OXFORDSHIRE, U.K.--(BUSINESS WIRE)--Oct. 31, 2017--
Lombard Medical, Inc. (NASDAQ: EVAR), a medical device company focused
on endovascular aneurysm repair of abdominal aortic aneurysms (AAA),
today reported unaudited year-to-date financial results for the first
nine months ended September 30, 2017.
2017 Operational Highlights
-
Appointment of Kurt Lemvigh as CEO, April 2017
-
Appointment of Richard Peace as Finance Director, May 2017
-
Appointment of Jonathan Hornsby as Vice President, Sales & Marketing,
August 2017
-
Signing of definitive agreements related to its strategic partnership
with Shanghai-based MicroPort Scientific Corporation (HK: 0853), a
leading global medical device manufacturer. In addition to the $15
million investment into Lombard in December 2016, the agreement
includes MicroPort manufacturing certain Lombard product components
and exclusive marketing rights for Lombard’s product portfolio for
China and Brazil.
-
Regulatory approval in Japan for the Company’s new IntelliFlex™ LP
delivery system for Aorfix™ and the successful launch in Japan in
August 2017.
Kurt Lemvigh, Chief Executive Officer, said, “New products, strategic
partnerships and a focus on operational efficiencies are contributing to
the successful ongoing restructuring of our business. Our collaboration
with MicroPort promises lower production costs in 2018, and is allowing
us to focus our marketing resources in the European Union, Japan and the
emerging China market. Lombard has an excellent portfolio of
endovascular AAA technologies which we plan to exploit in a focused and
disciplined manner.”
Business Update
During 2017, Lombard has refocused sales and marketing activities to
concentrate on markets that yield the most revenue potential at a
reasonable sales cost. The Company sells both Aorfix and Altura®
product lines via a direct salesforce in the United Kingdom. In Japan,
Lombard’s distribution partner, Medico’s Hirata, is experiencing
increased demand for Aorfix following the launch of the new delivery
catheter.
Lombard’s collaboration with MicroPort is focused on two key areas -
gaining CFDA regulatory approval by late 2018 to allow marketing of the
Aorfix endovascular system in China and working with Lombard to achieve
a significant reduction in material and labor costs for its product
lines. To that end, the parties have several initiatives and cost saving
projects well underway. Based on this collaboration, Lombard’s goal is
to achieve industry standard gross margins within the next 24 months.
Financial Results for the First Half ended June
30, 2017 and Third Quarter ended September 30, 2017 (unaudited)
For the first six months of 2017, revenue was $2.7 million compared to
$6.7 million in the first half of 2016 based on the Company’s exit from
the U.S. market. However, revenue increased to $1.8 million in the third
quarter ended September 30, 2017, as the Company focused marketing
efforts in the U.K. and Japan.
Operating expenses for the first half of 2017 were $8.1 million,
representing a year-over-year decrease of $8.0 million from the same
period in 2016. The decrease was primarily attributable to changes in
the Company’s operating expenses, including the elimination of the U.S.
salesforce and non-essential programs in marketing and engineering. As a
result of these cost savings, operating expenses were reduced to $2.6
million in the third quarter of 2017 compared to $7.1 million in the
same period of 2016.
Gross margins were negatively impacted during the first half of 2017 due
to several factors, including the transition of manufacturing activities
to the new generation delivery system and minimal absorption of
manufacturing overhead, resulting in a negative gross margin of 31%. For
the third quarter ended September 30, 2017, gross margin was 6.7%. The
Company believes gross margins will return to historical levels in
future quarters as revenue increases and cost of goods reductions take
hold.
As of September 30, 2017, the Company had cash and cash equivalents of
$8.0 million.
Q4 2017 and 2018 guidance
It is currently anticipated that revenue for Q4 2017 will be in the
range of $1.9 to $2.1 million with gross margins increasing to between
15 to 19% based on increased absorption of manufacturing overhead.
Operating expenses are expected to be approximately $2.6 million.
For 2018, the Company believes that increased demand for Aorfix in Japan
and continued adoption of the Altura product line in the UK and other
markets in Europe will result in sales growth of over 40%, resulting in
revenue of between $10 to $12 million.
The Company anticipates operating expenses of approximately $8 million
in 2018, and continued increases in gross margins based on lower
manufacturing costs.
In China, Lombard believes MicroPort will gain CFDA regulatory approval
for the Aorfix product line in late 2018, and expects the product to
enter the market in early 2019.
In the UK, where Lombard has launched Altura via the ALTITUDE registry,
the Company believes that the potential of day case surgeries at
prestigious UK hospitals sites represents an upside to these projected
results.
About Lombard Medical, Inc.
Lombard Medical, Inc. based in Oxfordshire, U.K., develops, manufactures
and markets an innovative range of minimally invasive abdominal aortic
aneurysm endovascular repair products. For more information, please
visit www.lombardmedical.com
Forward-Looking Statements
This announcement contains forward-looking statements that reflect the
Company’s current expectations regarding future events. These
forward-looking statements generally can be identified by the use of
words or phrases such as “guidance”, “project”, “believe,” “expect,”
“future,” “anticipate,” “look forward to,” “intend,” “plan,” “foresee,”
“may,” “should,” “will,” “estimates,” “outlook,” “potential,”
“optimistic,” “confidence,” “continue,” “evolve,” “expand,” “growth” or
words and phrases of similar meaning. Statements that are identified as
guidance or that describe objectives, plans or goals also are
forward-looking statements. Forward-looking statements are subject to
risks, management assumptions and uncertainties. Actual results could
differ materially from those projected herein and depend on a number of
factors, including the success of the Company’s research and development
and commercialization strategies, the uncertainties related to the
regulatory process and the acceptance of the Company’s products by
hospitals and other medical professionals, the uncertainty of estimated
revenues and profits, the uncertainty related to the Company’s
continuing cost-cutting measures, the uncertainty of current economic
conditions that could adversely affect the level of demand for the
Company’s products and increased volatility in foreign exchange rates,
the inability to raise additional funds, and the risks, uncertainties
and other factors described under the heading “Risk Factors” in the
Company’s Form 20-F filed with the Securities and Exchange Commission
dated April 28, 2017. Readers are urged to consider these factors
carefully in evaluating the forward-looking statements. The
forward-looking statements included herein are made only as of the date
of this report and the Company undertakes no obligation to update these
statements in the future.
View source version on businesswire.com: http://www.businesswire.com/news/home/20171031005195/en/
Source: Lombard Medical, Inc.
Lombard Medical, Inc.
Kurt Lemvigh, +44 (0)1235 750 800
Chief
Executive Officer
View printer-friendly version