Launch of New System/Placing

AORTECH INTERNATIONAL PLC 30 July 1999 AORTECH INTERNATIONAL plc Launch of Continuous Cardiac Output Monitoring System Placing to Raise £3m before expenses AorTech International plc, ('AorTech' or 'the Company') the Scottish-based manufacturer of cardiovascular devices announces the launch of its True Continuous Cardiac Output Monitoring System. This system represents a major breakthrough in the management of critically ill patients & patients undergoing major surgery cardiac output. * Agreements concluded to secure rights to the intellectual property, including the USA patents, for the innovative new Continuous Cardiac Output Monitoring System. * Development work and Phase 1 clinical trials successfully completed. * Product addresses shortcomings in current clinical procedures. Significant potential cost savings. * Market is currently estimated at approximately US$200 million but will show significant growth with introduction of AorTech's new system. * All other projects on schedule and on budget. * Elast-Eon - Evaluation Agreements signed with five major corporations. * Core business continuing to improve. Gordon Wright, Chairman, commented: '.. this system represents a major breakthrough in the monitoring of patients' cardiac output in intensive care, coronary care units and operating theatres. TruCCOMS could save significant costs through improved patient management and shorter hospital stays. 'The expansion of AorTech's range of products and services is already having a positive effect on the Company's turnover and results .. .' Samer Nashef, Consultant Cardiac Surgeon, Papworth Hospital, commented: 'The medical community has long sought a device that can continuously monitor cardiac output in patients on intensive care units, coronary care units and operating theatres. Such a device would help in caring for critical patients by providing prompt diagnosis and allowing timely intervention. The early clinical results from AorTech's new continuous cardiac output monitoring system appear to indicate that the system would meet this important clinical need' 30 July 1999 THERE WILL BE AN ANALYST MEETING TODAY (FRIDAY 30 JULY) AT 11:00 AT COLLEGE HILL, 29 GRESHAM STREET, LONDON EC2 Enquiries: AorTech International plc 01698 746699 Gordon Wright, Chairman Eddie McDaid, Managing Director College Hill 0171 457 2020 Michael Padley Margot Cowhig For further information, visit AorTech's website at www.aortech.com Placing AorTech International plc announces that it proposes to raise approximately £2.88 million (net of expenses) by way of a Placing principally with institutional investors of 3,595,106 New Ordinary Shares at 85p per share. The funds raised will be used to acquire intellectual property rights, to finalise clinical trials and undertake the initial commercialisation of a new Continuous Cardiac Output Monitoring System ('TruCCOMS'), to continue with the next stage of development of the Company's new synthetic tri-leaflet heart valve and to make any business acquisitions the Company considers appropriate. The Placing is conditional, inter alia, on certain resolutions being passed at an EGM of the Company. CCOMS - Alba Critical Care Limited We are pleased to have concluded agreements to secure rights to the intellectual property, including the USA patents, for the innovative TruCCOMS. In the Directors' view, this system represents a major breakthrough in the monitoring of patients' cardiac output both during and after surgery. The system, which consists of a disposable catheter linked to an analytical and display monitor that provides immediate response and continuous monitoring of cardiac output, will introduce to the medical device market a product which addresses shortcomings in the current clinical assessment technology during surgical procedures and intensive care. Development work has completed during the last eighteen months and the first phase of clinical trials confirms the accuracy, fast response and real time capability. Market enquiries indicates that the TruCCOMS will provide improved patient management information which is not currently available to surgeons, anaesthetists, cardiologists and critical care specialists. In parallel with the conclusion of second phase clinical trials of TruCCOMS, which is scheduled for mid-September this year, we shall be progressing towards both European and USA regulatory approval. The Directors are seeking to obtain these approvals by December 1999. If these are obtained, the Directors anticipate that the technology will be ready to enter intensive care units and operating theatres by the end of December 1999. The achievement of the Federal Drug Administration approval will allow the Group to market TruCCOMS in the USA. AorTech intends to commercially manufacture TruCCOMS at its facility in Scotland. The present world-wide market of approximately US$200 million will, the Directors believe, increase with the introduction of our new system. The acquisition of this intellectual property together with the development of TruCCOMS to date through to clinical trials represents a major breakthrough by the Company and will, the Directors believe, result in real growth in shareholder value. The consideration for the acquisition of the rights to the TruCCOMS product will be settled by the issue of a maximum of one million Ordinary Shares in April 2000 and a cash payment of US$600,000 to the vendor Ami-med Corporation Inc. ('Ami-med'). Ami-med will also receive a 6.5% shareholding in Alba, a subsidiary of AorTech, with options to increase this shareholding to up to 24% depending on the achievement of various milestones. Current Trading The financial year to 31 March 1999 was one of significant progress. On the one hand, AorTech's existing business of manufacturing and distributing heart valves and associated products increased substantially during the year with a 54% increase in turnover and significantly reduced losses, and, on the other, major milestones were achieved in the development of new innovative products in the medical device sector. Elastomedic has concluded Evaluation Agreements with five major corporations for use of its biomaterials in medical device applications other than the new synthetic tri-leaflet heart valve. Future Prospects The expansion of AorTech's range of products and services, which has been previously announced, is already having a positive effect on the Company's turnover and results and the Directors expect that this will continue to be reflected during the course of the current financial year. The acquisition and development, through our subsidiary Alba, of the new TruCCOMS demonstrates our determination not only to expand further our product base but also to introduce further innovative products with, we believe, significant profit potential, to the medical device market. Obtaining regulatory approval for TruCCOMS, during the course of the current financial year together with the likelihood of income commencing will, we anticipate, have a substantial benefit for the long-term future growth of AorTech. Details of the Placing The Company has entered into a Placing Agreement with Bell Lawrie Wise Speke which is conditional, inter alia, on the passing of Resolutions to be proposed at an EGM of the Company to be held on 26 August 1999 and on the New Ordinary Shares being admitted to trading on AIM. Application has been made for the New Ordinary Shares to be admitted to trading on AIM and it is anticipated that they will be admitted to trading on AIM on 27 August 1999. The New Ordinary Shares will rank pari passu in all respects with the Existing Ordinary Shares. Ian Cameron, Director will be allocated 12,000 New Ordinary Shares in the Placing at 85p per share. A Circular containing details of the Placing, the acquisition of the rights to TruCCOMS and Notice of the EGM is expected to be dispatched together with the Report & Accounts for the year ended 31 March 1999 to shareholders later today.
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