AGM Statement

RNS Number : 5353C

Deltex Medical Group PLC

02 May 2012

 



Deltex Medical Group plc

Chairman's Statement to Annual General Meeting

2 May 2012 - At the Annual General Meeting of Deltex Medical being held today the Company's Chairman, Nigel Keen will make the following statement:

"In the year to date we continue to make progress towards our goal of establishing the use of the CardioQ-ODMÔ as a standard of care around the world. Our strategy supports local adoption and encourages the system-wide implementation of CardioQ-ODM.

Sales in the year to date are ahead of 2011, costs remain under tight control and last month we announced that we had raised a further £1.5 million in new equity. As a result we have the resources to support the NHS in England as it starts to implement systematically ODM or similar fluid management monitoring technology at pace and at scale.

In March last year the National Institute for Health and Clinical Excellence ("NICE") recommended that CardioQ-ODM be considered for use in all patients undergoing major and high risk surgery in the NHS. We have seen a step-up in the growth rate of our UK surgical probe business since December 2011 which we believe to be attributable primarily to NICE's guidance. Sales of surgical probes in the UK in the first four months of the year are over 40% ahead of the prior year.

Since January we have increased the UK surgical installed base by 40 monitors to 559. The decision we took late in 2011 to reduce substantially the price of monitors in the UK has been vindicated. We have sold [approximately twice] as many monitor units than in the first four months of 2011. In April we sold our first monitors through NHS Supply Chain following our being award a major tender in March.

We have yet to see the benefit of selection of ODM as one of six high impact technologies to be implemented in the NHS. We expect the implementation plans required by last December's Innovation Health & Wealth report to be published this summer and that these will provide growth momentum. The Board is encouraged by the robust recommendations for fluid management contained in the Enhanced Recovery Partnership guide published this week¹. These include that cardiac output monitoring technologies should be immediately available to all anaesthetists caring for patients undergoing intermediate or major risk surgery, that perceived lack of resources is not a viable excuse in the NHS following the NICE guidance on CardioQ-ODM and that all NHS hospitals should implement local guidelines in the context of NICE recommendations, national guidelines and the Innovation Health and Wealth Review. The Enhanced Recovery Partnership includes national clinical leads and advisers on enhanced recovery, NHS Improvement, the Department of Health and the National Cancer Action Team: its guide is supported by the various Royal Colleges and includes recommendations for commissioners.

We continue to make progress in export markets. In Canada we have seen excellent results from the first phase of a hospital system implementation of CardioQ-ODM. Draft clinical guidelines on fluid management in surgery for French anaesthetists are due to be published later this year and are expected to lead to accelerated uptake of CardioQ-ODM in a market that is already growing well. Positive results from the first South American study of CardioQ-ODM were presented at the World Congress of Anaesthesia. Doctors using the CardioQ-ODM in Spain are progressing with the largest ever multi-centre randomised trial of fluid management. We have also announced a collaborative research project with Premier Inc which is the most advanced of a number of initiatives we are pursuing to create the circumstances likely to drive accelerated and systematic adoption of our products in the USA.

The Board therefore looks forward to continued progress throughout the remainder of 2012 and beyond."

^1. Fulfilling the Potential. A Better Journey for Patients and a Better Deal for the NHS. www.improvement.nhs.uk/documents/er_better_journey.pdf

For further information, please contact:-

Deltex Medical Group plc                                   01243 774 837

Nigel Keen, Chairman                                        [e-mail]

Ewan Phillips, Chief Executive                            [e-mail]

Paul Mitchell, Finance Director                           [e-mail]

Nominated Adviser & Broker

Arden Partners plc                                             020 7614 5900

Chris Hardie                                                      [e-mail]

Jamie Cameron                                                  [e-mail]

Kreab Gavin Anderson                                       020 7074 1800

Robert Speed                                                    [e-mail]

Deborah Walter                                                 [e-mail]

Notes for Editors

Deltex Medical manufactures and markets the CardioQ-ODMÔ system. Oesophageal Doppler monitoring using the CardioQ-ODM is the only therapy to measure blood flow in the central circulation in real time. Minimally invasive, easy to set up and quick to focus, the device generates a low-frequency ultrasound signal, which is highly sensitive to changes in flow and measures them immediately. Randomised, controlled trials using Doppler have demonstrated that early fluid management intervention will reduce post-operative complications, reduce intensive care admissions, and reduce the length of hospital stay.

The CardioQ-ODM has two distinct established clinical applications: firstly, to guide fluid management during surgery and secondly, to monitor cardiac output in critical care settings.

Surgical market

In March 2011 the National Institute for Health & Clinical Excellence ('NICE') recommended that CardioQ-ODM be considered for use in patients undergoing major and high risk surgery and in high risk patients undergoing major surgery. NICE estimated the applicable number of such patients in the NHS in England alone to be over 800,000 each year. CardioQ-ODM has been shown to be effective in both elective and emergency surgery and with both general and regional anaesthetics. This recommendation was specific to CardioQ-ODM and was based on the robust evidence base that it enjoys.

The NICE evaluation and recommendation confirms that the potential global market for CardioQ-ODM in surgery includes tens of millions of patients, even if confined to developed health economies: the most conservative estimate of the potential value of the market opportunity Deltex Medical has created is in excess of £1 billion per annum. The Company's core focus is on building market leading positions in this surgical market, both geographically and by type of surgery.

Critical care market

In critical care settings, well-equipped hospitals will often have more than one cardiac output monitoring technology available. In this environment, ODM's strengths are that it is quick to set up, easy to use, safe, low cost and the ideal technology for a patient in crisis requiring rapid or frequent intervention. The potential market for cardiac output monitoring in critical care is a fraction of the size of that for intra-operative fluid management.

Through the recent launch of the CardioQ-ODM+, Deltex Medical has incorporated pulse pressure variation, the best validated parameter from the Pulse Pressure Waveform Analysis ('PPWA') approach to monitoring cardiac output. Note that, in surgery, adding PPWA parameters does not expand per se the market potential of ODM, the Company's clinical and market research indicates that it may help accelerate some clinicians' acceptance of the value of ODM measured flow variables.

Company goal

Our goal is to make oesophageal Doppler monitoring (ODM) a standard of care for patients in both these markets. We believe that, in most modern health systems, it is essential to have a robust evidence base of both clinical benefit and cost effectiveness in order to achieve system-wide adoption of a new medical technology. Deltex Medical is one of the very first medical technology companies to have completed the investment necessary to build such an evidence base: as a result, use of ODM during surgery has the proven potential to deliver both clinical and economic benefits that are material at each of patient, hospital and system level.

The Company is currently in the implementation phase of achieving this goal in a number of territories worldwide and there are already over 2,500 CardioQ-ODMs currently in use in hospitals worldwide and distribution arrangements are in place in over 30 countries.

 

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