- JAZZRevenue up 15%
- Significant improvement in the recurring operating loss, down 16%
Implanet (Paris:ALIMP) (Euronext Growth: ALIMP, FR0010458729, eligible for PEA-PME equity savings plans), a medical technology company specializing in vertebral and knee-surgery implants, today announces its results for the financial year ended December 31, 2017, and approved by the Board of Directors on March 13, 2018.
Implanet is holding a conference call in French at 6:30pm this evening.
To join the conference call, dial in on +33 (1) 70 71 01 59then enter PIN code 230 73 375#
Ludovic Lastennet, Implanet's Chief Executive Officer, commented: "While our global revenue remained stable, our operating performance improved as we tightly monitored our operating expenses. JAZZ growth in 2017 demonstrates the soundness of our innovation strategy. We maintained our R&D efforts in 2017, with a sustained pace of new product launches and accelerated our international expansion by moving into new markets. The L&K BIOMED deal finalized in February represents a key milestone in our development, opening up new opportunities in high growth regions. In addition to our distribution agreements, we will continue to build a value-added R&D and training platform to meet the ongoing demand of surgeons. Finally, we will pursue our innovation strategy, in particular the continued documentation of the JAZZ clinical value for patients."
|in thousands IFRS||2017||2016||Change|
|of which: Spine||4,715||4,102||+15%|
|Cost of products sold||-3,916||-3,844||+2%|
|Gross margin %||50.1%||50.9%|
|Regulatory matters, Quality control||-767||-916||-16%|
|Sales, distribution, marketing||-4,598||-5,105||-10%|
|Recurring operating result||-5,783||-6,881||+16%|
|Other non-recurring incomes and expenses||-456||0|
N.B. The audit of the consolidated financial statements has been completed. The auditors' report is currently being prepared.
Revenue: continued growth of JAZZ
In 2017, Implanet had sales of €7.8 million. Sales of JAZZ, Implanet's core business, rose to €4.7 million and now contributes 60% of total revenue (vs. 52% in 2016). This performance reflects the faster pace of Implanet's expansion both in France (16%) and in international markets, as it moved into new markets such as Germany, Europe's top spinal surgery market, Australia and South America.
The Knee business recorded a 16% decline since the distribution of arthroscopy implants was halted, as planned in early 2017. Sales of our total knee prosthesis (Implanet's product) remained however flat.
Ongoing operating expense control
Implanet kept a tight grip on its operating expenses, which were 11% lower than in 2016. The main improvements were in general and administrative expenses, regulatory affairs and operating costs. This helped drive a 16% reduction in the recurring operating loss to €5.8 million in the 2017 financial year (vs. €6.9 million in 2016) and a 9% reduction in the operating loss to €6.2 million (vs. €6.9 million in 2016).
In 2017, Implanet's net financial result recorded a 9% improvement, owing in particular to the reduction in financing costs.
Taking these factors into account, Implanet's net result improved by 9% to reach €6.6 million (vs. €7.3 million in FY 2016).
Cash and cash equivalents
In 2017, Implanet reduced its cash burn by 19% to €5.2 million, from €6.5 million in 2016.
As of December 31, 2017, Implanet had €4.0 million in cash and cash equivalents.
On December 19, 2017, the Company announced that it had redeemed the 2013 bond issue to Kreos Capital IV (UK) Ltd. As a result, since the repayment in full (principal and interest) of this €1.1 million was completed in 2017, cash burn is expected to decline by the same amount in 2018.
Post-closing event: on March 8, 2018, Implant announced that it had arranged a bond financing line (the "OCA") under which it can raise up to a maximum of €5.0 million. The new funding provided by the European Select Growth Opportunities Fund is intended to finance the commercial development of JAZZ worldwide, including under the distribution agreements now finalized with L&K BIOMED. This new bond line supersedes and replaces the €1.9 million outstanding under the previous financing line.
Significant advances and highlights of 2017
Implanet achieved key milestones in the fundamental pillars of its strategy, demonstrating the successful ramp-up in JAZZ, the priority area of development.
Innovation and regulatory affairs: sustained pace of new product launches
- marketing clearance and launch (FDA and CE mark) of four innovations: JAZZ Frame, JAZZ Standalone, the new JAZZ braid and JAZZ Passer System;
- award of patents strengthening JAZZ's intellectual property, 3 new patents awarded in 2017, increasing the total to 24.
Business development: acceleration of international expansion
- 144 surgeons using JAZZ technology in France and the United States (vs. 127 at December 31, 2016);
- first direct sales in Germany (Europe's largest spinal surgery market);
- exclusive distribution agreement with Device Technologies covering Australia and New Zealand.
Clinical development: recognition of JAZZ's medical value in the US
- presentation at the SRS conference of the White Paper entitled "How to optimize axial correction without altering thoracic sagittal alignment in hybrid constructs with sublaminar bands: description of the frame technique" presenting results of clinical analyses based on 3D radiological reconstruction;
- presentation of encouraging results for JAZZ at the NASS (North American Spine Society) Annual Meeting in the United States targeting unmet in complex spinal deformity surgery.
Financing: expansion of the United States shareholder base
- improvement in financing terms of the convertible bond financing raised from the European Select Growth Opportunities Fund, with the removal of the dilution linked to the share subscription warrants;
- €1.75 million increase in capital through the issue of shares to US institutional investors;
- redemption of €5 million financing arranged in 2013 with Kreos Capital, completion and withdrawal of the pledge of the business and intellectual property provided as collateral for this financing.
Partnership with L&K BIOMED finalized: significant acceleration in international expansion of the JAZZ platform
- in the United States: Implanet America is pooling its resources with those of Aegis Spine to accelerate commercialization of its JAZZ platform;
- in Asia and Oceania: L&K BIOMED will distribute the JAZZ platform alongside its existing product range;
- in Europe: Implanet will distribute L&K BIOMED's products, which complement the JAZZ platform, in France, the United Kingdom and Germany.
Implanet will continue to expand its spine business in 2018 thanks to its partnership with L&K BIOMED and the ramp-up of its JAZZ platform.
Next financial press release: Q1 2018 revenue on April 23, 2018.
Founded in 2007, IMPLANET is a medical technology company that manufactures high-quality implants for orthopedic surgery. Its flagship product, the JAZZ latest-generation implant, aims to treat spinal pathologies requiring vertebral fusion surgery. Protected by four families of international patents, JAZZ has obtained 510(k) regulatory clearance from the Food and Drug Administration (FDA) in the United States and the CE mark. IMPLANET employs 48 staff and recorded 2017 sales of €7.8 million. For further information, please visit www.implanet.com.
Based near Bordeaux in France, IMPLANET established a US subsidiary in Boston in 2013.
IMPLANET is listed on Euronext Growth market in Paris. The Company would like to remind that the table for monitoring the BEOCABSA, OCA, BSA and the number of shares outstanding, is available on its website: http://www.implanet-invest.com/suivi-des-actions-80
Ludovic Lastennet, Tel.: +33 (0)5 57 99 55 55
Julie Coulot, Tel.: +33 (0)1 44 71 20 40
Nicolas Merigeau, Tel.: +33 (0)1 44 71 94 98
Pascal Nigen, Tel.: +1 917 385 21 60