Medical device company Creo Medical (CREO: AIM) has received a welcome boost on its first day of trading on AIM, as the stock gains approximately 5% to 80p. Investors are clearly upbeat despite the obvious risks.
The manufacturer of minimally invasive products, such as endoscopes equipped with a light and camera that are designed to access the gastrointestinal tract (GI). Endoscopes generally go down the throat and do not require invasive surgery, helping to cut down on lengthy hospital stays.
Creo has raised £20m at 76p per share giving it a market cap of £61.3m despite currently generating zero revenue.
Plans to change that, and hopefully move into profit, come in the form of new products, including a reusable energy platform to power surgical instruments. Called Croma, it is due to launch in Europe in the first quarter of 2017, with a release into the US market pencilled in for 2018, presuming all regulatory boxes get ticked.
It will also launch in Europe a disposable device, Speedboat, which treats colorectal cancer. Speedboat is claimed to be the first traditional scalpel, that can be used in conjunction with an endoscope, controlled using radio frequency and microwave technology. This is designed to make it easier for surgeons to complete difficult operations.
Creo’s challenge is to earn acceptance of its product range from surgeons and other medical professionals in the face of bigger device suppliers with better-known brands. With £20m odd cash the company has bought itself some time but progress will need to come quickly if it is to avoid the path of repeatedly tapping investors for more money.
