Lombard Medical Technologies PLC Pre-Close Trading and Strategic Update (1345X)

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RNS Number : 1345X

Lombard Medical Technologies PLC

08 January 2014

Lombard Medical Technologies PLC

("Lombard Medical" or "the Company")

Pre-Close Trading and Strategic Update

Global Aorfix(TM) growth; US rollout progressing well

Intention to pursue a US IPO and NASDAQ listing of ordinary shares

London, UK and Irvine, CA, 8 January, 2014 - Lombard Medical Technologies PLC (AIM: LMT), the specialist medical device company focused on Endovascular Aortic Repair ("EVAR") of abdominal aortic aneurysms ("AAAs"), announced today a pre-close trading update for the financial year ended 31 December 2013 as well as a strategic update. All figures are unaudited.

Trading Update

Aorfix(TM) commercial revenue grew 25% to GBP3.9m with revenue from the main EU markets growing 9%. Revenue from the Rest of World ("ROW") markets grew 28% and the US contributed to fourth quarter Aorfix commercial revenue growth of 38% following formal launch in November. In Europe, the Company experienced strong demand and revenue growth in Germany and Spain. Following consolidation of EVAR centers in the UK, which negatively impacted UK revenue in the first half of 2013, second half 2013 Aorfix revenue in the UK recovered and was flat compared to the same period the previous year. Total Company revenue grew by 14% to GBP4.5m, reflecting a decline in revenue of the recently divested OEM business in Scotland which fell by 27% compared to last year. As previously announced, this business was divested on 20 December 2013.

Aorfix was approved by the United States Food and Drug Administration ("US FDA") in February 2013 with a unique label indication for the treatment of patients with angulations at the neck of the aneurysm up to and including 90 degrees. The product was formally launched in the US, the largest EVAR market, at the 40(th) Annual VEITH Symposium, in New York in November. While Aorfix is still in the initial phase of the US launch, the product rollout is progressing well, with the number of US physicians trained to use the device standing at 244 at the year end. As previously disclosed, the Company's 20-person sales team is targeting around 300 high volume EVAR centers that perform more than half of the EVAR procedures in the US.

In Japan, the Company now anticipates regulatory approval for Aorfix during 2014. Our exclusive Japanese marketing partner, Medico's Hirata, remains in dialogue with the Pharmaceuticals and Medical Devices Agency (PMDA) to achieve this. Medico's Hirata is a leading supplier of medical device products in Japan, with the sales infrastructure to realize the potential of Aorfix in this growing market, which in 2013 was estimated to account for approximately $140m or 10% of the global EVAR market.

As previously announced, the Company is expanding its manufacturing facility in Didcot, Oxfordshire, to support increasing global demand for Aorfix. The expansion, which involves the construction of a new cleanroom and materials handling space, will add around 10,000 sq. ft. to the existing facility. The expansion project is expected to be completed by the end of the first quarter of 2014.

The global AAA market for EVAR devices is estimated to be approximately $1.4bn. The US market is estimated to be worth around half of the global market and is expected to grow at a compound annual growth rate in excess of 7% over the next 5 years, driven largely by the growth of the ageing population and patient screening programs. In addition, introduction of new technologies such as Aorfix, which allow more patients to received endovascular treatment of AAA disease, could potentially further expand the market.

The Company closed 2013 with cash of GBP24.8m and debt of GBP1.5m on its balance sheet.

NASDAQ IPO

As announced today in a separate press release, the Company intends to submit a registration statement to the US Securities and Exchange Commission ("SEC") relating to a proposed US initial public offering of ordinary shares and a listing on NASDAQ ("NASDAQ IPO").

To facilitate the NASDAQ IPO, a new Cayman Islands holding company will be created and existing shares in Lombard Medical will be exchanged for new shares in that holding company ("Share Exchange")

Commencement of the initial public offering is conditional upon completion of the SEC review process with respect to the registration statement and is subject to market conditions and other considerations. In connection with the NASDAQ IPO, Lombard Medical will also delist its ordinary shares from AIM, a market of the London Stock Exchange.

In the Share Exchange, existing shareholders will receive shares in the new Cayman Islands holding company in exchange for the shares they hold in Lombard Medical. These new shares will not be admitted to trading on AIM. Shareholders will need to consider their ability to hold and trade NASDAQ listed shares following the Share Exchange and the AIM delisting. Full details of the proposals will be set out in a circular to shareholders in due course.

Lombard Medical intends to use proceeds from the NASDAQ IPO to accelerate its commercialization strategy for Aorfix in the US with a particular focus on continuing to expand its direct sales force to accelerate penetration of the US AAA market. The Company will also continue to invest in developing new products to treat complex vascular disease, including a stent graft to treat aneurysms in the thoracic aorta.

This press release does not constitute an offer of any securities for sale.

-Ends-

For further information:

 
 Lombard Medical Technologies PLC           Tel: [phone] 
 Simon Hubbert, Chief Executive Officer 
  Ian Ardill, Chief Financial Officer 
 
 Canaccord Genuity Limited                  Tel: [phone] 
  Lucy Tilley / Tim Redfern / Henry 
  Fitzgerald O'Connor / Dr Julian Feneley 
 
 FTI Consulting (UK)                        Tel: [phone] 
  Simon Conway / Stephanie Cuthbert 
  / Victoria Foster Mitchell 
 
 Allen & Caron (US)                         Tel: [phone] 
  Matt Clawson 
 

About Abdominal Aortic Aneurysms

AAAs are a balloon-like enlargement of the aorta which, if left untreated, may rupture and cause death. Approximately 4.5 million people are living with AAAs in the developed world and each year over 500,000 new cases are diagnosed. In the US, aortic aneurysm disease is among the leading causes of death and it is estimated that 1.7 million people over the age of 55 have an abdominal aortic aneurysm.

About Lombard Medical

Lombard Medical Technologies PLC (AIM: LMT) is a medical device company focused on device solutions for the $1.4 billion per annum abdominal aortic aneurysm ("AAA") repair market. The Company's lead product, Aorfix, is an endovascular stent graft which has been specifically designed to solve the problems that exist in treating complex tortuous anatomy, which is often present in advanced AAA disease. Aorfix is the only stent graft approved for AAA neck angulations of up to 90 degrees and is currently being commercialized worldwide. Aorfix is the first AAA stent graft not of US origin to gain US FDA approval. The Company is headquartered in Oxfordshire, England with US operations in Irvine, CA.

Further background on the Company can be found at www.lombardmedical.com.

FORWARD-LOOKING STATEMENTS

This announcement may contain forward-looking statements that reflect the Company's current expectations regarding future events, including the commercialization and regulatory clearance of the Company's products, the Group's liquidity and results of operations, as well as the Group's future capital raising activities. Forward-looking statements involve risks and uncertainties. Actual events could differ materially from those projected herein and depend on a number of factors, including the success of the Company's research and development and commercialization strategies, the uncertainties related to the regulatory process and the acceptance of the Company's products by hospitals and other medical professionals.

This information is provided by RNS

The company news service from the London Stock Exchange

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