20th Mar 2020 18:04
(Alliance News) - Creo Medical Group PLC on Friday said that the clinical education programme for its Speedboat surgical endoscopy device has been slowed down by policies put in place to slow the spread of Covid-19, hurting short-term revenue.
However, while revenue from the early uptake of the device is expected to be lower short term - hurt by "ongoing travel restrictions and social distancing policies" - earnings before interest, tax, depreciation, and amortisation and cash will likely be better than expected as a result of savings.
Following its December fundraising, Creo had cash reserves of GBP77.6 million at the end of February, "more than sufficient to secure the business activities and staff through the current situation and beyond".
Creo has cancelled or postponed all of its training and mentoring events in the US, EU, and UK. The number of new procedures and elective cases is expected to fall worldwide and the number of endoscopists trained in the use of Speedboat - despite online training and remote mentoring - will be lower than forecast for the year,
"The board believes that the outlook for the medium and long term remains very much unchanged, and will not be impacted by a short term slowdown in the early market development. Six months ago the business had a single cleared device for human use in multiple markets. As the world begins to emerge from the Covid-19 restrictions the business will have multiple devices cleared for multiple markets across the EU and US. This will allow the company to introduce these devices into clinical practice once Covid-19 related restrictions are eased," said Creo.
Despite the currently restricted opportunities fro market development in the near-term, Creo said it is still focused on its wider flexible endoscopy portfolio. Its submissions in the hands of the US Food & Drug Administration and device clearances for the US market and elsewhere are still on track.
Chief Executive Craig Gulliford said: "Whilst Covid-19 will have a short term impact on the roll-out of our clinical training programme, the medium and longer term prospects for our business remains undiminished. We have a very strong cash position offering us the security needed to gain regulatory clearances and to successfully commercialise our wider range of endoscopic surgery products."
Shares in Creo closed 10% higher at 110.00 pence each in London on Friday.
By Anna Farley; [email protected]
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