Deltex Medical Regulatory News (DEMG)

Deltex Medical Group plc

("Deltex Medical" or "the Company")

Deltex Medical and Uscom Limited enter distribution agreement

28 January 2014 - Deltex Medical Group plc, the global leader in oesophageal Doppler monitoring ("ODM"), announces that it has entered into a marketing and distribution agreement with Uscom Limited ("Uscom"), the Australian company that manufactures and markets the non-invasive Doppler ultrasound cardiac output monitor, the USCOM1A.

The three year non-exclusive agreement means that Deltex Medical will market the USCOM1A in the UK with immediate effect as well as introducing it into its wider distribution channels over the coming months. Uscom will in turn introduce Deltex Medical's CardioQ-ODM products into its own distribution channels.

The USCOM1A is used primarily in adult and paediatric critical care medicine and has emerging evidence of applications in management of both heart failure and sepsis. It is sold on a single capital sale basis; whereas the majority of CardioQ-ODM revenues are generated from sales of single patient disposable probes for use in major surgery and sedated critical care patients. While Deltex Medical's business is weighted towards the UK, Europe and North America, Uscom's is stronger in Asia and Australasia where adoption of CardioQ-ODM is at an early stage.

Ewan Phillips, Chief Executive of Deltex Medical, commented:

"Uscom and Deltex Medical have identified opportunities to sell their complementary technologies to their respective existing customer bases. This partnership expands the breadth of each company's clinical offering and allows both companies to further differentiate the strengths of Doppler ultrasound haemodynamic monitoring and measurement."

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Notes for Editors

For further information on Uscom and the USCOM1A see www.uscom.com.au.

Deltex Medical manufactures and markets CardioQ-ODMÔ Oesophageal Doppler Monitoring ('ODM') systems. ODM is the only therapy to measure blood flow in the central circulation in real time. Minimally invasive, easy to set up and quick to focus, the technology generates a low-frequency ultrasound signal, which is highly sensitive to changes in flow and measures them immediately. Randomised, controlled trials using Doppler have demonstrated that early fluid management intervention will reduce post-operative complications, reduce intensive care admissions, and reduce the length of hospital stay.

The CardioQ-ODM has two distinct established clinical applications: firstly, to guide fluid management during surgery and secondly, to monitor cardiac output in critical care settings.

Surgical market

In March 2011 the National Institute for Health & Clinical Excellence ('NICE') recommended that CardioQ-ODM be considered for use in patients undergoing major and high risk surgery and in high risk patients undergoing intermediate risk surgery. NICE estimated the applicable number of such patients in the NHS in England alone to be over 800,000 each year. CardioQ-ODM has been shown to be effective in both elective and emergency surgery and with both general and regional anaesthetics. This recommendation was specific to CardioQ-ODM and was based on the robust evidence base that supports its use.

Subsequent to the NICE guidance, the NHS in England announced its selection of ODM as a high impact innovation to be rolled out across the system fully, at pace and scale with significant financial penalties starting in the NHS 2013/14 financial year ending 31 March 2014.

The NICE evaluation and recommendation confirms that the potential global market for CardioQ-ODM in surgery includes tens of millions of patients, even if confined to developed health economies: the most conservative estimate of the potential value of the market opportunity Deltex Medical has created is in excess of £1 billion per annum. The Company's core focus is on building market leading positions in this surgical market, both geographically and by type of surgery.

Critical care market

In critical care settings, well-equipped hospitals will often have more than one cardiac output monitoring technology available. In this environment, ODM's strengths are that it is quick to set up, easy to use, safe, low cost and the ideal technology for a patient in crisis requiring rapid or frequent intervention. The potential market for cardiac output monitoring in critical care is a fraction of the size of that for intra-operative fluid management.

Through the 2012 launch of the CardioQ-ODM+, Deltex Medical has added the Pulse Pressure Waveform Analysis ('PPWA') approach to monitoring cardiac output to ODM functionality. Doing this has improved Deltex Medical's offer for monitoring applications as well as providing doctors and nurses with a choice of clinical strategies appropriate to individual patients in different clinical settings.

Company goal

Our goal is to make oesophageal Doppler monitoring (ODM) a standard of care for patients in both these markets. We believe that, in most modern health systems, it is essential to have a robust evidence base of both clinical benefit and cost effectiveness in order to achieve system-wide adoption of a new medical technology. Deltex Medical is one of the very first medical technology companies to have completed the investment necessary to build such an evidence base: as a result, use of ODM during surgery has the proven potential to deliver both clinical and economic benefits that are material at each of patient, hospital and system level.

The Company is currently in the implementation phase of achieving this goal in a number of territories worldwide and there are already over 2,800 CardioQ-ODM systems in use in hospitals worldwide. Distribution arrangements are in place in over 30 countries.