AorTech International PLC Further Update re COVID-19 (5605J)
14 April 2020 - 7:27PM
UK Regulatory
TIDMAOR
RNS Number : 5605J
AorTech International PLC
14 April 2020
14 April 2020
AorTech International plc
("AorTech" or the "Company")
Further Update re COVID-19
Late last week, RUA Medical Devices Limited ("RUA"), the
Company's wholly-owned subsidiary, received communications from its
largest customer that, due to US Government (both federal and
state) mandates to suspend all elective surgery in hospitals and
surgical centres throughout the United States, it was temporarily
unable to provide forecasts and orders for the medical devices
manufactured for it by RUA. The boards of both RUA and AorTech have
therefore implemented their contingency plans to minimise the
impact of this temporary disruption and have now placed a number of
both production and administrative staff at RUA on furlough.
Sufficient production staff have been retained at RUA to allow
the current order book to be fulfilled within agreed timelines, but
full production will not resume until new orders are received,
which is unlikely to be until the temporary suspension of elective
surgery has been lifted in the US.
Financial Resources
The steps taken to furlough a number of employees coupled with
strict control of overheads will add to the contingency measure
previously taken to defer part of the consideration paid for the
acquisition of RUA. These actions provide the boards of both RUA
and AorTech with comfort that the Group can ride out the COVID-19
disruption and continue its Research and Development efforts. The
Group is well funded and has cash resources to weather a short-term
disruption in demand from its major customer. Nevertheless, to
further preserve cash and "share the pain" with the furloughed
employees, the Board has agreed to a reduction of 20 per cent. in
both fees and salaries during this period of lock down.
Research and Development
The team responsible for the development of the Company's
patches and grafts projects has been retained and its focus remains
on bringing these products to market in line with the Company's
current timelines. Recent developments on these projects have been
very encouraging with both a step change in the design of the
textile substrates and a major development in the Elast-Eon(TM)
coating technology which through utilising a fully automated
process allowed Elast-Eon(TM) to be deposited on the exterior of
the graft without interfering with the internal lumen. Regulatory
testing of the new graft is still anticipated in the second half of
this year and the animal trials, in particular, are designed to
demonstrate the grafts' performance targets of providing good
surgical feel and natural healing without having to rely upon
animal sourced material for initial sealant. The Board believes
that eliminating animal derived products will become increasingly
important to patients, clinicians and regulators in next generation
devices.
Similarly, good progress continues on the Heart Valve project
despite some COVID-19 related delays. The tooling for the heart
valve frames is almost complete and the tooling for the leaflets is
nearing completion. We have taken delivery of the key raw materials
for valve manufacture and anticipate manufacturing trials to
commence during May 2020.
It is still too early to quantify fully the impact of COVID-19
on the Group's business. However, to re-iterate earlier statements,
the Board is taking prudent steps to mitigate risk and manage its
cashflow. The Board is confident that the enlarged Group is well
equipped to enable both AorTech and RUA to withstand this near-term
uncertainty and anticipate the interruption to the order cycle to
be temporary and will start to return to nearer to normal levels
once restrictions on elective surgery in the US are lifted.
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(TM) and ECSil(TM), now manufactured on its behalf by
Biomerics LLC in Utah, USA. Elast-Eon(TM) and ECSil(TM)'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(TM),
AorTech is now incorporating this material into a number of medical
devices of our own design. Elast-Eon(TM) 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.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
FURFIFFASEISLII
(END) Dow Jones Newswires
April 14, 2020 05:27 ET (09:27 GMT)
Rua Life Sciences (LSE:RUA)
Historical Stock Chart
From Apr 2024 to May 2024
Rua Life Sciences (LSE:RUA)
Historical Stock Chart
From May 2023 to May 2024