MDY Healthcare - RE: AOI Medical
RNS Number:0919Y
MDY Healthcare PLC
11 June 2007
MDY Healthcare plc: further re proposed AIM IPO by AOI Medical Inc.
MDY Healthcare plc ('MDY Healthcare') notes the announcement released today by
AOI Medical Inc. ('AOI') concerning its Intention to Float on the London Stock
Exchange (see below).
MDY Healthcare currently owns approximately 7.5% of the issued share capital of
AOI Medical which would be valued at approximately £1.6 million at the
indicative pre-new money valuation of approximately £21 million. MDY Healthcare
has agreed to invest a further £1 million in the IPO. Following admission to
trading, MDY Healthcare would therefore hold approximately 8.6% of AOI Medical's
issued share capital.
Contacts:
Charles Spicer, CEO
MDY Healthcare plc
0207 647 1800
Copy of announcement issued today by AOI:
Not for release or distribution or publication in whole or part in or into the
United States, Canada, Japan, The Republic of south africa, or Australia OR ANY
OTHER JURISDICTION WHERE SUCH RELEASE OR DISTRIBUTION OR PUBLICATION WOULD BE
UNLAWFUL
AOI Medical, Inc. ('AOI' or 'the Company')
This announcement does not constitute or form part of an offer, or any
solicitation of an offer, for securities and any purchase of or application for
shares in the placing should only be made on the basis of information contained
in the formal admission document to be issued in connection with the placing and
the admission to AIM.
11 June 2007
AOI Medical announces proposed AIM flotation and placing
AOI today announces its intention to seek admission to AIM with an institutional
placing to raise approximately £8 million, with a pre-new money valuation of
approximately £21 million. Numis Securities Limited is acting as nominated
adviser, broker and joint bookrunner to the Company and Cowen International
Limited is acting as joint bookrunner to the Company.
Introduction
AOI is a medical device company focussing on the development and
commercialisation of innovative orthopaedic medical devices for the spine and
trauma markets. It is progressing the development of three separate technology
platforms: BAMF Spine, BAMF Trauma and Cervical Plate.
Key Strengths
* Three innovative and differentiated medical technology platforms
* Protected Intellectual Property
* Full retention of commercial rights
* Commercial launch of first product anticipated Q4 2007
* Targeting large and fast-growing markets
* Proven executive management team and experienced advisory panel
The Products
BAMF Spine (Balloon Assisted Management of Spine Fractures): a set of tools
intended to be used to address compression fractures of the spine caused by
osteoporosis or trauma. BAMF Spine will comprise two main instruments: a
cutting device that creates a cavity in cancellous bone, and a balloon-like
device which is used to restore the height of the fractured vertebra and to
deliver and contain the cement in the cavity. Current techniques used to treat
progressive vertebral compression fractures include vertebroplasty and
kyphoplasty. The Directors believe that BAMF Spine represents an enhancement
over the current techniques as they expect the process: to be accomplished
through one pedicle access port (incision) rather than two; to require fewer
steps and less time; to be less susceptible to cement leakage; and to return the
fractured vertebra to true anatomic position.
In 2004, the worldwide market for devices targeted towards spinal conditions had
a value of around $3.5 billion and most recent estimates indicate that the
spinal products market will approach $10 billion by 2010. The growth is being
driven by increasing incidences of osteoporosis in an ageing population and a
growing number of sports related injuries as people become more active. In
2009, the BAMF Spine global market size is estimated to be over $500 million.
The Company plans to develop devices for biomechanical testing during the first
half of 2007, followed by a 510(k) submission without clinical data in the
second quarter of 2007. The Directors anticipate that, subject to approval
being received for its 510(k) submission by the fourth quarter of 2007, BAMF
Spine will be launched commercially by the end of 2007.
BAMF Trauma (Balloon Assisted Management of Trauma Fractures): is a removable,
inflatable nail for the stabilisation of fractures of the long bones of the arms
and legs. AOI's BAMF Trauma differs from the nails currently on the market in
that it is a combination of a stainless steel nail inside a balloon. The device
is inserted into the intramedullar canal of the fractured bone with the balloon
deflated. The balloon is then inflated to fill the remaining space. The
Directors believe that BAMF Trauma will have a technological advantage over
existing products in the market because it will potentially: require a smaller
gauge at the point of insertion; provide a firm structure, adapted to the bone
cavity while in place; and be easily removed by deflating the balloon, thus
narrowing the diameter of the device again. The Directors believe that this
last feature should make the device particularly interesting for treating
children, in whom growth in the affected limb is impaired if a stabilisation
device is left in place.
