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Lombard Inches Closer to US Approval For Aorfix

The progress of Lombard Medical Technologies (LON: LMMT) has been ‘excellent’ since it concluded its re-financing on February 1, according to chief executive John Rush.

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The progress of Lombard Medical Technologies (LON: LMMT) has been ‘excellent’ since it concluded its re-financing on February 1, according to chief executive John Rush.

The company is now focusing on just five core markets – the UK, France, Germany, Italy and Spain - while concluding phase III clinical trials on its Aorfix product in the US.

Aorfix is a stent graft for abdominal aortic aneurysms - a widening of the main artery as it moves down through the abdomen.

First half sales of the product rose 79 per cent to £622,000 in the company’s key European markets, and Rush said the firm is 'on track' to submit for regulatory approval in the US in the first half of next year.

The downside of the change in sales strategy is that income from other sources, including the trials in the US, recedes.

Overall, turnover rose by 16.5 per cent to £1.4 million in the six months to June, giving a pre-tax loss of £4.2 million.

In February, Lombard raised £12.1 million to commercialise Aorfix, of which £10.3 million is left.

Rush says the company will burn through the remainder of its cash pile by the final quarter of next year, leaving a funding shortfall.

“We have told the market that we didn’t raise enough to get to cash-flow positive.

“We are going to have to come up with a strategy to raise the additional funds – a combination of debt and equity.

“We are still trying to figure out how we are going to do that and where. As a board we will be addressing that at the end of the year.”

Rush promised that investors will be updated on funding plans by the beginning of next year “at the latest”.

The US Food & Drug Administration approval will be a breakthrough for the firm. But in the meantime the chief executive has been working on modifications to Aorfix, as well as re-organising the way the business operates.

“Based on what we told people we were going to do when we closed out financing on February 1 we have done it,” Rush said.  “The progress has been excellent.”

Earlier, broker Nomura Code repeated its buy advice on the stock.

Analyst Mike Ward said: “The Aorfix stent graft continues to perform well clinically, and we still believe that with US approval and sufficient marketing resource, it has the potential to become an important product in the abdominal aortic aneurysm market.”

At 3.45pm, the shares were trading at 0.82p, down 0.06p.

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AIM:LMT
Market: AIM
Market Cap: £0.00
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