LYON, France & NEW YORK–(BUSINESS WIRE)–The MEDICREA group (Alternext Paris:FR0004178572 – ALMED,PEA-PME eligible), which specializes in the development and manufacturing of innovative surgical technologies for the treatment of spinal pathologies, announces its results for its 1st half to June 30th, 2015 as approved by the Board on September 3rd.
| € millions | H1 2014 | H1 2015 |
| Sales
Gross margin as a % of sales Operating profit before amortization and provisions Operating profit before share-based payments Current pre-tax profit Net profit |
11.9
81% 1.5 0.2 0.1 (0.1) |
13.8
79% 0.5 (1.0) (1.1) (0.9) |
The Group published its sales for the 1st half of 2015 on July 8. Driven by a dynamic 2nd quarter in the United States, in France and on new export markets where, for some months now, the Group has been carrying out an aggressive deployment strategy, sales totaled 13.8 million euros over the half, up +16% on the previous year. Six new exclusive distribution contracts have been signed since the start of the year in export regions where MEDICREA previously had no presence. Exchange rate fluctuations, essentially regarding the US dollar, had a positive impact of 10% over the period. However, the strengthening of the dollar did not have any positive impact on the Group’s results because of its ambitious sales & marketing investment policy in the United States.
“In line with what we had announced, since the end of 2014 the Group has invested over 3 million euros to enhance its production tool through the integration of a new 3D printing technology using successive layers of titanium, as well as a comprehensive high-performance prototyping unit” says Denys SOURNAC, Chairman and CEO. “These substantial investments, combined with the launch of new activities, notably UNiD™ customized osteosynthesis rods, generate structural costs that are thus far only in small part offset by recurring sales, and within this context the gross margin over the 1st half of 2015 saw a temporary downturn of 2 points compared with the figure a year earlier”, adds Denys SOURNAC.
The Group is furthermore continuing to strengthen its operational structures to accompany the growth in its activities, and notably its sales force and its R&D and Marketing departments. At constant currency, the Group’s payroll increased by 0.9 million euros compared with the 1st half of 2014, with the workforce growing from 120 people at June 30, 2014 to almost 140 people at June 30, 2015. As a significant portion of the Group’s structural costs are now based in the United States, the strengthening of the US dollar over the period mechanically resulted in an increase in operating expenses. Operating profit before amortization and provisions amounted to 0.5 million euros, versus 1.5 million euros at June 30, 2014.
“The Group’s expansion in the United States is the main focus of our development. In this respect, we have just undertaken a strategic recruitment operation by bringing in Greg Rhinehart, who is in charge of our American subsidiary’s sales operations”, says Denys SOURNAC. “Greg was thus far VP Sales Central Zone at Globus Medical, a leading company on the US spine market, for which he helped boost sales to over 100 million dollars. I am delighted to henceforth be able to count on Greg’s expertise, his in-depth knowledge of the market and the close ties he has developed with numerous opinion leader surgeons, and I am convinced that, with him at the helm of our sales team, we will reach a new milestone in the coming quarters.”
Since the launch of the UNiD™ rods, to date almost 350 surgeries have been carried out worldwide, including 120 in the United States following the FDA approval granted at the end of 2014. “There is growing interest in our proprietary customized implant technology, not only from surgeons who use our products but also directly from patients, with a growing number of them contacting MEDICREA each month to get more information and to find the nearest health centers that use our UNiD™ osteosynthesis rods. The Group will therefore rapidly adapt its organization and its marketing tools in order to take these behavioral changes onboard and promote, amongst the general public and in our surgical specialty, the concept of personalized medicine that undoubtedly represents one of the main global challenges for tomorrow’s health sector”, concludes Denys SOURNAC.
The Group recently strengthened its shareholders’ equity via a 3.5 million euro capital increase in which Denys SOURNAC participated to the tune of 500,000 euros. Total shareholders’ equity was thus 15.4 million euros at June 30, 2015 compared with 12.6 million euros at December 31, 2014. The Group’s industrial investments were financed through medium-term bank loans and a 2 million euro bond issue. At June 30, 2015, MEDICREA had 4.2 million euros in cash and cash equivalents.
Outlook:
Since the 2nd quarter of 2015, activity has remained at a very satisfactory level. The 3rd quarter should see similar sales growth to that recorded over the 2nd quarter. The recruitment of sales staff for MEDICREA’s new distribution subsidiary in Germany is continuing, and product listing should begin in client hospitals during the 4th quarter.
The Group is actively working to achieve marketing approval for its interbody cages and its corpectomy implants, which are customized and manufactured using 3D printing, with a view to marketing these new products across European markets from early 2016 and the United States from the 2nd half of that year.
The Group is also assessing possible licensing opportunities with American partners for some of its proprietary technologies.
Next publication: sales for the 3rd quarter of 2015 should be published on October 8, 2015 (after market).
ABOUT MEDICREA (www.medicrea.com)
The MEDICREA Group specializes in the design, manufacture, and distribution of innovative proprietary technologies devoted exclusively to spinal surgery. Operating in a $10 billion market, MEDICREA is a small to medium-sized business with 140 employees, including 40 at its MEDICREA USA Corp. subsidiary based in New York City.
The Company enjoys an excellent and ever-improving reputation, and develops unique scientific partnerships with some of the most visionary and creative spine surgeons in France, the UK, and the USA. The products developed and patented by MEDICREA provide neurosurgeons and orthopedic surgeons specializing in the spine with new and less-invasive surgical solutions that are faster and easier to implement than traditional techniques.
MEDICREA has also become a pioneer and global leader in the manufacturing of customized implants for personalized spinal surgery with the development of a comprehensive process incorporating the software analysis of each patient, the pre-surgical planning of the surgical strategy, and the production of customized spinal osteosynthesis rods (UNiD™ rod) and lumbar interbody osteosynthesis cages (UNiD™ ALIF cage) that are made to measure by a 3D printer.
The Group’s headquarters are based near Lyon, France. It also has an implant and surgical instrument manufacturing facility located in La Rochelle, France, as well as four distribution subsidiaries in the USA, the UK, France and Germany.