Creo Medical — New NHS client win for CROMA technology

Creo Medical (AIM: CREO)

Last close As at 22/06/2024

GBP0.34

−0.50 (−1.47%)

Market capitalisation

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Research: Healthcare

Creo Medical — New NHS client win for CROMA technology

In an encouraging development, Creo Medical has announced that Royal Oldham Hospital (UK) has become the latest NHS facility to sign up for its proprietary CROMA technology platform, Speedboat Inject (its flagship electrosurgical device) and related endotherapy products. Besides ordering several CROMA boxes and electrosurgical and associated devices to be used in submucosal dissection (SD) procedures, the hospital has shared its weekly list for planned Speedboat-assisted procedures, signalling ongoing commitment to Creo’s products and providing further validation of its platform and pipeline. The agreement indicates growing traction and acceptance of Speedboat Inject, which we expect to create further high-volume opportunities from other large network hospitals. With expansion of the Speedboat Inject user base (with an emphasis on training enrolment) being a strategic priority for FY23, we see this development as a step in the right direction.

Soo Romanoff

Written by

Soo Romanoff

Managing Director - Head of Content, Healthcare

Healthcare

Creo Medical

New NHS client win for CROMA technology

22 May 2023

Price

24.25p

Market cap

£85m

Pro forma net cash (£m) at 31 December 2022 (includes £32m fund-raise in Q123)

33.4

Shares in issue

350.9m

Free float

87.8%

Code

CREO

Primary exchange

AIM

Secondary exchange

N/A

Share price performance

Business description

Creo Medical is a UK-based healthcare company focusing on the development and commercialisation of minimally invasive electrosurgical devices. It has six products in the flagship CROMA platform, all of which have been CE marked and four of which have been cleared by the FDA. In 2020 Creo acquired Albyn Medical, which provides it with profitable products and a direct salesforce in Europe.

Analysts

Soo Romanoff

+44 (0)20 3077 5700

Nidhi Singh

+44 (0)20 3077 5700

Creo Medical is a research client of Edison Investment Research Limited

In an encouraging development, Creo Medical has announced that Royal Oldham Hospital (UK) has become the latest NHS facility to sign up for its proprietary CROMA technology platform, Speedboat Inject (its flagship electrosurgical device) and related endotherapy products. Besides ordering several CROMA boxes and electrosurgical and associated devices to be used in submucosal dissection (SD) procedures, the hospital has shared its weekly list for planned Speedboat-assisted procedures, signalling ongoing commitment to Creo’s products and providing further validation of its platform and pipeline. The agreement indicates growing traction and acceptance of Speedboat Inject, which we expect to create further high-volume opportunities from other large network hospitals. With expansion of the Speedboat Inject user base (with an emphasis on training enrolment) being a strategic priority for FY23, we see this development as a step in the right direction.

Collaboration update

Year end

Revenue
(£m)

PBT*
(£m)

EPS*
(p)

DPS
(p)

P/E
(x)

Yield
(%)

12/21

25.2

(29.7)

(14.6)

0.0

N/A

N/A

12/22

27.2

(31.0)

(14.9)

0.0

N/A

N/A

12/23e

32.8

(24.3)

(6.3)

0.0

N/A

N/A

12/24e

40.8

(14.8)

(3.6)

0.0

N/A

N/A

Note: *PBT and EPS are normalised, excluding amortisation of acquired intangibles, exceptional items and share-based payments.

The order from Royal Oldham Hospital comes after three doctors at the hospital enrolled in Creo’s Pioneer training programme, successfully performed their first inhospital SD procedures using Speedboat Inject in April 2023. This has since been followed by more than a dozen additional procedures. In addition, the hospital shared its weekly list of planned Speedboat-assisted dissection cases to indicate the quantum of upcoming orders for the device and associated equipment to support the medical procedures. Based on the hospital’s initial response, Creo expects it be a high usage site for its products. The Royal Oldham Hospital is the 23rd NHS England healthcare unit to adopt Speedboat Inject in its procedures, with 12 of the healthcare units being high-volume users. The company estimates that its target base for the Speedboat range of products is more than 350 hospitals in the UK.

For Royal Oldham Hospital, management estimates savings of up to £10k per procedure compared to surgical alternatives and believes that the CROMA technique reduces the chances of recurrence post lesion removal from 15% to 1%, helping the prevention, early detection and treatment of bowel cancer.

The client win also demonstrates the effectiveness of Creo’s Pioneer training programme. The c 1,500 procedures performed to date and 487 potential users under its clinical training programme indicate a favourable user response for the device and the near-term sales potential. With increased investment in training and mentoring capability, Creo plans to continue its emphasis on the Pioneer programme to sustain momentum. The company nearly doubled the number of training centres in FY22, resulting in similar growth in the number of physicians on its training programme (450 in FY22 vs 230 in FY21).

General disclaimer and copyright

This report has been commissioned by Creo Medical and prepared and issued by Edison, in consideration of a fee payable by Creo Medical. Edison Investment Research standard fees are £60,000 pa for the production and broad dissemination of a detailed note (Outlook) following by regular (typically quarterly) update notes. Fees are paid upfront in cash without recourse. Edison may seek additional fees for the provision of roadshows and related IR services for the client but does not get remunerated for any investment banking services. We never take payment in stock, options or warrants for any of our services.

