The following replaces the trading update announcement released at 0700 under RNS number 8379W
6 February 2012
Lifeline Scientific, Inc
("Lifeline" or "the Company")
Lifeline Scientific, the medical technology company, issues the following trading update for the year ended 31 December 2011.
2011 performance in line with market expectations
Trading in the second half of the year has been in-line with management expectations and as a result, Lifeline will report full year revenues and profit before tax in-line with market expectations.
Revenue growth of over 10 per cent for the period reflects strong growth across renal transplantation products and services, thus continuing the positive trend seen in this core business segment since admission of the company to AIM in 2008. This performance is underpinned by both:
· Expanding worldwide adoption and increasing utilization of the Company's lead technology, LifePort Kidney Transporter, where a growing body of clinical evidence supports the benefits of LifePort versus the conventional box-of-ice method for kidney preservation prior to transplantation.
· Increasing sales of the Company's portfolio of complementary transplantation related products.
During 2011, a total of 49 new LifePort Kidney Transporters were sold bringing the total installed base worldwide to 441. This includes the sales of initial units into Australia (as reported at the time of the interims) and 3 new transplant centres in Switzerland.
Incremental near term investments drive continued geographic expansion
The Company's focus over the last 12 months has remained the expansion of its kidney transplantation related business in the US and Europe. Indeed the Company continues to invest in developing new regions and securing reimbursement within key European markets. Incremental investment in staff and infrastructure during 2012 is targeted mainly to support anticipated growth overseas and ensure Lifeline is well positioned to respond to new market opportunities for LifePort as they arise.
Along with US and European expansion, strong progress is being made with commercialization efforts in Brazil. We are very pleased to announce that initial orders of approx. $0.95 million for the Company's LifePort Kidney Transporter and related consumables have been facilitated by way of government grants within the states of Rio de Janeiro and Ceará. We anticipate that leading transplant programs in Rio and Fortaleza will be the first adopters. In the meantime, Brazilian regulatory clearances for the Company's full line of clinical transplantation products are near completion while training and market development efforts in key regions have commenced in anticipation of full market access. These activities along with the extensive market development efforts expended during 2011 have reinforced the Board's belief that the Brazil market offers substantial potential for Lifeline's products and services in the coming years. The Company is committed to adding further resources as needed in 2012 to ensure that it can most effectively serve Brazil's growing transplant community.
Lifeline continues to make progress in China as efforts towards obtaining regulatory approvals and distribution for its full suite of transplant products are advancing as planned. Market development activities have commenced with the securing of a distributorship agreement for Lifeline's complete product line with an established China market leading transplant products distributor. Training and certification of clinical staff at leading regional kidney transplant hospitals, and support of our distributor's planning efforts around reimbursement and LifePort market launch will be ongoing during 2012.
Technology innovation in response to market needs and a changing regulatory environment
Meaningful innovations to existing products as well the development of new product lines were also a major focus in 2011. LifePort Liver Transporter, one of the Company's several new technology initiatives, made significant progress and presently remains on target for initial clinical availability by year end 2012. Due to the timing of availability of certain LifePort Liver Transporter components and vendor resources, approximately $0.5 million of development spend originally anticipated for 2H11, is anticipated to be incurred in 2012 and contribute to higher product development costs this year than in 2011.
To further its market leadership position, the Company continues to invest in technological enhancements for its LifePort Kidney Transporter. Several important new features were integrated during 2011 including GPS/GPRS, while several more should be realized during 2012. These include new cannulae to enable LifePort use with living donor kidneys, precision controlled oxygen delivery capability, and enhanced data capture of key organ performance parameters. These advancements arise as our response to demands from the field to address unmet needs. Forthcoming changes to EU regulations appertaining to the transportation of donor organs will drive additional new developments.
2012; another year of revenue growth potential and targeted investments to secure market leadership into the future
Lifeline see revenue growth and contribution margin within its core kidney transplantation franchise continuing the positive trend of prior years. The Company's presently contemplated strategic investments into geographic expansion and product development initiatives discussed above suggest that operating and product development costs for 2012 could be materially higher than 2011 and prior published (Sept 2011) analyst expectations. However Lifeline is presently confident that such investments are prudent, timely and aimed to translate into accelerating revenue growth and profitability in the medium term.
David Kravitz, Chief Executive of Lifeline Scientific, said:
"Our theme for 2011 was accelerating investment into mission critical geographic and product development efforts while delivering strong growth in revenue and profits within our core LifePort kidney preservation business. Driving further growth in this area will be a key focus for us during 2012, while we continue to make meaningful investments in strategic geographic expansion, product line enhancements, and new product development. We are especially excited about the opportunities to contribute to the development of transplantation medicine within the emerging markets of Brazil, China and other territories where LifePort is starting to be introduced.
Lifeline Scientific, Inc. +1 847-294-0300
David Kravitz, CEO
Seymour Pierce +44 (0)20 7107 8000
Mark Percy (Corporate Finance)
David Banks (Corporate Broking)
FTI Consulting +44 (0)20 7831 3113
Simon Conway / John Dineen
About LifePort Kidney Transporter
Created with the challenges of organ recovery and transport in mind, LifePort Kidney Transporter is a proprietary medical device designed to provide improved kidney preservation, evaluation and transport prior to transplantation. Today, it is widely recognized as the worlds leading machine preservation device for kidneys. Employed by surgeons in over 126 leading transplant programs in 23 countries worldwide, LifePorts have successfully preserved over 38,000 kidneys intended for clinical transplant. The product provides a sealed, sterile, protected environment where a solution is gently pumped through the kidney at cold temperatures to minimise damage while the organ is outside the body. LifePort is lightweight and portable, allowing organs to be perfused from the time of recovery until transplant. It is designed to travel unaccompanied by land or air, safely transporting the kidneys across town or between countries. While the kidney is being perfused, LifePort records data on temperature, flow rate, vascular resistance and pressure every 10 seconds providing surgeons with additional data prior to transplant. LifePort is the only system with clinical outcomes data produced from an independent, prospective, randomised, statistically powered, multi-centre clinical trial. Study results have been widely published in scientific journals, including the New England Journal of Medicine. Data indicates that patients receiving LifePort preserved kidneys experienced significant reduction in the incidence and duration of delayed graft function and increased graft survival at 1-year post transplant. LifePort has also been recognized for its industrial design and engineering excellence having won medical device industry design excellence awards, has been selected for exhibition at the Smithsonian Cooper-Hewitt, National Design Museum and is part of the permanent Collection of The Museum of Modern Art (MoMA) in New York City.
About Lifeline Scientific Inc.
Lifeline Scientific, Inc. is a Chicago-based global medical technology company with regional offices in Brussels, and Sao Paulo. The Company's focus is the development of innovative products that improve transplant outcomes and lower the overall costs of transplantation. Its lead product is the FDA cleared, CE marked, and clinically validated, LifePort Kidney Transporter. Devices for preservation of the liver, pancreas, heart, and lung are in late stage pre-clinical development.