11 Oct 2019 07:00
AorTech International plc
("AorTech", the "Company" or the "Group")
Trading Update
AorTech International plc (AIM: AOR.L), the licensor of the world's leading long-term implantable biostable polymer (Elast-EonTM) and developer of medical devices utilising the key properties of Elast-EonTM, is pleased to provide the following update for the six months ended 30 September 2019:
Highlights:
·; Cash at 30 September 2019 remains strong at £2.3 million (31 March 2019 - £2.4 million)
·; Project Manager recruited with part funding from Scottish Enterprise
·; Major improvements in heart valve design
·; Heart valve manufacturing planning well advanced
·; Clean rooms built and completed allowing graft manufacturing to commence
·; Confirmation of commercial opportunities from Medical Device industry
Bill Brown, Chairman of AorTech, commented: "Since implementing our strategy of transitioning AorTech to a medical device company, much effort was spent in laying the foundations to deliver life-changing medical devices. These foundations are now being built upon and progress is strong; the latest design of the heart valve is a major step forward and, on some measurements, test results are two to three times better than from earlier designs. With new cleanroom facilities having been completed at RUA Medical, trial manufacturing of the grafts is now underway. We have managed cash very carefully with the net cash burn over the six months to September 2019 being only £100,000."
For further information contact:
AorTech International plc Tel: +44 (0)7730 718296
Bill Brown, Chairman
Shore Capital Tel: +44 (0)20 7408 4080
Tom Griffiths/David Coaten
About AorTech:
AorTech has developed biostable, implantable polymers, including Elast-Eon™ and ECSil™, the world's leading long-term implantable co-polymers, now manufactured on its behalf by Biomerics LLC in Utah, USA. Elast-Eon™ and ECSil™'s biostability is comparable to silicone while exhibiting excellent mechanical, blood contacting and flex-fatigue properties. These polymers can be processed using conventional thermoplastic extrusion and moulding techniques. With over 6 million implants and over 10 years of successful clinical use, AorTech polymers are proven in long term life enabling applications.
In addition to continuing to exploit AorTech's Intellectual Property related to the world class biomaterial - Elast-Eon™, AorTech is now incorporating this material into a number of medical devices of our own design. Elast-Eon™ has first class long term blood contacting properties and, as a result, all of the initial products being developed are for the cardio vascular field. Each device is being designed to have improved clinical outcomes over current device technology, eliminating the use of animal sourced material whilst allowing procedures to remain the same, therefore avoiding having to retrain surgeons in new ways of operating.
Cash Management
AorTech enjoys licence income from its polymer portfolio which generates cash, but is expending those resources by undertaking Research and Development on three novel medical devices. A lean business model has been adopted to allow this R&D to be achieved in a cost-effective manner and cash management is key to the business. At its year end on 31 March 2019, AorTech had cash balances of a little over £2.4 million and it is pleasing to report that, despite funding the R&D efforts over the six months to 30 September 2019, cash was maintained at £2.3 million.
Project Management
With the progress being made with our partners in developing the heart valve and textile-based products, the Board decided to accelerate our recruitment plans for further in-house expertise. We are therefore delighted to welcome Dr Sarah Grant as Project Manager - New Product Development. Sarah is a PhD polymer chemist and has previous medical device expertise. Sarah will work closely with and co-ordinate our partners at RUA Medical, VFT, Biomerics and Compliance Solutions. We are also pleased that the costs of employing Sarah have been part funded by Scottish Enterprise and express our gratitude for this support.
Textile Products
Our partner, RUA Medical, has recently completed the construction and fit out of two new clean rooms that will be used to manufacture AorTech's vascular grafts and soft tissue patches. Trial manufacturing is currently being undertaken and the anticipated teething problems with the fabric R&D are being tackled as they arise with both the yarn and machine set. Progress is being made in the fabric quality and equipment for graft crimping has been designed, built and programmed to allow automation of the coating process.
A novel coating technology has been identified and trialled. We anticipate having crimped and coated prototypes in the next 6 to 8 weeks.
We recently attended a major European Cardio Thoracic meeting at which we had the opportunity to meet not only leading surgeons, but with major medical device companies and key distributors. Our products and plans were met with a good deal of enthusiasm and we are very much encouraged by the commercial opportunities that will arise once we have regulatory approvals.
Heart Valve Development
Substantial progress has been made over recent months on the design of the polymeric heart valve.
Previous generations of the design showed promise in both bench testing and animal testing demonstrating the potential to have a durable valve that did not calcify and was non-thrombogenic. The valve was however compromised as a result of the limitations of the manufacturing process and the mechanical properties of the specific version of Elast-EonTM used in the manufacture. Additionally, the Finite Element Analysis model used misstated the maximum leaflet stresses due to the mesh being poorly designed.
Recent key achievements have included:
·; Closure and sealing of the valve improved with a marked reduction in regurgitation
·; Overall stress on leaflet substantially reduced and maximum stress is down by 50%
·; Mesh quality increased by a factor of 4
·; A new softer material identified with improved elasticity without compromising on strength
·; Changes to leaflet geometry to improve durability
·; A design for manufacture (DFM) project currently underway to develop the tooling that will allow a highly consistent valve to be made both faster and cheaper.
AorTech has noted the progress made by certain former employees in achieving "first in man" with a polymer valve. We view this development positively, as a regulatory pathway has now been established for polymeric valves and testing protocols agreed. This provides us with confidence that our valve will have similar success, especially as a result of the recent improvements in design referred to above.
A further update will be provided at the time of the release of the Company's unaudited interim results for the six months ended 30 September 2019, which is expected to be in late November 2019.