AGM Trading and US LiquiBand® Update
10 June 2020
Advanced Medical Solutions Group plc
("AMS" or the "Group")
AGM Trading and US LiquiBand® Update
Winsford, UK: Advanced Medical Solutions Group plc (AIM: AMS), the surgical and advanced wound care specialist company, announces that at the closed AGM to be held later today Chris Meredith, Chief Executive Officer of AMS, will read the following statement:
COVID-19
The Group's priority continues to be the safety, health and well-being of its employees and their families. All AMS sites are currently in operation and meeting the Group's commitments to maintain the supply of its medical devices to healthcare partners and customers worldwide whilst complying with government measures on social distancing.
The Group confirms it is in robust financial condition to weather the continued global disruption caused by the pandemic and retains its strong cash balances broadly in line with its position at 31 December 2019 (£65 million and no debt) with an undrawn unsecured £80 million credit facility, which is committed until December 2023.
As announced at the start of April, the Group was experiencing a slowdown in demand for its products caused by the cancellation or postponement of elective surgeries, dental procedures and a reduction in the volume of accident & emergency treatments. There has also been a slow-down in hospital treatment of chronic wounds and some supply disruption due to the global lockdowns. As a result, the Group has been experiencing reductions to its revenues at the upper end of the 3% to 5% of annual sales per month estimate announced by the Board in April .
Although we are anticipating a gradual return to more normalised levels of hospital activity for both our surgical and woundcare businesses, the Group expects the effects of COVID-19 will continue to have an impact in the second half of 2020, albeit at a lower level, as volumes will take time to recover to pre-COVID-19 levels.
As previously stated, the Group continues to manage its operating costs, working capital and capital expenditure to ensure that it remains in the strongest possible financial and operational position to return to strong growth when the Group's end markets recover. Reflecting the ongoing financial strength of the Group and the Board's belief in the long-term prospects of AMS, the Board reconfirms its intention to recommend the payment of the proposed final dividend for 2019.
US LiquiBand ®
We are pleased to report that end market sales data for LiquiBand® show that it has started to recover some momentum which resulted in strong sales volumes for the first quarter of 2020 and market share gains. This strong performance predated the significant reduction in demand seen since the start of the second quarter as a result of the COVID-19 pandemic but did evidence that the sales initiatives implemented in late 2019 and earlier this year have been successful. In addition to this, the launch of LiquiBand® Rapid™ went ahead with one of the Group's main US partners, albeit at a lower level than originally planned due to COVID-19 restrictions. This partner is now well positioned to compete in the US market when hospitals reopen for elective surgery.
The LiquiBand® XL critical pilot study has been completed with three different formulations successfully meeting our objective of 14-day wear time. However, some of the variants demonstrated extended set time. The lead formulation, which we believe maximises our potential for long term commercial success on all product features, is an accelerated formulation of LiquiBand® that will require additional stability and biocompatibility data along with a repeat of the clinical study as part of the FDA filing. The additional work required on this lead formulation means that we now expect to file for 510K approval in the first quarter of 2021. We expect the financial impact of this delayed approval to be offset by the stronger than anticipated LiquiBand® market share improvement and short term commercial agreements with US hospitals to encourage additional LiquiBand® adoption in the run up to the LiquiBand® XL approval. Once approved, LiquiBand® XL will allow entry into the market for care of larger wounds and unlock further growth potential in the LiquiBand® business with all partners.
Chris Meredith, Chief Executive Officer of AMS, commented: "Our strong balance sheet enables us to weather the disruption of COVID-19 whilst continuing to invest in R&D and regulatory projects, in order to be in the best position to return to strong growth when the Group's end markets recover to a more normal basis.
Given the strong demand for LiquiBand ® in the first quarter, the launch of LiquiBand® Rapid™ and the development plan now in place for LiquiBand® XL that will allow entry into the larger wounds market, we remain confident in the growth potential for the LiquiBand® portfolio."
The Group expects to release a trading update covering the first six months of the financial year in early July 2020.
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For further information, please contact:
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Advanced Medical Solutions Group plc |
Tel: +44 (0) 1606 545508 |
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Chris Meredith, Chief Executive Officer Eddie Johnson, Chief Financial Officer |
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Consilium Strategic Communications |
Tel: +44 (0) 20 3709 5700 |
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Mary-Jane Elliott / Matthew Neal / Olivia Manser |
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Investec Bank PLC (NOMAD & Broker) |
Tel: +44 (0) 20 7597 5970 |
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Daniel Adams / Patrick Robb / Gary Clarence |
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About Advanced Medical Solutions Group plc
AMS is a world-leading independent developer and manufacturer of innovative and technologically advanced products for the global surgical and woundcare markets, focused on quality outcomes for patients and value for payers. AMS has a wide range of surgical products including tissue adhesives, sutures, haemostats, and internal fixation devices, which it markets under its brands LiquiBand®, RESORBA®, and LiquiBandFix8®. AMS also supplies wound care dressings such as silver alginates, alginates and foams through its ActivHeal® brand as well as under white label. In 2019, the Group made two acquisitions: Sealantis, an Israeli medical device company with a patent-protected sealant technology platform; and Biomatlante, an established developer and manufacturer of innovative surgical biomaterial technologies based in France.
AMS's products, manufactured in the UK, Germany, France, the Netherlands, and the Czech Republic, are sold globally via a network of multinational or regional partners and distributors, as well as via AMS's own direct sales forces in the UK, Germany, the Czech Republic and Russia. The Group has R&D innovation hubs in the UK, Germany, France and Israel. Established in 1991, the Group has approximately 700 employees. For more information, please see www.admedsol.com.
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