Lombard Medical Reports 2015 Second Quarter, Six-Month Results

Press Releases |

Revenue Up 107 Percent Year-Over-Year; U.S. Sales Increase 123 Percent

IRVINE, Calif., July 27, 2015 -- Lombard Medical, Inc. ($EVAR), a medical device company focused on endovascular aneurysm repair (EVAR) of abdominal aortic aneurysms (AAAs), today reported financial results and provided an operational update for the second quarter and six-months ended June 30, 2015.

Q2 and Recent Operational Highlights

  • Total 2015 second quarter Aorfix™ revenue grew 107 percent1 to $4.5 million compared to revenue of $2.2 million in the second quarter of 2014.
  • U.S. Aorfix revenue grew to $1.3 million in the second quarter of 2015, up 123 percent from $0.6 million in the second quarter of 2014.
  • Gross margin for the 2015 second quarter was 52 percent compared to 46 percent for the prior year period.
  • Opened new Innovation Center in Irvine, California.
  • In June, the first clinical cases using the new 34mm Aorfix Plus™ endovascular stent graft were successfully completed in the U.S. Up to 10 percent more AAA patients have the potential to be treated with Aorfix as a result of this expanded size range.

Operational and Financial Results

With U.S. procedures that more than doubled, global Aorfix revenue increased 107 percent1 to $4.5 million in the second quarter of 2015 compared to $2.2 million in the second quarter of 2014. For the first six months of 2015, global Aorfix revenue grew 87 percent1 to $7.9 million compared to $4.3 million in the year-earlier period.

In the U.S., where Aorfix was formally launched in November 2013, and is sold exclusively through the Company's own sales force, revenue in the 2015 second quarter and first six months was $1.3 million and $2.4 million, respectively. Comparative U.S. revenue in the 2014 second quarter and first six months was $0.6 million and $1.1 million, respectively.

"We had another solid quarter of rapidly growing procedures and revenues across key markets while making significant progress on our key commercial, regulatory and strategic initiatives," said CEO Simon Hubbert. "In the U.S., we added new physicians and new centers to our growing list of customers. We also launched Aorfix Plus, a new addition to our portfolio that allows us to treat patients with larger aortic neck diameters that we believe expands our addressable market by about 10 percent. In Japan, as a result of continued strong procedural growth, we estimate that we have captured approximately 5 percent market share within nine months of launching Aorfix."

In Japan, where Aorfix is sold through the Company's exclusive distributor, Medico's Hirata, and where regulatory approval was received in August 2014, revenue in the 2015 second quarter and first six months was $1.8 million and $2.7 million, respectively. There was no comparative revenue in the second quarter and first six months of 2014.

Gross margin for the 2015 second quarter and first six months was 52 percent and 49 percent, respectively, compared to 46 percent and 40 percent for the prior year periods. The improvement was primarily due to the effect of higher average U.S. selling prices and the spreading of fixed manufacturing costs over increased production volumes.

Total operating expenses for the 2015 second quarter and first six months were $10.6 million and $21.9 million, respectively, compared to $12.4 million and $20.2 million in the prior year periods. The net loss for the second quarter of 2015 was $8.2 million, or $0.51 loss per share, compared to a net loss of $11.1 million, or $0.76 loss per share, for the second quarter of 2014. The net loss for the first half of 2015 was $17.7 million, or $1.10 loss per share, compared to $18.0 million, or $1.49 loss per share, for the first half of 2014.

The Company's balance sheet as of June 30, 2015 showed total cash and cash equivalents of $48.4 million. This includes $11 million in proceeds from the $26 million secured term loan facility entered into with Oxford Finance LLC in April.

Company Outlook

The Company reaffirms that it expects to achieve revenue for 2015 of between $18 million and $20 million. This growth is expected to result from a more than doubling of the combined number of Aorfix procedures for the Company's four largest markets (U.S., Japan, UK and Germany) and pricing that remains stable in those markets.

Conference Call

Lombard Medical's management will discuss the Company's financial results for the second quarter and six months ended June 30, 2015 and provide a general business update during a conference call beginning at 4:30 p.m. Eastern Time today, Monday, July 27, 2015. To join the call, participants may dial 1-877-407-4018 (domestic), 0800-756-3429 (UK toll-free) or 1-201-689-8471 (international). To listen to a live webcast of the conference call, visit the Events and Presentations page under the Investors tab at www.lombardmedical.com.

An archived replay of the webcast will be available shortly following the completion of the call on the Events and Presentations page under the Investors tab at www.lombardmedical.com.

1 Total Aorfix revenue growth was 116.3 percent for the 2015 second quarter and 95.3 percent for the first six months of 2015 on a constant currency basis, calculated using 2014 average rates.

About Lombard Medical, Inc.

Lombard Medical, Inc. is an Irvine, CA-based medical device company focused on device solutions for the $1.6 billion per year abdominal aortic aneurysm repair market. The Company's lead product, Aorfix™, is an endovascular stent graft which has been specifically designed to solve the problems that exist in treating complex tortuous anatomies, which are often present in advanced AAA disease. Aorfix has been used to treat more than 4,000 patients worldwide. Aorfix is the only endovascular stent graft cleared by the U.S. Food and Drug Administration (FDA) for the treatment of AAAs with angulation at the neck of the aneurysm of up to 90 degrees providing physicians in the U.S. with the only 'on-label' endovascular treatment option for patients with this complex AAA anatomy. All other approved grafts are only cleared by the FDA for the treatment of neck angulation up to 60 degrees. For more information, please visit www.lombardmedical.com.

