Aortech Share Discussion Threads

[bones] 14/4/2020 11:44

SV, it is a hit to RUA’s cash flow in the short term so hopefully the US can sort its problems out soon.

Let’s not forget why we are in this share though and the news on that front included in this RNS was pretty encouraging:

“Recent developments on these projects have been very encouraging with both a step change in the design of the textile substrates and a major development in the Elast-Eon(TM) coating technology which through utilising a fully automated process allowed Elast-Eon(TM) to be deposited on the exterior of the graft without interfering with the internal lumen. Regulatory testing of the new graft is still anticipated in the second half of this year and the animal trials, in particular, are designed to demonstrate the grafts' performance targets of providing good surgical feel and natural healing without having to rely upon animal sourced material for initial sealant. The Board believes that eliminating animal derived products will become increasingly important to patients, clinicians and regulators in next generation devices.

Similarly, good progress continues on the Heart Valve project despite some COVID-19 related delays. The tooling for the heart valve frames is almost complete and the tooling for the leaflets is nearing completion. We have taken delivery of the key raw materials for valve manufacture and anticipate manufacturing trials to commence during May 2020.”

I’ve made the point before about the inevitable trend that will gather pace as regards eliminating the use of animal derivatives in devices going into human bodies. If it has not already occurred to the major US device manufacturers that their entire industry (worth $ multi-billions) which currently consists mostly of products sealed with animal derivative) will have to adopt specialty polymers, then it soon will. Elast-Eon is proven and now AOR/RUA are busy proving it up in new device developments of cardiovascular grafts, patches and heart valves.

[langland] 14/4/2020 11:36

SV,

Indeed. But at least the R and D side (which is where we will get the potential big pay day from) is relatively unaffected and the company is pressing on as quickly as possible with this.

[semper vigilans] 14/4/2020 11:13

Just as I thought things had settled.

[greedy rooster] 09/4/2020 09:33

That is correct. It also goes to show why AOR has decided to reinvent itself as a medical device co,in order to capture the value chain that is not realised through licensing Elasteon to third parties. The one thing that is becoming very clear however is the quality of Elasteon and how it has been under-sold in the past.

[nimbo10] 08/4/2020 12:19

Bones- completely agree. Working out revenue from this is not that much of relevance.

But the wider market for Elasteon and blood contact properties it represents for medical devices is far more important for wider adoption.

Aortech wanted to promote this and the Rua recent deal will certainly do this with their existing/new clients.

[bones] 08/4/2020 10:58

Nimbo10, I am in the dark on this kind of confidential commercial data but we were advised on 30th March that:

“....two of the Elast-Eon(TM) enabled devices that represent a large proportion of annual Elast-Eon(TM) demand are ECMO (extracorporeal membrane oxygenation) cannulae which are used to oxygenate a patient's blood when ventilation is not sufficient to assist in lung failure. AorTech is proud to be associated with these products which are helping the most critically ill Coronavirus patients....”

My understanding is that Aortech receives licence fees and royalties on the use of Elast-Eon within medical devices when those devices are manufactured and/or sold by the licensee. Quite what proportion of the selling prices relates to Elast-Eon and what percentage relates to royalties or fees, I do not know. I assume relatively small but if a large demand appears for these cannulae, that must work in Aortech’s favour.

You mention the cost of supporting a patient with ECMO cannulae but I would not think the hospital costs will figure in calculating the royalties. It could suggest though that the price of the devices is quite high and that would be relevant.

What may be of greater value here is the reputation and wider knowledge of the benefits of Elast-Eon in vital medical devices.

[nimbo10] 08/4/2020 10:28

If a ventilator helps the lungs, Ecmo dispenses with them entirely. It takes the patient’s blood supply and oxygenates it directly, giving the most severe cases breathing space, so to speak, to recover. The average cost of Ecmo treatment for one patient is £45,000



How much would Aortech be making from the Canula?

[bones] 04/4/2020 10:38

I am of the view that the RUA merger is important for relationships with majors in the US. Bill Brown and David Richmond went to California in February presumably with an idea that they would be merging already in play and I suggest had conversations with people to (1) ensure that RUA’s existing business with the main customers would be secure under the merger, and (2) promote a much more rounded outfit that is vertically integrated and can offer a wide range of services and products involving Elasteon and all that goes with it. I think that makes AOR/RUA a potential target down the line for a bigger but maybe midsized MedTech company to snaffle up in the right circumstances.

The deferment by David R was, I believe, a very good move as that buys a lot of time for AorTech/RUA on the financing and R&D side. This would fend off any opportunistic lowball approaches given the huge potential still on offer here. I still think we are in the foothills of the proverbial mountain.