It is estimated that over 300,000 intramedullary nailing procedures were
performed in the US in 2002. This number is forecast to grow to more than
400,000 by 2009. Sales of intramedullary nails are forecast to grow to
approximately $770 million by 2009. Design and biomechanical strength testing
are planned for completion by June 2007. AOI is planning to follow the 510(k)
with clinical data route for BAMF Trauma, with clinical studies carried out
under an IDE. Submission to the FDA for IDE approval is targeted for the fourth
quarter of 2007, with patient enrolment for clinical trials scheduled for the
fourth quarter of 2008. The Company anticipates gaining grant of the 510(k)
clearance from the FDA in the fourth quarter of 2011, following which sales of
BAMF Trauma in the open market are expected to begin.
Cervical Plate (Motion Preserving Cervical Dynamic Stabilisation Plate): an
anterior, semi-constrained artificial ligament designed to provide some
translational and rotational motion when used subsequent to a cervical spine
disc replacement surgery. Current practice for severe intractable disc disease
is spinal fusion. Spinal fusion is a medical procedure by which two or more
vertebrae are linked together. Fusion may be carried out to treat a number of
spinal conditions; however, it causes stiffness of the spine in patients and
increases stress to the adjacent levels of the spine which may lead to
additional morbidity. The failure rate after lumbar fusion has been reported to
be as high as 37 per cent. Anterior plates provide stability following
decompression and fusion of the cervical spine. The Directors believe that the
following technical attributes of the Cervical Plate provide it with a
technological advantage over existing spinal fusion techniques: it offers a
motion preservation fusion approach that aims to promote a return to normal
range of motion when used in combination with alternatives to fusion; the
sculpted design and thickened rails of the Cervical Plate should allow the
support needed to allow multi-directional movement while ensuring disc
compression, reducing pressures across adjacent parts of the spine; and it is a
smaller device than competitive devices and should therefore be less disruptive.
The US market for spinal fusion products has been estimated to have generated
sales of around $2,152 million in 2004, with revenues projected to grow to
$7,712 million by 2010. The US market for cervical prostheses and artificial
discs, which the Directors believe is the sector of the market in which the
Cervical Plate will compete, is forecast to be worth approximately $460 million
by 2009. The Company is planning to obtain FDA approval via the 510(k) with
clinical data route and will apply for an IDE for the product to establish range
of motion data. Provided that an appropriate motion preserving disc or nucleus
replacement device is identified by the beginning of 2008, the Directors
estimate that the initial commercialisation of the Cervical Plate will commence
in the fourth quarter of 2008 through IDE sales. The Company aims to gain FDA
approval, with range of motion, in the fourth quarter of 2011, following which
full commercialisation of the Cervical Plate is expected to begin.
Strategy
AOI's goal is to become a leader in the development and commercialisation of
medical devices in its markets. The key elements of the Company's business
strategy are to:
* seize the opportunity created in the vertebroplasty (kyphoplasty) market by
offering a simple technology which potentially could be more effective
than available alternatives;
* achieve a first mover advantage in the trauma fixation market by
offering a novel technology, with advantages particularly in children;
* be the first spine company with range of motion claims in a truly
dynamic cervical plate;
* leverage the experience and know-how of senior management and planned field
representatives to direct research and development activities and to spur
creation of novel products for the orthopaedics market;
* in-license technologies or acquire accretive products to enhance the
Company's product pipeline; and
* establish a proprietary sales force in the US to market orthopaedic
products.
Intellectual Property
The Directors believe that the protection of the Company's intellectual property
is fundamental to its commercial strategy, and AOI actively seeks to protect its
technologies and individual products using patents where appropriate. In the
US, the Company is licensed under three granted patents (one with regard to BAMF
Spine, on an exclusive basis, and two relating to Cervical Plate) and three
patent applications (two in respect of BAMF Spine, on an exclusive basis,and one
relating to Cervical Plate). The Company owns two pending patent applications
(both in respect of BAMF Spine, one of which also relates to BAMF Trauma).
Use of Proceeds
The net proceeds of the Placing will be used for:
* funding the continued development of the Company's three key
technology platforms, BAMF Spine, BAMF Trauma and Cervical Plate;
* funding business development and marketing expenditure for the
Company's technologies; and
* funding the development of AOI's initial marketing and sales
infrastructure in the US.
