Half Year Trading Update

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/.

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
Richard Rees (CFO)	[phone]
Cenkos Securities plc	[phone]
Stephen Keys / Camilla Hume (NOMAD)
Michael Johnson (Sales)
Numis Securities Limited (Joint Broker) Freddie Barnfield / Duncan Monteith / Euan Brown	[phone]
Walbrook PR	Tel: [phone] or [e-mail]
Paul McManus / Sam Allen Phillip Marriage	Mob: [phone] [phone]

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

 

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