Issue of Equity

RNS Number : 7737A

Deltex Medical Group PLC

04 April 2012

 



Deltex Medical Group plc

Placing of 6,057,693 New Ordinary Shares at 26 pence to raise approximately £1.5 million and Current Trading Update

4 April 2012 - Deltex Medical Group plc ("Deltex Medical" or the "Company"), the global leader in oesophageal Doppler monitoring ("ODM"), announces that Arden Partners plc has, on behalf of the Company, placed 6,057,693 new ordinary shares of 1 pence each ("New Ordinary Shares") at a price of 26 pence, to raise approximately £1.5 million after expenses (the "Placing").

The Company will use the proceeds to give it sufficient working capital to react to increased orders that are expected be achieved. This follows the publication in December 2011 of the NHS innovation review that requires NHS organisations in England to demonstrate by March 2013 that they are implementing "ODM or similar fluid management monitoring technology".

Trading Update

In the first quarter of 2012 UK surgical probe sales have increased by over 40% compared to the first quarter of 2011, a significant increase over both the compound annual growth rate of 20% since the launch of surgical probes in 2004 and the 16% increase in UK surgical probe sales achieved in 2011 compared to 2010. The UK surgical installed base increased by 38 monitors to 557 by 31 March 2012.

Sales of probes in export markets in the first quarter were also ahead of 2011, driven by increased uptake in several of our larger export markets.

Placing details

Arden Partners plc has placed New Ordinary Shares on behalf of the Company with institutional investors. The Placing is conditional, inter alia, upon Admission and will raise approximately £1.5 million, after expenses.

Application will be made for the New Ordinary Shares issued pursuant to the Placing to be admitted to trading on AIM and it is anticipated that Admission will become effective and that dealings will commence on 12 April 2012.

The Placing Shares will, when issued, rank equally in all respects with the existing ordinary shares and will represent approximately 4.04% per cent. of the entire issued share capital of the Company immediately following Admission.

Following the Placing the Company will have 149,767,194 ordinary shares in issue. This figure may be used by shareholders as the denominator for the calculations by which they will determine if they are required to notify their interest in, or a change to their interest in Deltex Medical Group plc, under the Disclosure and Transparency Rules.

Publication of Report and Accounts and AGM

The Company's Report and Accounts for the year ended 31 December 2011 was posted on its website www.deltexmedical.com on 7 March 2012. The Company's Report and Accounts were sent to shareholders on 3 April 2012 together with the Notice of AGM, which is to be held on 2 May 2012. A Chairman's statement will be issued at the AGM of the Company and will be available on that day on the Company's website.

Deltex Medical's chairman, Nigel Keen, commented:

"The Directors have been encouraged by the growth in UK surgical probe sales seen to date in 2012 and with progress made in developing opportunities for future accelerated growth in a number of export markets. The placing proceeds give us the working capital flexibility to be able to capitalise on such opportunities."

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]

This announcement is for information purposes only and does not constitute an offer to sell or an invitation to subscribe for or a solicitation of an offer to buy or subscribe for any securities in any jurisdiction including in which such an offer or solicitation is unlawful and is not for distribution in or into, without limitation, the United Kingdom, the United States, Canada, Australia or Japan (the "Excluded Territories"), or to US persons (within the meaning of Regulation S of the United States Securities Act 1933 (as amended) (the "Securities Act").

The New Ordinary Shares have not been and will not be registered under the Securities Act or under the applicable securities laws of any state in the United States or any other Excluded Territory and, unless an exemption under such act or laws is available may not be offered for sale or subscription or sold or subscribed directly or indirectly within the Excluded Territories or for the account or benefit of any national, resident or citizen of the Excluded Territories. No public offering of securities will be made in the United States. The distribution of this announcement in other jurisdictions may be restricted by law and therefore persons into whose possession this announcement comes should inform themselves about and observe any such restrictions. Any failure to comply with these restrictions may constitute a violation of the securities laws of such jurisdictions.

Arden Partners plc, which is authorised and regulated in the United Kingdom by the Financial Services Authority, is acting exclusively for Deltex Medical and for no one else in connection with the Placing and will not be responsible to anyone other than Deltex Medical for providing the protections afforded to clients of Arden Partners plc nor for providing advice in relation to the Placing or any other matters referred to in this announcement.

This announcement contains certain statements that are or may be "forward-looking statements". These statements typically contain words such as "intends", "expects", "anticipates", "estimates" and words of similar import. All the statements other than statements of historical facts included in this announcement, including, without limitation, those regarding Deltex Medical's financial position, business strategy, plans and objectives of management for future operations (including development plans and objectives relating to Deltex Medical's products and services) are forward-looking statements. By their nature, forward-looking statements involve risk and uncertainty because they relate to events and depend on circumstances that will occur in the future and therefore undue reliance should not be placed on such forward-looking statements. There are a number of factors that could cause the actual results, performance or achievements of Deltex Medical or those markets and economies to be materially different from future results, performance or achievements expressed or implied by such forward-looking statements. Such forward-looking statements are based on numerous assumptions regarding Deltex Medical's present and future business strategies and the environment in which Deltex Medical will operate in the future and such assumptions may or may not prove to be correct. Forward-looking statements speak only as at the date they are made. Neither Deltex Medical, nor Arden Partners plc nor any other person undertakes any obligation (other than, in the case of Deltex Medical, pursuant to the AIM Rules for Companies) to update publicly any of the information contained in this announcement, including any forward-looking statements, in the light of new information, change in circumstances or future events.

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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