William Christy, President and Chief Executive Officer of AOI, said:
'The Directors believe that AOI has the potential to develop three innovative
orthopaedic medical devices for the spine and trauma markets which offer
technological enhancements over the currently available treatments. We are
targeting large and fast-growing markets and anticipate the commercial launch of
our first product before the end of 2007.
'The funds from the flotation will enable us to continue the development of our
three key technology platforms and to develop the initial marketing and sales
infrastructure in the US.'
Enquiries:
AOI Medical, Inc. +1 407 770 1800
William Christy, CEO
Numis Securities +44 (0)20 7260 1000
David Poutney / Bruce Garrow
Cowen International Limited
Paul Clegg +44 (0)20 7071 7501
Financial Dynamics +44 (0)20 7831 3113
Ben Atwell / Ben Brewerton / John Gilbert +44 7771 913 902
DIRECTORS AND SENIOR MANAGEMENT
The Directors and senior management of the Company are:
John D. Feltman, Non-executive Chairman since AOI was incorporated. Previously
Mr. Feltman served as Chairman, President and Chief Executive Officer of IMED
Devices, Inc. (now called ''CeloNova BioSciences''), which he founded in April
of 2000. CeloNova's business is in advanced polymer coatings and drug delivery
systems for implantable medical devices. Mr. Feltman is also Chairman and Chief
Executive Officer of Brookhaven Capital Corporation, a family-owned private
equity and venture capital firm, a Director of FutureMatrix Interventional, Inc.
a privately held specialised balloon OEM manufacturer and a Director of
Hannibal, Inc. From 1980 until 1995, Mr. Feltman held senior positions with J.C.
Bradford & Co., Bear Stearns & Co, Commonwealth Associates, Inc. and Interstate/
Johnson Lane.
Ian R. Johnson, Non-executive Deputy Chairman has served on the AOI board since
May 2007. From 1999 until 2006, Mr. Johnson was the Chief Executive Officer of
Biotrace International Plc, a leading provider of microbiology related testing
systems and reagents to customers in food, safety, industrial, healthcare and
defence sectors. Biotrace became a public company in 1993 and was listed on the
main market of the London Stock Exchange until its acquisition by 3M in December
2006. Mr. Johnson was a co-founder of Biotrace and, prior to becoming Chief
Executive Officer, served as its Technical Director from 1988 to 1996, and as
its Marketing and Development Director from 1996 to 1999. From 1983 to 1988, Mr.
Johnson held increasingly responsible positions at Clear Ltd., a biotechnology
company, and from 1977 to 1983, he was a microbiologist at Welsh Water plc. Mr.
Johnson studied at University College Cardiff obtaining an Honours Degree and an
M.Sc. by thesis in Microbiology. Mr. Johnson is a chartered biologist, a member
of the Institute of Biology and a member of the Institute of Directors. Mr.
Johnson is the author of numerous publications and patents in the field of rapid
microbiology.
William J. Christy, President & CEO, joined AOI in June 2005. Previously he
worked as President and CEO of Ortheon Medical, LLC, and led the Company in its
development of a new technology for the repair of tendons in the body. Ortheon's
product received FDA approval in May of 2003 and was successfully
commercialised. He has been involved with several medical device companies as
founder and executive director. These include: ESD Medical LLC and Synergistic
Medical Technologies, Inc., which was sold to Johnson & Johnson. In the early
part of his career Mr. Christy was Regional Sales Director of Ethicon
Endo-Surgery (a Johnson & Johnson company) and was one of the founders of
Ethicon Endo-Surgery. Mr. Christy received his B.S./B.A. from the University of
Central Florida and earned his MBA from Rollins College: Crummer Graduate School
of Business.
Fred A. Achecar, Jr., M.D., Non-executive Director has served on the AOI board
since May 2006. He is a Partner in Resurgens Orthopaedics of Atlanta and
President elect of medical staff at WellStar Douglas Hospital, Georgia. Dr.
Achecar earned his B.S. from the University of Notre Dame, and his M.D. from
Tulane University School of Medicine. Dr. Achecar was accepted to the Campbell
Clinic in Memphis, Tennessee where he completed his residency.
