The development of keyhole surgery from the mid-1980s onwards has spawned a revolution that means now 75 per cent of soft tissue procedures on the abdomen are carried out laparoscopically utilising advanced energy.
The use of camera-guided surgeons’ tools such as Johnson & Johnson’s Harmonic Scalpel, or the Olympus Thunderbeat and other similar rigid devices, has revolutionised and routinised certain procedures.
It has also helped slash NHS costs, recovery times and has enhanced safety.
Creo is the pioneer of the next generation of minimally invasive surgical technology
And the emergence of the keyhole techniques has also spawned a multi-billion-pound industry dominated by just a handful of large players.
It is against this backdrop that Creo Medical is starting to emerge, not to challenge J&J, Medtronic or Olympus on their home turf, but to extend the playing arena.
For Creo is the pioneer of the next generation of minimally invasive surgical technology bringing advanced energy, surgical tools to even smaller spaces while operating via standard flexible endoscopes such as colonoscopes, gastroscopes, duodenoscopes and echoendoscopes.
Its flagship Speedboat product allows interventional endoscopists and surgeons to make an incision, dissection and to coagulate the blood with one device obviating the requirement to switch instruments.
The Speedboat products, along with Creo’s MicroBlate ablation technology, and its SlypSeal non-stick sealing device, work from a single advanced energy platform called Croma.
Its Croma system, powered by Kamaptive technology, combines both adaptive bipolar radiofrequency (RF) and super high-frequency microwave energy,
Its inventor, Creo’s founder and chief technology officer, Professor Chris Hancock, was one of the early engineers at UK innovator Gyrus Group, whose medical advances are now at the heart of many of Olympus’ energy-based surgical devices.
The Creo technology, which is protected by a significant patent estate, is initially focused on the gastrointestinal tract, lung interventions and soft tissue ablation (particularly the reduction of solid tumours on the liver, pancreas and kidney).
The Croma generator and suite of devices carries the CE mark, representing regulatory approval in Europe, while four of its products have clearance from the US Food & Drug Administration.
Creo Medical shares’ performance – in the year to date, they have fallen by 20%
The MicroBlate ablation technology has life-changing potential for treating pancreatic and lung tumours.
For example, the MicroBlate Fine product was used on its first patient to completely ablate a large 6cm pancreatic neuroendocrine tumour, helping to extend the patient’s life by several months so far.
You might shrug at this and say ‘meh’. Well, pancreatic cancer, which killed Steve Jobs and Patrick Swayze, has the highest mortality of all major cancers with five-year survival rate of 10 per cent and as such can be seen as a death sentence – unless it is caught early.
Even then the current surgical procedure which in a minority of cases can be used to remove the tumour, called a Whipple Pancreaticoduodenectomy, is perilous. The mortality rate is around 15 per cent.
‘We can’t call it a curative outcome until the patient has got through long term follow-up,’ says Creo chief executive Craig Gulliford of the pancreatic ablation.
‘However, so far 10 months after treatment with MicroBlate Fine the patient has had no additional treatment with no evidence of disease at the last scan.’
The beauty of the Croma Platform is that it supports a whole array of tools Creo has developed or is developing that will be sold as single-use sterile products, which guarantees repeat business.
The company is at a pivotal stage of its development. In August, it raised just over £36million via a placing and open offer of new shares that will fund its commercial strategy towards break even.
Specifically, the proceeds will accelerate its product rollouts in the US, Europe, and Asia.
The acquisition of Albyn Medical last year for around £23million has provided the company with a direct sales force in Europe.
‘We’ve regionalised across the US so that we can get shoulder to shoulder with physicians in the early days,’ Gulliford explains.
‘This is nothing new. This is how Stryker and J&J [Johnson & Johnson] and the surgical companies operate. We’re starting that process in the States having started early with that in Europe, particularly in the UK.’
But he adds: ‘We are actively looking for further acquisitions that will give us boots on the ground in the US extending our direct sales and support resources’
The Creo CEO and his senior team are likely to be very busy over the next few years. As well as the commercial ramp-up, the company is, as Gulliford intimated, looking at acquisition opportunities.
It will also continue to develop its Croma Kamaptive system to exploit licensing opportunities, specifically in robotics, while exploring commercial opportunities in Japan and China.
There is even the potential to deploy its know-how to beat antimicrobial resistance. But with so much on its plate, the company will likely find a partner to help mine this particular commercial seam, Gulliford says.
Given the progress that has been made to date, it’s surprising to discover the shares have drifted around 20 per cent lower in the year to date to 157p, valuing the business at £283million.
While that may be a problem for those who invested at the start of 2021, it represents an opportunity for those with an eye for a bargain. Certainly, this is the case if you buy into the thesis outlined by the City research house, Edison, which reckons Creo is worth £434million, or 240p per share. That’s a 53 per cent premium to the current stock price.
With the addition of Albyn to the Creo portfolio, the company is now generating sales. Turnover is expected to be in the order of £25.9million this year, rising to £28.4million in 2022.
This is a company at the start of very exciting journey, Gulliford says.
‘Eighteen months ago we were predominately an engineering business with 20 per cent of the workforce in sales and marketing on the front end of the business,’ he notes.
‘It’s now almost the other way around. The people we’ve hired are all about commercialisation and driving the business forward.
Coming out of the pandemic, ‘The next two years will be a challenge, but a challenge we are prepared for, look forward to, and meeting head-on.’
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