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Arthro Kinetics plc: Successful completion of £6M Placing and £2.4M mezzanine financing
Arthro Kinetics plc, (“Arthro Kinetics” or “the Company”), the orthopaedic company dedicated to regenerating joint mobility and spinal disc function, announces that it has
raised approximately £6 million before expenses for the Company, including £0.2m for selling shareholders to meet tax obligations, in addition to a £2.4M mezzanine financing
closed in December 2005. It is expected that dealings in its ordinary shares will commence at 08.00 on 2nd March, 2006 under the ticket symbol “AKI”. The Placing is fully
underwritten by Nomura Code Securities Limited.
Nomura Code Securities is acting as Nominated Adviser and Broker to the Company. Arthro Kinetics Arthro Kinetics develops, manufactures and markets advanced biological implants for joint regeneration and surgical instrument and access systems for minimally invasive spinal surgery (“MISS”). The Company aims to develop a portfolio of biological implants for insertion by MISS techniques, thereby setting new standards of surgical care. Current revenues are generated through the sales of CaReS®, a biologic product for cartilage repair of the knee, MISS instruments for spinal surgery and through allograft (bone) processing services. The Company was formed by the recent merger of ARS Arthro AG and Endospine Kinetics Limited. Major pre-placing shareholders in ARS Arthro AG include Heidelberg Innovation, Varuma AG and the EMBL Technology Fund of Germany. Arthro Kinetics is headquartered near Stuttgart where it also operates its research and development and administration facility. The Company’s GMP grade tissue processing facility in Austria received EN ISO 13485/03 certification for production of any medical device up to class 3b and is authorised for producing both pharmaceutical and medical devices. The Company has operating bases in Germany, Austria, the UK, the US and Australia. The proceeds of the placing will be used to accelerate sales of knee and spine products, extend the infrastructure in the key markets of the US, Asia and Europe, and to develop and commercialise new regenerative products. Biologic implants The Company’s core technology is a proprietary 3D collagen type 1 matrix and process for producing biological implants used in regenerating joints. CaReS® is a cartilage repair product for knee defects of 2 to 10 cm² in size, and is currently marketed in Germany and Austria by the Company’s own sales network. In more than 700 patients treated to date, CaReS® has demonstrated significant advantages over traditional cartilage repair technologies which include: Clinical trials of CaReS® are underway with the Cleveland Clinic Foundation, Ohio. The Company’s implant pipeline includes products for small cartilage defects of less than 2 cm² (CartiPlug), large cartilage defects of more than 10cm² in size (CaReSPlus), spinal nucleus replacement (NuReS), meniscus repair (MeReS) and ligament repair (LiReS). Minimally Invasive Spinal Surgery (MISS) products Although spinal surgeons are increasingly favouring non-fusion procedures such as spinal disc and nucleus implants, these procedures still involve high-risk, open surgery. Under the direction of Dr. Martin Knight, Chairman of the Medical Advisory Board, the Company has worked with surgeons to develop a suite of surgical instruments and access systems for minimally invasive spinal surgery. The Kinetic Interchangeable Spinal System (K.I.S.S.) range of instruments and consumables are sold via distributors in Asia. The K.I.S.S. system received EU regulatory approval in November 2003 and FDA approval is expected in the second quarter of 2006. Arthro Kinetics is developing a series of nucleus replacement implants to replace and regenerate diseased and damaged disc nuclei according to the severity of degeneration. The Company’s spinal implants are designed to be inserted via MISS, through a 7.5 mm incision. NuCell, Arthro Kinetics’ first nucleus replacement implant, aims to start a pre-clinical pilot study in 2007. Subsequently, there will be a roll out to designated surgeons in Europe and Asia who will be required to have significant experience of the Company’s K.I.S.S. system. Allograft services The Company’s GMP facility in Austria additionally generates revenues from the processing of bone allograft. The Company expects to benefit from the new European regulations requiring bone processing to be carried out in a GMP plant, coming into force in April 2006. There are very few GMP plants in Europe today, and Arthro Kinetics believes that revenues from this service will grow in 2006. Bob Guilleaume, Chief Executive Officer, said: “Arthro Kinetics has developed an exciting range of biologic implants and a suite of surgical instruments which we believe will make complete knee joint and nucleus disc regeneration a viable option for orthopaedic surgeons and thus providing significant benefits for patients. The capital we have raised will enable us to implement our international growth strategy.” Contacts:
Nomura Code Securities Limited which are authorised and regulated by the Financial Services Authority, is acting for the Company only and will not be responsible to any
other person for providing the protections afforded to clients of Nomura Code Securities Limited or for advising such person on the matters referred to in this announcement.
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