Scott A. Baily, Non-executive Director has served on the AOI board since
December 2006. He is Chief Operating Officer and a director of Sands Brothers
Venture Capital LLC. During his career Mr. Baily has occupied a variety of
senior executive positions at established investment firms including being a
partner and Senior Analyst at hedge fund, JPS Fund Group LLC and CEO and
President of GrandView Partners, a financial advisory firm focused on the small
cap and emerging growth sectors.
Paul M. Garvey, Non-executive Director has served on the AOI board since May
2007. Mr. Garvey has occupied a variety of senior positions in industry,
including until recently, seven years as Finance Director and Company Secretary
for Axis-Shield plc, a Scottish based healthcare diagnostics company. Mr. Garvey
is currently Chief Financial Officer of ProStrakan Group PLC, a speciality
pharmaceutical group headquartered in Scotland. Mr. Garvey has also held
positions as Finance Director and Managing Director of Lindsay Holdings Ltd and
Alexander Ross Holdings Ltd. Mr. Garvey is a Chartered Accountant who earned his
BBS from Trinity College, Dublin.
Stephen J. Warner, Non-executive Director has servced on the AOI board since
February 2005. Until recently Chairman and Co-Founder of CrossBow Ventures, a
venture capital fund located in Florida. Mr. Warner has more than thirty years
experience as an investment banker and venture capitalist. Prior to CrossBow
Ventures, Mr. Warner served as President and CEO of Merrill Lynch Venture
Capital. Mr. Warner has also served as a US government consultant evaluating
American Enterprise Funds, established by the United States Congress to promote
the development of free enterprise and entrepreneurship in Eastern Europe. Mr
Warner received his B.S. Degree from Massachusetts Institute of Technology and
his M.B.A. from The Wharton School of the University of Pennsylvania.
Dr. George B. Weathersby, Ph.D., Non-executive Director has served on the AOI
board since incorporation. Since 2002 he has been Managing Director of Genesys,
LLC and was President of the American Management Association between 2000-2002.
Dr. Weathersby has served as Commissioner of Higher Education for the State of
Indiana, been an Associate Professor of Management at Harvard, and was Director
of Planning and a Lecturer for the University of California.
D. Keehln Wheeler, Non-executive Director has served on the AOI board since
incorporation. Mr. Wheeler is the CEO and owner of MaxMedia, Inc., an award
winning and leading multimedia firm serving Fortune 500 clients and is a partner
in Westwood Communications. His business interests include having founded Real
Estate Information Network, better known as ''R.I.N.'' which was the first
internet data delivery system for residential real estate agents and serving on
the board of IMED Devices, Inc. (now called ''CeloNova BioSciences'').
Angela Johnston, CPA and Chief Financial Officer joined AOI in August 2005
initially as a consultant but became a full time employee in January 2006.
Having spent the early part of her career with Arthur Andersen, Ms. Johnston was
subsequently employed by Capital Cargo International Holdings, Inc., as
Financial Controller where she was responsible for the accounting functions
including financial and compliance reporting, implementing and monitoring
processes and internal controls and the oversight of audits for a domestic and
international cargo airline.
Mark A. Goldin, Vice President Research, Development and Operations joined AOI
in July 2005. Previously he worked for Ortheon Medical, LLC, latterly as
Vice-President of Research & Development and Operations. He joined Ortheon
Medical LLC from Ethicon Endo-Surgery, a Johnson & Johnson company, responsible
for MIDCAB products including distal anastomotic devices and heart stabilisation
platforms where he had been a design engineer.
Brian Schumacher, Director of Research and Development joined AOI in March 2006.
He was previously Lead Engineer for Ortheon Medical, LLC. Before this Mr
Schumacher was Senior Product Development Engineer for Walter Lorenz Surgical
and Product Development Engineer for Smith & Nephew.
IMPORTANT INFORMATION
Each of Numis Securities Limited ('Numis') and Cowen International Limited
('Cowen'), both of which are authorised and regulated by the Financial Services
Authority in the United Kingdom. are acting only for the Company in connection
with the matters described in this announcement and neither are acting for or
advising any other person, or treating any other person (whether or not a
recipient of this announcement) as their respective client in relation thereto
and will not be responsible to anyone other than the Company for providing the
protections afforded to their respective clients nor for any other advice to any
other person in relation to the matters which are the subject of this
announcement. Such persons should seek their own independent legal, investment
and tax advice as they see fit.