Forward-Looking Statements

This announcement contains forward-looking statements that reflect the Company's current expectations regarding future events. These forward-looking statements generally can be identified by the use of words or phrases such as "believe," "expect," "future," "anticipate," "look forward to," "intend," "plan," "foresee," "may," "should," "will," "estimates," "outlook," "potential," "optimistic," "confidence," "continue," "evolve," "expand," "growth" or words and phrases of similar meaning. Statements that describe objectives, plans or goals also are forward-looking statements. Forward-looking statements are subject to risks, management assumptions and uncertainties. Actual results could differ materially from those projected herein and depend on a number of factors, including the success of the Company's research and development and commercialization strategies, the uncertainties related to the regulatory process and the acceptance of the Company's products by hospitals and other medical professionals, the uncertainty of estimated revenues and profits, the uncertainty of current domestic and international economic conditions that could adversely affect the level of demand for the Company's products and increased volatility in foreign exchange rates, the inability to raise additional funds, and the risks, uncertainties and other factors described under the heading "Risk Factors" in the Company's Form 20-F filed with the Securities and Exchange Commission dated April 29, 2015.  Readers are urged to consider these factors carefully in evaluating the forward-looking statements. The forward-looking statements included herein are made only as of the date of this report and the Company undertakes no obligation to update these statements in the future.

For further information:

   
Lombard Medical, Inc.   
Simon Hubbert, Chief Executive Officer Tel: +1 949 379 3750 / +44 (0)1235 750 800
William J. Kullback, Chief Financial Officer Tel: +1 949 748 6764
   
Pure Communications  
Matthew H Clawson Tel: +1 949 370 8500 / matt@purecommunicationsinc.com
Susan Heins (Media) Tel: +1 864 286 9597 / sjheins@purecommunicationsinc.com
   
FTI Consulting (UK)  
Simon Conway, Victoria Foster Mitchell Tel: +44 (0)20 3727 1000

– Tables Follow –

Consolidated Statements of Comprehensive Income
for the three- and six-month periods ended June 30, 2015 (unaudited)
         
  Three months ended
June 30,
Six months ended
June 30,
  2015 2014 2015 2014
         
  $'000 $'000 $'000 $'000
Revenue 4,535 2,193 7,944 4,251
         
Cost of sales (2,191) (1,194) (4,019) (2,553)
         
Gross profit 2,344 999 3,925 1,698
         
Gross margin 52% 46% 49% 40%
         
Selling, marketing and distribution expenses (5,679) (5,809) (11,947) (9,950)
         
Research and development expenses (2,604) (2,283) (5,046) (3,846)
         
Administrative expenses (2,297) (2,765) (4,925) (4,893)
         
Initial Public Offering expenses -- (1,503) -- (1,503)
         
Total operating expenses (10,580) (12,360) (21,918) (20,192)
         
Operating loss (8,236) (11,361) (17,993) (18,494)
         
Finance income—interest receivable 35 84 82 129
         
Finance costs (234) (17) (256) (35)
         
Loss before taxation (8,435) (11,294) (18,167) (18,400)
         
Taxation 239 222 428 409
         
Loss for the period (8,196) (11,072) (17,739) (17,991)
         
Other comprehensive income:        
         
Items that will not be reclassified to profit or loss        
         
Currency translation differences 1,637 932 250 1,767
         
Total comprehensive loss for the period (6,559) (10,140) (17,489) (16,224)
         
Basic and diluted loss per ordinary share (cents) From continuing operations (50.6) (75.9) (109.6) (149.1)
 
Consolidated Balance Sheet
as at June 30, 2015 (unaudited)
     
  June 30, 2015 December 31, 2014
   $'000  $'000
Assets    
Intangible assets 5,132 5,259
Property, plant and equipment 3,359 3,087
Other receivables 374 348
Non-current assets 8,865 8,694
     
Inventories 5,230 4,895
Trade and other receivables 4,196 3,911
Taxation recoverable 1,533 2,065
Cash and cash equivalents 48,379 53,334
Current assets 59,338 64,205
     
Total assets 68,203 72,899
     
Liabilities    
Trade and other payables (6,861) (5,434)
Borrowings (396) --
Current liabilities (7,257) (5,434)
     
Borrowings (12,737) (2,632)
Non-current liabilities (12,737) (2,632)
     
Total Liabilities (19,994) (8,066)
     
Net assets 48,209 64,833
     
Equity    
Called up share capital 162 162
Share premium account 49,608 49,608
Capital reorganization reserve 205,686 205,686
Translation reserve 2,495 2,245
Accumulated loss (209,742) (192,868)
Total equity 48,209 64,833

 

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Symbol Name Price Change % Volume
EVAR Lombard Medical Inc. 0.78 -0.01 -1.27 6,319

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