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London, WC1R 4PS

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United Kingdom

General disclaimer and copyright

This report has been commissioned by Creo Medical and prepared and issued by Edison, in consideration of a fee payable by Creo Medical. Edison Investment Research standard fees are £60,000 pa for the production and broad dissemination of a detailed note (Outlook) following by regular (typically quarterly) update notes. Fees are paid upfront in cash without recourse. Edison may seek additional fees for the provision of roadshows and related IR services for the client but does not get remunerated for any investment banking services. We never take payment in stock, options or warrants for any of our services.

Accuracy of content: All information used in the publication of this report has been compiled from publicly available sources that are believed to be reliable, however we do not guarantee the accuracy or completeness of this report and have not sought for this information to be independently verified. Opinions contained in this report represent those of the research department of Edison at the time of publication. Forward-looking information or statements in this report contain information that is based on assumptions, forecasts of future results, estimates of amounts not yet determinable, and therefore involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of their subject matter to be materially different from current expectations.

Exclusion of Liability: To the fullest extent allowed by law, Edison shall not be liable for any direct, indirect or consequential losses, loss of profits, damages, costs or expenses incurred or suffered by you arising out or in connection with the access to, use of or reliance on any information contained on this note.

No personalised advice: The information that we provide should not be construed in any manner whatsoever as, personalised advice. Also, the information provided by us should not be construed by any subscriber or prospective subscriber as Edison’s solicitation to effect, or attempt to effect, any transaction in a security. The securities described in the report may not be eligible for sale in all jurisdictions or to certain categories of investors.

Investment in securities mentioned: Edison has a restrictive policy relating to personal dealing and conflicts of interest. Edison Group does not conduct any investment business and, accordingly, does not itself hold any positions in the securities mentioned in this report. However, the respective directors, officers, employees and contractors of Edison may have a position in any or related securities mentioned in this report, subject to Edison's policies on personal dealing and conflicts of interest.

Copyright: Copyright 2023 Edison Investment Research Limited (Edison).

Australia

Edison Investment Research Pty Ltd (Edison AU) is the Australian subsidiary of Edison. Edison AU is a Corporate Authorised Representative (1252501) of Crown Wealth Group Pty Ltd who holds an Australian Financial Services Licence (Number: 494274). This research is issued in Australia by Edison AU and any access to it, is intended only for "wholesale clients" within the meaning of the Corporations Act 2001 of Australia. Any advice given by Edison AU is general advice only and does not take into account your personal circumstances, needs or objectives. You should, before acting on this advice, consider the appropriateness of the advice, having regard to your objectives, financial situation and needs. If our advice relates to the acquisition, or possible acquisition, of a particular financial product you should read any relevant Product Disclosure Statement or like instrument.

New Zealand

The research in this document is intended for New Zealand resident professional financial advisers or brokers (for use in their roles as financial advisers or brokers) and habitual investors who are “wholesale clients” for the purpose of the Financial Advisers Act 2008 (FAA) (as described in sections 5(c) (1)(a), (b) and (c) of the FAA). This is not a solicitation or inducement to buy, sell, subscribe, or underwrite any securities mentioned or in the topic of this document. For the purpose of the FAA, the content of this report is of a general nature, is intended as a source of general information only and is not intended to constitute a recommendation or opinion in relation to acquiring or disposing (including refraining from acquiring or disposing) of securities. The distribution of this document is not a “personalised service” and, to the extent that it contains any financial advice, is intended only as a “class service” provided by Edison within the meaning of the FAA (i.e. without taking into account the particular financial situation or goals of any person). As such, it should not be relied upon in making an investment decision.

United Kingdom

This document is prepared and provided by Edison for information purposes only and should not be construed as an offer or solicitation for investment in any securities mentioned or in the topic of this document. A marketing communication under FCA Rules, this document has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and is not subject to any prohibition on dealing ahead of the dissemination of investment research.

This Communication is being distributed in the United Kingdom and is directed only at (i) persons having professional experience in matters relating to investments, i.e. investment professionals within the meaning of Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the "FPO") (ii) high net-worth companies, unincorporated associations or other bodies within the meaning of Article 49 of the FPO and (iii) persons to whom it is otherwise lawful to distribute it. The investment or investment activity to which this document relates is available only to such persons. It is not intended that this document be distributed or passed on, directly or indirectly, to any other class of persons and in any event and under no circumstances should persons of any other description rely on or act upon the contents of this document.

This Communication is being supplied to you solely for your information and may not be reproduced by, further distributed to or published in whole or in part by, any other person.

United States

Edison relies upon the "publishers' exclusion" from the definition of investment adviser under Section 202(a)(11) of the Investment Advisers Act of 1940 and corresponding state securities laws. This report is a bona fide publication of general and regular circulation offering impersonal investment-related advice, not tailored to a specific investment portfolio or the needs of current and/or prospective subscribers. As such, Edison does not offer or provide personal advice and the research provided is for informational purposes only. No mention of a particular security in this report constitutes a recommendation to buy, sell or hold that or any security, or that any particular security, portfolio of securities, transaction or investment strategy is suitable for any specific person.

London │ New York │ Frankfurt

20 Red Lion Street

London, WC1R 4PS

United Kingdom

London │ New York │ Frankfurt

20 Red Lion Street

London, WC1R 4PS

United Kingdom

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