-Multi-year agreement with Intuitive Surgical

-Significant commercial opportunity

-Current year off to strong start

Minimally invasive electrosurgical devices company Creo Medical (CREO:AIM) provided a positive update on results to December 2021 and announced a collaboration with the world’s leading surgical robotics company.

Creo Medical has signed a multi-year agreement with US listed Intuitive Surgical (ISRG:NASDAQ) (market cap around £63 billion) which allows the US company to optimise certain Creo products to be compatible with Intuitive’s robotic technology.

The agreement provides a framework to allow joint clinical studies to be made which includes various milestone payments to be made to Creo Medical. Future royalty payment structures have also been agreed. Investors welcomed the news with the shares gaining 4.7% to 100.5p.

SIGNIFICANT DEAL

Healthcare analyst at Numis Paul Cuddon commented: ‘This is an important deal, that provides a route to a further significant commercial market that is complimentary to surgical endoscopy.’

Chief executive of Creo Medical Craig Guliford said: ‘The combination of Intuitive’s robotic platforms and our Kamaptive Technology strives to provide patients with additional treatment options using state-of-the-art technology.’

STRATEGIC PROGRESS

The company successfully integrated the Albyn Medical and Boucart Medical acquisitions during the year with both businesses now operating under the Creo Medical brand.

The acquisitions bring an ‘extensive’ European sales force which is well equipped to sell Creo products across the continent. They were the main driver of revenues which increased to £25.2 million from £9.4 million last year.

A step-up in research and development and commercialisation activities saw the company report an operating loss of £29.9 million compared with £23.5 million in 2021. On an adjusted basis the loss was £19 million.

Creo ended the period with net cash of £43.5 million which includes £34.3 million raised via an open offer and placing during the year.

POSITIVE OUTLOOK

The company said 2022 had started positively with ‘strong performance’ from the core product portfolio. Paul Cuddon highlighted the potential for more collaborative agreements.

He added, ‘Creo has signed multiple Heads of Terms deals, which we expect to further broaden the potential across robotics, laparoscopic and plasma sterilisation markets.’

Cuddon is forecasting operating losses to remain around £20 million over the next two years but sees potential for the business to generate revenues over £100 million by 2028, by which time ‘significant operating leverage from recurring device sales should manifest’.

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Issue Date: 23 May 2022