Creo Medical Share Price (CREO)

Main competition is listed here (UK at least)

https://www.supplychain.nhs.uk/product-information/contract-launch-brief/oncology-ablation/

This also shows competitors from a GI perspective, although slightly outdated. I believe GI is much larger market than lung:

https://www.ncbi.nlm.nih.gov/pmc/articles/PMC5992954/

One USP for CREO device is the application of the energy is more predictable and uniform in comparison to competitors. As I understand, the ablation is more cylindrical and volume correlates to duration better than competitor devices. Another is the broad suite of products they offer across the entire platform.

In relation to the high upfront cost of the CROMA generator, they may well have offered it on loan in the past, not sure if they still do or whether they now charge full price.

It is concerning about training uptake given figures quoted. I’d also be interest in understanding why. I think this has been an issue in the past. Must be a reason… I follow them on LinkedIn and there are frequent posts about new users being trained in new markets.

The kit is in my mind undoubtedly better than whats out there. Key competitor is Erbe ( https://uk.erbe-med.com/uk-en/)

So far the clinical data suggests less collateral damage due to the bipolar energy being more focused (this is mentioned in the Baillie Gifford vid). It also doesn't produce any smoke. I did wonder if this is much of an issue, and you can see from the smoke extractor on the front page of Erbe website - so it obviously is. Obviously we know they haven't sold many so the data is limited. The reasons for this in my mind are

1) There is only limited amount of data so far so benefits not yet known for many procedures (we can assume POEM ops are better). They are working on this - getting NICE approval will help and the lung trial will be important

2) The market is very conservative. "I've been using the same kit for 15 years and I'm comfortable with it and the outcomes are already quite good". This is hard to get over

3) There is a cost of the croma box - this may need to be capital spend that could take a while.

4) Operators need training. This is one of my concerns. In the last RNS they said they had doubled the amount of training centres but in the 6month period they had only added 25 users. One a week. I'd like to know more about why that is - are they going on the training course and not impressed? Have we lost users? Looking at the 2023 forecast I think they said they would train 200 this year - so 25 in H1 leaves 175 to do in H2. Thats not going to happen and a huge miss. Could be many reasons for this. If there is an investor meet its a question I'd ask.

So reasons to be optimistic? Currently the Intuitive Ion system can not do treatments it can only take samples. So if the lung trials go well this could be really beneficial for them as it will sell more robots.

There other clinical data will hopefully be available in a reasonable timeframe

Assuming the sale of the consumable system completes, funding shouldn't be an issue.

Sales were very underwhelming, and they have yet to prove they can move from R&D to commercial . Lets hope they can.

The platform of devices are no doubt a success but there are a few issues delaying sales volume. Creo have a presence in the US but most of the recent news centres around the NHS. The UK market is very small compared to US and EU. The NHS is fragmented and uptake in one trust doesn’t necessarily mean uptake across the board. Sales will no doubt rise but not as quickly as they should on an ideal world. The outcomes of the procedures for patients are better (quicker, better results, less invasive…) plus the costs are significantly reduced. There are no real negatives, just the uptake. CREO are a relatively small company in comparison to the big Medical Device manufacturers who have the reach to speed this process up. The long and expensive regulatory approval process has been done. It’s now just a waiting game for sales volumes. That’s my humble option having worked in the industry for 25 years.

It is an attractive sounding product, especially for those unfortunate enough to need the treatment. So why the delay in meaningful take up?

Any medical people following this who can share an industry view?

https://www.bailliegifford.com/en/uk/individual-investors/insights/ic-article/2024-q3-trust-49-creo-medical-at-the-spearhead-of-surgery-10049581/

I cannot see this stock getting lower now, however I can see it drifting in the high 20s unless they get their finger out and achieve some worth while sales.

What puzzles me is, are those who stumped up the extra £12m suckers or is there better news few know about?