AorTech International PLC Trading Update (6925M)

TIDMAOR

RNS Number : 6925M

AorTech International PLC

13 May 2020

AorTech International plc

("AorTech", the "Company" or the "Group")

Trading Update

AorTech International plc (AIM: AOR.L), the holding company of a group of medical device businesses focused on the exploitation of the world's leading long-term implantable biostable polymer (Elast-Eon (TM) ), is pleased to provide the following trading update ahead of the publication of the Group's audited final results for the financial year ended 31 March 2020, which are expected to be released in the second half of July 2020.

Highlights:

   --        Growth in polymer licensing and royalty revenue from GBP463k to GBP490k 
   --        Strong cash position of GBP2.0 million as at 31 March 2020 (2019: GBP2.4 million) 
   --        Research and Development activities currently exceeding the Board's expectations 
   --        Integration of RUA Medical Devices Limited progressing to plan 

Bill Brown, Chairman of AorTech, commented : "Over the past two years, AorTech has been transitioning into a medical device manufacturer, progress with all elements of the Research and Development projects has been positive and I am confident that the recent acquisition of RUA Medical will help accelerate these new product projects over the next year."

David Richmond, CEO of AorTech, added: "In the short time since the combination of AorTech and RUA, the focus on new product development has already produced results. We look forward to further positive steps in the coming months. Regarding the impact of COVID-19 on the RUA Medical business, we continue to monitor the opening of elective surgery in the US and are well positioned to recommence supply to meet customer orders."

2019-2020 Overview

The Group's strategy remains to develop medical devices based upon the world class properties of AorTech's polymers whilst continuing to license the rights to those same polymers in non-competing areas. The polymer licensing business has continued to progress over the past year and revenues grew from the GBP463,000 reported last year to GBP490,000 in the year ended 31 March 2020. Investment in Research and Development increased over the year and, despite this additional investment, the Company's year-end cash resources (including monies in solicitors client accounts for the completion of the acquisition of RUA Medical) stood at GBP1.98 million compared to GBP2.4 million at the same stage last year representing cash burn of a little over GBP400,000 during the year. Currently, Group cash balances stand at over GBP1.7 million.

Shortly after the period end, AorTech completed the acquisition of RUA Medical Devices providing the Group with the people, premises and processes required for the Group to become an end to end medical device developer and manufacturer. The Board remains very confident that the strategic benefits of this acquisition far outweigh any short term COVID-19 issues that the business may be facing. The integration of the RUA business is progressing to plan.

Heart Valve Development Update

In January, AorTech announced that it had committed investment in a novel method of manufacturing polymeric heart valves. In early April, the Company also announced good progress had been made with the tooling for this project. We are now delighted to announce that the manufacture of valves has been undertaken and early prototype valves are currently available for evaluation. The outcome of these manufacturing trials has far exceeded our initial expectations and the feasibility of the novel manufacturing concept has now been proven.

The valve design and manufacturing method are both major improvements and the Board believes that the combination has produced one of the largest step changes in heart valve technology over the last 20 years.

All of the limitations imposed by historic methods of dip casting valve leaflets, and the quality issues related to those designs and manufacturing methods, have been eliminated. AorTech has already engaged with its IP advisers to initiate the steps required to protect this valuable new Intellectual Property.

Graft Development Update

The team at RUA Medical has been working closely with members of the AorTech Board and progress has been made on the Elast-Eon (TM) coated large bore grafts.

Further enhancements have been made to the Polyester fibre, the textile construction refined, and an automated coating process developed. These developments will allow the external graft surface to be coated with Elast-Eon (TM) polymer whilst retaining the mechanical performance, handling and suturing characteristics required by surgeons.

As well as these encouraging developments, the RUA team has also developed a method of being able to manufacture a one-piece Elast-Eon (TM) polymer coated Aortic Root graft.

Overall, graft developments are swiftly approaching the design freeze phase and animal trials are still anticipated to be undertaken during the second half of the year.

For further information contact:

AorTech International plc

   Bill Brown, Chairman                                                    Tel: [phone] 
   David Richmond, CEO                                                  Tel: [phone] 

Shore Capital

   Tom Griffiths/David Coaten                                          Tel: [phone] 

About AorTech

AorTech has developed biostable, implantable polymers, including Elast-Eon(TM) and ECSil(TM), now manufactured on its behalf by Biomerics LLC in Utah, USA. Elast-Eon(TM) and ECSil(TM)'s biostability is comparable to silicone while exhibiting excellent mechanical, blood contacting and flex-fatigue properties. These polymers can be processed using conventional thermoplastic extrusion and moulding techniques. With over 6 million implants and over 10 years of successful clinical use, AorTech polymers are proven in long term life enabling applications.

In addition to continuing to exploit AorTech's Intellectual Property related to the world class biomaterial - Elast-Eon(TM), AorTech is now incorporating this material into a number of medical devices of our own design. Elast-Eon(TM) has first class long term blood contacting properties and, as a result, all of the initial products being developed are for the cardio vascular field. Each device is being designed to have improved clinical outcomes over current device technology, eliminating the use of animal sourced material whilst allowing procedures to remain the same, therefore avoiding having to retrain surgeons in new ways of operating.

About RUA Medical Devices

RUA Medical is an experienced full-service medical device contract developer, contract manufacturer and implantable fabric specialist. The company provides subcontract design, development, manufacture, assembly, packing, inventory management, logistics and consultancy services to the Medical Device and Biotech Industries. The company partners with globally based companies to provide technologically innovative products that can deliver lifesaving and life enhancing solutions, and focuses on personalised service, combined with innovative design and development.

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact [e-mail] or visit www.rns.com.

END

TSTUUSNRRKUVAAR

(END) Dow Jones Newswires

May 13, 2020 02:00 ET (06:00 GMT)