NHS Supply Chain order & year end trading prospect

RNS Number : 6610A

Deltex Medical Group PLC

24 December 2014

 



24 December 2014

Deltex Medical Group plc

("Deltex Medical", "the Company" or "the Group")

NHS Supply Chain order and year end trading prospects

24 December 2014 - Deltex Medical Group plc, the global leader in oesophageal Doppler monitoring ("ODM"), today announces the signing an agreement for 60 monitors from NHS Supply Chain, a logistics provider to the NHS. This agreement represents the largest monitor order in the Company's history.

NHS Supply Chain has ordered 60 CardioQ-ODM+ monitors to support their 2015 NHS business plan.

This purchase by NHS Supply Chain, which is funded centrally, is in contrast to the severe cash restrictions faced locally by the majority of NHS frontline providers.

2014 trading

At this stage the Company is actively pursuing potential orders from individual NHS Trusts with a collective value in excess of £1 million. If all closed out successfully, these would mean approximately flat UK sales when compared to the 2013 financial year end. In addition, the Company is pursuing a tender worth up to £0.3m from a hospital system in Canada which was expected to be announced earlier in December but is now not expected to be awarded until 2015. To the extent that the above transactions are not completed before 31 December 2014, the Company expects its sales for the year to fall below the range of market expectations.

The Company plans to issue a trading update in the second week of January once the outcome for the year is clear.

Ewan Phillips, Deltex Medical's Chief Executive, commented:

"The NHS Supply Chain order is encouraging as it confirms a continued commitment from the NHS to the implementation of ODM to deliver better outcomes for patients and thereby save money."

"This central cash commitment is in contrast to that of NHS acute hospital providers, who are yet to see any benefit from the extra government funds being pumped into the NHS and are therefore struggling to find the cash to rebuild their stocks of our probes to normal levels."

For further information, please contact:-

Deltex Medical Group plc	01243 774 837 [e-mail]
Nigel Keen, Chairman
Ewan Phillips, Chief Executive
Paul Mitchell, Finance Director
Nominated Adviser & Broker
Arden Partners plc	020 7614 5900
Chris Hardie
Joint Broker Zeus Capital Limited Dominic Wilson John Goold	020 7533 7727
Financial Public Relations
Newgate Threadneedle	020 7653 9850
Tim Thompson
Heather Armstrong

Notes for Editors

Deltex Medical manufactures and markets CardioQ-ODMÔ Oesophageal Doppler Monitoring ('ODM') systems. 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 technology 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 intermediate risk 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 supports its use.

Subsequent to the NICE guidance, the NHS in England announced its selection of ODM as a high impact innovation to be rolled out across the system fully, at pace and scale.

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 2012 launch of the CardioQ-ODM+, Deltex Medical has added the Pulse Pressure Waveform Analysis ('PPWA') approach to monitoring cardiac output to ODM functionality. Doing this has improved Deltex Medical's offer for monitoring applications as well as providing doctors and nurses with a choice of clinical strategies appropriate to individual patients in different clinical settings.

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 3,000 CardioQ-ODM systems in use in hospitals worldwide. Distribution arrangements are in place in over 30 countries.

 

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