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Lombard Medical Technologies shares spike 30% on US approval for Aorfix

Lombard Medical Technologies has achieved what many hundreds of companies strive for each year but fail to deliver: US Food & Drug Administration approval for a device or a drug.

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Lombard Medical Technologies (LON:LMT) has achieved what many hundreds of companies strive for each year but fail to deliver: US Food & Drug Administration (FDA) approval for a device or a drug.

In this case it has received the regulator sign-off from the one of the world’s most powerful regulatory bodies for Aorfix, a flexible stent graft used to treat abdominal aortic aneurysms (ruptures to the main artery).

The FDA green light allows the stent to be sold into the world’s largest market for medical devices and drugs.

Independent research suggests the US the market for the repair of abdominal aortic aneurysms is worth over US$600 million a year.

The approval triggers receipt of the £14.1mln second tranche of the two tranche placing and subscription announced by the company on April 20, 2011.

The cash will be used to launch Aorfix in the States via the company's own direct sales force.

Lombard chief executive Simon Hubbert said: "FDA approval of Aorfix is a major milestone for the company and sets the stage for the next chapter in the company's growth.

“I would like to thank all of our employees, investigators and clinical advisors for their support and hard work, without which development and approval of Aorfix would not have been possible.”

The shares added 30% and have doubled in value in the last six months to 232 pence each. This values the company at £46mln.

Canaccord Genuity expects the stock to move even higher and has a price target of 332 pence a share.

“We expect a strong reaction from the shares today as the FDA approval substantially reduces risk,” said analyst Julie Simmonds.

“We expect Lombard to announce its full year results in March and outline in detail the strategy for launch in the US.”


Quick facts: Lombard Medical Technologies

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AIM:LMT
Market: AIM
Market Cap: £0.00
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