[bones] 03/4/2020 20:47

Good spot nimbo10. The 50k looks definitive at 95p. The after hours one of 25k at 90 is harder to define as it seems to be a worked order not declared til late. Either way, it looks like there is good support here.

Today’s action was mostly small bed and isa switches by the look of the pairs that went through. It was the last trading day of the tax year so it was unsurprising to see some of these pass through.

[nimbo10] 03/4/2020 18:32

Looks like there was a 50k and 25k buys yest reported today?
Maybe that was one of drivers for move yest, anyway give good confidence.

[langland] 02/4/2020 14:35

RNS out reflecting the adjustment for increased number of shares in issue.

[langland] 02/4/2020 11:48

Nice to see some further recovery today. Perhaps more people have got round to reading the Equity Development update released the other day.

[bones] 01/4/2020 19:00

Significant ( > 3% )shareholders now updated in header to include David Richmond, CEO.

All the others in the list are shown with the same quantities of shares as reported in October 2019 but I suspect some of these are out of date by now given some of the violent moves and general selling there has been by retail investors since then. Maybe a few of the nominee groups like Walker Crips, AJ Bell, Hargreaves, etc will update their current interests following this adjustment, but a lot just don't seem to bother themselves with holdings RNS's on AIM :)

[bones] 01/4/2020 18:37

From "Scottish Business Insider" magazine:



"Irvine-based RUA Medical Devices and Dundee firm AorTech help make devices which could save patients

Ayrshire-based life sciences business RUA Medical Devices has resumed operations after two of its customers were deemed vital to saving coronavirus patients.

The Irvine firm had suspended production temporarily last week but reopened on Monday, with social distancing measures in place, after being designated as part of the critical supply chain for the healthcare sector.

Meanwhile, Dundee-based Aortech - which is in the process of buying RUA - has revealed that it is also playing a critical role in the Covid-19 supply chain. Its Elast-Eon polymer is used to make cannulas which are used to pump oxygenated blood into a patient’s body if their lungs stop working, even with a ventilator.

AorTech has struck a deal to delay half of its payment to David Richmond for the acquisition of RUA Medical Devices.

Richmond, who is already a non-executive director of AorTech and will become chief executive of the enlarged group following the £2.45 million takeover, has agreed to defer £425,000 of the £950,000 cash he will receive for up to two years. He will only receive a payment due in April 2021 if RUA generates a certain amount of cash in the year to 31 March 2021. The company is to be renamed RUA.

AorTech said the deal with Richmond would allow it to fund its research and development work in the year ahead. It added that conserving cash would also help it to weather any short-term disruption to trading caused by Covid-19.

The company said: “AorTech is proud to be associated with these products which are helping the most critically ill coronavirus patients.”

The firm added: “It is too early to quantify fully the impact of Covid-19 on the group’s business. The board is confident that the enlarged group is well equipped and operating in an essential industry to enable both AorTech and RUA to withstand this near-term uncertainty.”"

[bones] 01/4/2020 15:46

An impressive £15k worth bought by someone at 71p at lunchtime.

[bones] 01/4/2020 14:46

Well said, langland. I met David Richmond at the AGM last August and I was personally very impressed with his commercial drive, the way he spoke about the business and hearing his back story (With five generations of his family having worked in the fabrics sector I think I heard him say). He has himself run a number of successful enterprises coming through the fabric manufacturing sector, leading eventually to the specialist fabric-based medical devices that RUA is now expert in. Add to that RUA’s fast-improving knowledge of how to incorporate Elast-Eon into these devices, David Richmond and Bill Brown must now be inspired to drive this trailblazing company forward and educate the majors about the future!

[langland] 01/4/2020 14:10

Announcement of Mr. Richmond's new holding. I don't think anyone could argue that the BOD's and shareholders' interests are not aligned.

[landy90] 31/3/2020 12:48

Link below gives a bit of background on ECMO treatment for COVID-19, Elast-Eon is used in these devices

[edmonda] 31/3/2020 12:43

latest update post RUA acqustion is here:

[semper vigilans] 31/3/2020 12:36

I think we all do Bones!

[bones] 31/3/2020 12:14

SV, yes but he’s already taken 60% of the deal in shares, paying £1 to boot for each one! That gives him near enough 10% of the company and the risk that goes with that. He is well aligned now as a major shareholder and the CEO to grow this company strongly. I wish him every success!

[semper vigilans] 31/3/2020 10:59

Better to lend the company £425k then buy a few in the market, than for him to have converted the loan into more shares.

[bones] 31/3/2020 10:40

You drive a hard bargain, GR! Poor soul has just lent the company £425k :)

[greedy rooster] 31/3/2020 10:36

Wouldn't be surprised if Dave Richmond puts his hand in his pocket and buys shares shortly after completion. Would send a good message to the overlookers.

[langland] 31/3/2020 10:26

Good points well made.