Allium Medical wins Chinese marketing urological stent nod

Stent Photo: Shutterstock

The approval means that the company's agreement with a Chinese distributor will go into effect.

The share price of Allium Medical Ltd. (TASE: ALMD) rose 12.5% earlier this week following an announcement that the company had obtained marketing approval for its urological stent in China. Under the terms of a previously signed distribution agreement, a Chinese company will now order NIS 88 million worth of products from Allium Medical over eight years (NIS 11 million a year). Allium Medical believes that sales will begin this year. The surge in the company's share price boosted its market cap to NIS 88 million.

Allium Medical also announced that it had obtained marketing approval in Russia for its gynecological product for treatment of pelvic floor prolapse.

Allium Medical is a multidisciplinary medical devices company that develops urological stents and gynecological surgical solutions and sells them worldwide, while also developing complex implants that have not yet reached the sales stage.

Allium Medical's revenue from its urological and gynecological products has been growing slowly but steadily in recent years. The company posted NIS 7.7 million in revenue in 2017, 8% more than in 2016. If the Chinese distributor does make the expected orders, it is likely to have a substantial effect on the company.

Allium Medical has consistently lost money as a result of its investments in its more complex products, including NIS 22 million in 2017, most of it in operating loss. While the products being sold give the company's its stability, most of its current value comes from the potential of its "dream products." The leading such product as of now is a device for preventing embolisms in surgery. This product has already received marketing approval, and the company is looking for a strategic partner or buyer for it. The product has had approval for prevention of embolisms in the common carotid artery for a few months, and approval was also obtained two months ago for the same product for prevention of embolisms in the peripheral artery. The company said on that occasion that this approval was likely to lead to a deal, but no advanced negotiations for a deal have been announced so far, and obviously no such deal has been signed.

Allium Medical has added two more products to its portfolio in recent years: a sleeve surgery product for treatment of diabetes and obesity and a product for replacement of the mitral valve - one of the most attractive medical devices markets. These two products are in animal trials, while the product for diabetes and obesity is scheduled to enter human trials this year.

As of the end of 2017, Allium Medical had NIS 22 million in cash, after spending NIS 18.4 million on current activity during the year.

Allium Medical CEO Asaf Alperovitz said, "The Chinese market represents a huge opportunity for us, both because of its size and the trends in it and because of cooperation and the distribution agreement with our distributor in China, which has decades of experience and specialization in the urological market in China, plus broad geographic deployment there, both direct and through a sub-distributor. This distributor also has a widespread network of connections with leading urologists in China, some of whom participated in the company's clinical workshops in Germany and Italy. These urologists have expressed great enthusiasm about the company's products, which constitute a safe and effective alternative to surgical procedures and short-term solutions. In accordance with Chinese culture and medicine, doctors and patients in China strongly prefer minimally invasive solutions in the long term to surgical procedures, and some of the company's stent systems can be implanted in a clinic outside hospitals. The doctors believe that this will make the products accessible to additional territories and market segments beyond the main cities. Due to the combination of these factors, we believe that our stent systems have very significant clinical and commercial potential in this market."

Published by Globes [online], Israel business news - www.globes-online.com - on May 11, 2018

© Copyright of Globes Publisher Itonut (1983) Ltd. 2018

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Stent Photo: Shutterstock
Stent Photo: Shutterstock
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