This announcement is only directed at persons in the United Kingdom: (a) who
have professional experience in matters relating to investments and persons who
are investment professionals as defined in article 19(5) of the Financial
Services and Markets Act 2000 (Financial Promotion) Order 2005 (as amended) (the
'Financial Promotion Order') or (b) high net worth companies, unincorporated
associations etc who fall within article 49(2)(a) to (d) of the Financial
Promotion Order (all such persons together being referred to as 'Relevant
Persons'). This announcement is directed only at Relevant Persons and must not,
in any circumstances, be acted on or relied on by persons who are not Relevant
Persons. Any investment or investment activity to which the announcement relates
is available in the United Kingdom only to Relevant Persons. Accordingly, this
announcement is exempt from the general restriction on the communication of
invitations or inducements to enter into investment activity and has not been
approved by an authorised person as would otherwise be required by section 21 of
the Financial Services and Markets Act 2000.
In Belgium this announcement is being issued solely to and directed at
institutional investors (gekwalificeerde beleggers/investisseurs qualifies)
(pursuant to Article 3,2 of the Belgian Law of 16 June 2006, and as defined in
Article 10, s1 of the Belgian law of 16 June 2006) and does not therefore
constitute an offer of securities to the public (openbare aanbieding/offre
public). It does not constitute an offer to sell or a solicitation of any offer
to buy any securities in Belgium to persons other than institutional investors.
Accordingly, this announcement is not intended for, and should not be
distributed to, issued to, or directed at Belgian residents other than
institutional investors. Belgian residents other than institutional investors
should not take any action in relation to this announcement. Pursuant to this
announcement, securities will only be offered to, and subscriptions will only be
accepted from, Belgian institutional investors as defined above.
In Ireland, this announcement is being solely issued to and directed at '
Qualified Investors' within the provisions of Article 2.1(e) of the Prospectus
Directive (EU Prospectus Directive 2003/71/EC), implemented into Irish law by
the Prospectus (Directive 2003/71/EC) Regulations 2005.
In Denmark, this announcement and the securities offered herein have not been
filed with or approved by the Danish Financial Supervisory Authority or any
other regulatory authority in the Kingdom of Denmark nor does this announcement
constitute a prospectus or other promotional material for the public offering of
securities in accordance with Danish law. Accordingly, the securities offered
herein may not be offered or sold, directly or indirectly, in Denmark, nor may
this announcement be marketed or distributed in Denmark except to qualified
investors as defined in the Prospectus Directive or if it is otherwise in
compliance with the Danish Securities Trading Act and any Executive Orders
issued thereunder, including Executive Order No. 306 of 28 April 2005 and
Executive Order No. 307 of 28 April 2005 on the first public offer of certain
securities, each as amended or replaced from time to time.
This announcement and the information contained herein is not for publication,
distribution or release in, or into, directly or indirectly, the United States,
Australia, South Africa, Canada or Japan and does not constitute, or form part
of, an offer of the securities for sale in or into the United States, Australia,
South Africa, Canada or Japan. The offer and the distribution of this
announcement may be restricted by law in certain jurisdictions and persons into
whose possession any document or other information referred to herein comes
should inform themselves about and observe any such restriction. Any failure to
comply with these restrictions may constitute a violation of the securities laws
of any such jurisdiction.
The securities referred to in this announcement have not been registered under
the U.S. Securities Act of 1933, as amended (the 'Securities Act') and may not
be offered or sold in the United States absent registration or an exemption from
the registration requirements of the Securities Act. The Company does not intend
to offer publicly any securities in the United States or to register any
securities under the Securities Act.
This announcement does not constitute a recommendation concerning the offer. The
value of shares can go down as well as up. Potential investors should consult a
professional advisor as to the suitability of the offer for the individual
concerned.
Forward looking statements
The contents of this announcement include statements that are, or may be deemed
to be 'forward looking statements'. These forward-looking statements can be
identified by the use of forward-looking terminology, including, without
limitation, the terms 'believes', 'estimates', 'anticipates', 'expects',
'intends', 'may', 'will' or 'should'. By their nature, forward looking
statements involve risks and uncertainties and readers are cautioned that any
such forward-looking statements are not guarantees of future performance. A
number of factors could cause the Company's actual results and performance to
differ materially from the impression created by the forward-looking statements
including, without limitation, the factors to be described in the risk factors
section of the formal admission document. Save as required by law, the Company
undertakes no obligation to publicly update or revise forward-looking
statements. No statement in this announcement is intended to be a profit
forecast or be relied upon as a guide to future performance.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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