TIDMAMS
RNS Number : 1981L
Advanced Medical Solutions Grp PLC
04 September 2023
4 September 2023
Advanced Medical Solutions Group plc
("AMS" or the "Group")
This announcement contains inside information for the purposes
of Article 7 of the Market Abuse Regulation (EU) No 596/2014 (as it
forms part of Retained EU Law as defined in the European Union
(Withdrawal) Act 2018).
Trading update
Winsford, UK : Advanced Medical Solutions Group plc (AIM: AMS),
the world-leading specialist in tissue-healing technologies, today
announces a trading update following recent events that have
impacted financial expectations for the year ending 31 December
2023.
Organogenesis US reimbursement coverage
As reported in the July trading update, our first half was
impacted by reduced royalty income from the patent licencing
agreement with Organogenesis Inc. that ends in September 2026. More
recently, in August 2023, Organogenesis announced that changes to
US reimbursement coverage for the treatment of diabetic foot ulcers
and venous leg ulcers has created uncertainty regarding the revenue
outlook for some of its key products, including those utilising AMS
patents.
Given that Organogenesis has withdrawn its own guidance and that
we have no control of, and minimal insight into its sales, we are
unable to quantify the financial impact on AMS at this stage. We
therefore believe it to be prudent to remove this royalty in its
entirety from Q4 2023 guidance onwards. The total 2023 full year
impact of the lower royalty is expected to be a reduction of GBP2
million to adjusted pre-tax profit. In FY24 and FY25, the removal
of the royalty is expected to reduce adjusted pre-tax profit by
GBP4 million per annum with a similar pro-rata impact in FY26 until
the end of the agreement in September 2026.
US LiquiBand(R) destocking
As part of its enhanced partner strategy in the US announced in
March, the Group has had positive discussions with its partners and
has made good progress with new agreements aimed at delivering
stronger growth from early 2024 onwards. This process has taken
longer than first anticipated and associated destocking has been
greater and it is clear that the FY23 impact will be more
significant than previously estimated, impacting revenues just in
the current year.
The destocking has not affected LiquiBand(R) end sales demand
and the pipeline of evaluations and conversions for LiquiBand (R)
XL continues to grow strongly. As such the Board's expectations for
LiquiBand(R) growth remain high, both short and long term and
LiquiBand (R) sales forecasts for 2024 and future years remain
unchanged.
Outlook
The combined effect of these factors is expected to impact the
Group's FY23 financial performance with revenues now anticipated to
be approximately GBP124 - GBP127 million and adjusted pre-tax
profit of approximately GBP25 - GBP27 million. Reflecting the
Board's confidence, with the exception of the adjustment to the
Organogenesis royalty, guidance for future years remains
unchanged.
Further information will be provided when AMS announces its
interim results on 20 September.
Chris Meredith, Chief Executive Officer of AMS, commented:
"While the uncertainty in the Organogenesis royalty stream and the
higher de-stocking of US LiquiBand(R) is clearly disappointing, my
confidence in AMS's long term growth prospects is stronger than
ever. W e remain convinced that our new US LiquiBand(R) partner
strategy will drive accelerated growth from early 2024 and that
this, in conjunction with other initiatives such as the imminent
launch of LiquiBand(R) Fix8 in the US, will enable AMS to return to
strong growth in 2024 and beyond."
- End -
For further information, please contact:
Advanced Medical Solutions Group plc Tel: +44 (0) 1606
545508
Chris Meredith, Chief Executive Officer
Eddie Johnson, Chief Financial Officer
Michael King, Investor Relations
Consilium Strategic Communications Tel: +44 (0) 20 3709
5700
Matthew Neal/ Lucy Featherstone
Investec Bank PLC (NOMAD & Broker) Tel: +44 (0) 20 7597
5970
Gary Clarence/ David Anderson
HSBC Bank PLC (Broker) Tel: +44 (0) 20 7991
8888
Sam McLennan / Joe Weaving / Stephanie
Cornish
About Advanced Medical Solutions Group plc
AMS is a world-leading independent developer and manufacturer of
innovative tissue-healing technology, focused on quality outcomes
for patients and value for payers. AMS has a wide range of surgical
products including tissue adhesives, sutures, haemostats, internal
fixation devices and internal sealants, which it markets under its
brands LiquiBand(R) , RESORBA(R) , LiquiBandFix8(R) and Seal-G(R) .
AMS also supplies wound care dressings such as silver alginates,
alginates and foams through its ActivHeal(R) brand as well as under
white label. Since 2019, the Group has made five acquisitions:
Sealantis, an Israeli developer of innovative internal sealants;
Biomatlante, a French developer and manufacturer of surgical
biomaterials, Raleigh, a leading UK coater and converter of
woundcare and bio-diagnostics materials, AFS Medical, an Austrian
specialist surgical business and Connexicon, an Irish tissue
adhesives specialist.
AMS's products, manufactured in the UK, Germany, France, the
Netherlands, the Czech Republic and Israel, are sold globally via a
network of multinational or regional partners and distributors, as
well as via AMS's own direct sales forces in the UK, Germany,
Austria, the Czech Republic and Russia. The Group has R&D
innovation hubs in the UK, Ireland, Germany, France and Israel.
Established in 1991, the Group has more than 800 employees. For
more information, please see www.admedsol.com .
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END
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