing
shareholders can also take part in a fundraising, a retail fundraising offer
is also being considered.  Brokers or wealth mangers acting for existing
shareholders may contact Allenby Capital, the Company's broker.

 

There can be no certainty that an equity fundraising will be concluded,
however, any such equity fundraising is likely to be conducted at a material
discount to the Group's current share price.

 

The Board is also seeking to obtain a resumption of trading in the Group's
shares on AIM as soon as possible.  In any case, this is expected to be after
the completion of a sufficient fundraise.

 

In the absence of availability of any alternative funding solutions, the
Directors consider that it is highly likely that the Company would be required
to appoint an administrator in order to protect the interests of creditors.

 

The Group will make further announcements, including details of any
fundraising, as and when appropriate.

 

For further information, please contact:

 

 Deltex Medical Group plc                                        01243 774 837

 Nigel Keen, Chairman                                            investorinfo@Deltexmedical.com
 Andy Mears, Chief Executive
 Natalie Wettler, Group Finance Director

 Allenby Capital Limited - Nominated Adviser                     020 3328 5656

& Broker

 Jeremy Porter / Vivek Bhardwaj (Corporate Finance)              info@allenbycapital.com
 Tony Quirke / Stefano Aquilino (Sales & Corporate Broking)

 

Notes for Editors

 

Deltex Medical's technology

 

Deltex Medical's TrueVue System uses proprietary haemodynamic monitoring
technology to assist clinicians to improve outcomes for patients as well as
increase throughput and capacity for hospitals.

 

Deltex Medical has invested over the long term to build a unique body of
peer-reviewed, published evidence from a substantial number of trials carried
out around the world. These studies demonstrate statistically significant
improvements in clinical outcomes providing benefits both to patients and to
the hospital systems by increasing patient throughput and expanding hospital
capacity.

 

The Group's flagship, world-leading, ultrasound-based oesophageal Doppler
monitoring ("ODM") is supported by 24 randomised control trials conducted on
anaesthetised patients. As a result, the primary application for ODM is
focussed on guiding therapy for patients undergoing elective surgery. The
Group will shortly launch a new, next generation monitor which will make the
use of the ODM technology more intuitive and provide augmented data on the
status of each patient.

 

Deltex Medical's engineers and scientists carried out successful research in
conjunction with the UK's National Physical Laboratory ("NPL"), which has
enabled the Group's 'gold standard' ODM technology to be extended and
developed so that it can be used completely non-invasively. This will
significantly expand the application of Deltex Medical's technology to
non-sedated patients. This new technological enhancement, which will be
released on the new next generation monitor, will substantially increase the
addressable market for the Group's haemodynamic monitoring technologies and is
complementary to the long-established ODM evidence base.

 

Deltex Medical's new non-invasive technology has potential applications for
use in a number of healthcare settings, including:

§ Accident & Emergency for the rapid triage of patients, including the
detection and diagnosis of sepsis;

§ in general wards to help facilitate a real-time, data-driven treatment
regime for patients whose condition might deteriorate rapidly; and

§ in critical care units to allow regular monitoring of patients post-surgery
who are no longer sedated or intubated.

 

One of the key opportunities for the Group is positioning this new,
non-invasive technology for use throughout the hospital. Deltex Medical's
haemodynamic monitoring technologies provide clinicians with beat-to-beat
real-time information on a patient's circulating blood volume and heart
function. This information is critical to enable clinicians to optimise both
fluid and drug delivery to patients.

 

Deltex Medical's business model is to drive the recurring revenues associated
with the sale of single-use disposable ODM probes which are used in the
TrueVue System and to complement these revenues with a new incremental revenue
stream to be derived from the Group's new non-invasive technology.

 

Both the existing single-use ODM probe and the new, non-invasive device will
connect to the same, next generation monitor which is due for launch in 2023.
Monitors are sold or, due to hospitals' often protracted procurement times for
capital items, loaned in order to encourage faster adoption of the Group's
technology.

 

Deltex Medical's customers

 

The principal users of Deltex Medical's products are currently anaesthetists
working in a hospital's operating theatre and intensivists working in ICUs.
This customer profile will change as the Group's new non-invasive technology
is adopted by the market. In the UK the Group sells directly to the NHS. In
the USA the Group sells directly to a range of hospital systems. The Group
also sells through distributors in more than 40 countries in the European
Union, Asia and the Americas.

 

Deltex Medical's objective

 

To see the adoption of Deltex Medical's next generation TrueVue System,
comprising both minimally invasive and non-invasive technologies, as the
standard of care in haemodynamic monitoring for all patients from new-born to
adult, awake or anaesthetised, across all hospital settings globally.

 

For further information please go to www.deltexmedical.com
(http://www.deltexmedical.com)

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