Creo Medical Group (CREO ) said it intends to raise around £35 million via a conditional placing at a price of 182.5p to accelerate the commercial roll-out of its product portfolio.
The medical device firm which is focused on the emerging field of surgical endoscopy expects to raise a minimum of £30 million by way of an accelerated bookbuild as well as up to around £5 million by way of an open offer, both at the same issue price of 182.5p per share.
The Company highlighted that the issue price of 182.5 pence represents a discount of approximately 3.8% to the trailing 30 day volume weighted average price of 189.7p.
The net proceeds from the fundraising are intended to be used by the Group to accelerate the commercial rollout of its products in the US, EMEA and the Asia-Pacific region.
Craig Gulliford, CEO of Creo, said: "These additional funds will be used to accelerate the commercial roll-out of our suite of patented electrosurgical devices powered by our CROMA Kamaptive Energy Platform technology, but also provide us with the means to develop this portfolio to allow full integration with some of the leading robotic surgery technologies.”
Creo also intends to utilise the proceeds to explore potential strategic acquisition opportunities as well as to develop its CROMA Kamaptive Energy platform technology to allow licence potential to be exploited, ‘specifically in relation to robotics potential,’ it noted.
Creo added that it will continue to develop its IP portfolio in areas such as electroporation, plasma sterilisation and other energy modalities within the CROMA platform; undertake clinical trials for Chinese and Japanese markets; and continue R&D to develop new devices.
Gulliford said Creo is now “well funded” as a result to continue to explore further strategic acquisition opportunities, continue its research & development progress for new devices and allow it to undertake the clinical trials necessary to target markets in China and Japan.
Shares in Creo Medical Group were trading 3.59% lower this morning at 194.75p.
To date, Creo Medical Group has developed a suite of patented electrosurgical devices, powered by Kamaptive, which enables bipolar radiofrequency energy and high frequency focused microwave energy to be delivered to its devices via a single accessory port.
Creo’s Speedboat device technology, the first device launched by Creo along with CROMA with EU and US clearance, has been used in numerous clinical cases worldwide, is supported by excellent clinical publications, and with strong health economic data already established.
There are c.28 million colonoscopy procedures performed annually in the US and Europe which result in c.5.5 million procedures to remove lesions. Up to 15% (around 800,000) of these procedures are complex lesions which would, the Directors believe, benefit from the use of the Company's Speedboat device and a Speedboat submucosal dissection procedure.
The Company’s MicroBlate Flex device, which was designed with the aim of being able to ablate nodules and tumours in several tissue types including lung, received 510(k) clearance from the US Food & Drug Administration in January 2021 and was CE marked in June 2020.
The Board estimates that each year there are over 754,000 cases that would have the potential for non-surgical treatment of early stage (1 or 2) disease with earlier screening increasing detection rates and thereby increasing the number of potential procedures.
As a result, the company believes that via the MicroBlate Flex device, it may be possible to manage advanced disease by addressing recurring or localised small lesions.
The Board said it believes that there is ‘a significant and growing market opportunity’ for its suite of products. To date, it has trained 150 clinicians with more than 30 hospitals.
‘There are more than 50 CROMA boxes currently in situ and the Board is targeting having over 2000 customers with 500 Power Users (a user who performs at least two procedures per week) within 3-5 years with the potential to create a £40-50 million business,’ it explained.
It also believes that there is the scope to create future instruments for use with CROMA which can be evolved to deliver existing and new energy frequencies and modalities including electroporation, for a range of laparoscopic, robotic, surgery and other open-source devices.
In a trading update back in May 2021, Creo said it was performing above management's expectations, generating revenue in excess of £12 million in the 6 months to 30 June 2021 with the Company's cash balance as at 30 June 2021 being in excess of £30 million.
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