Lombard Medical has announced completion of a restructuring following the implementation of its new strategy to focus sales efforts in the UK, Japan and China, and reduce operating and manufacturing costs in order to achieve cash flow breakeven in the near term.
The restructuring program is anticipated to result in a reduction of nearly US$12 million in operating expenses in 2018 when compared to 2016 expenditure levels; a reduction of more than 50%.
Kurt Lemvigh, CEO, commented, “During 2017, we have refocused sales and marketing activities in an effort to concentrate on our highest margin markets. We continue to sell on a direct basis in our home market of the UK and via our distribution partner Medico’s Hirata in Japan. Sales in Japan continue to increase, and we expect to gain a further 2% market share this year. Our intention is to expand into additional geographies internationally in the second half of 2018 as our cost of goods reduction initiatives bear fruit.”
Lombard’s strategic partnership with MicroPort Scientific is focused on two key areas: gaining CFDA regulatory approval for Lombard’s endovascular portfolio in China and a significant reduction in material and labour costs. To that end, the parties have several collaborative initiatives and cost saving projects well underway. It is anticipated that based on this collaboration, Lombard will achieve industry standard gross margins within the next 24 months.
The parties intend to launch the Lombard abdominal aortic aneurysm products in China, distributed by MicroPort, following regulatory approvals currently anticipated before the end of 2018.