Lombard Medical announced on 22 August 2016 “a significant operational restructuring and the exploration of strategic alternatives to enhance shareholder value” with the closure of its operations in the USA. The company added it would be allocating its resources to exclusively support the new Altura AAA stent graft system and the recently CE-marked IntelliFlex LP delivery system for Aorfix in the European Union, Japan and other key international markets.
The Aorfix sales force in the USA has been eliminated and the majority of commercial operations have transitioned to the company’s facility in the UK. As a result of the restructuring, the cash requirements associated with operations have been significantly reduced, the company stated in a press release.
CEO Simon Hubbert said, “Our shift in geographical commercial focus is starting to deliver strong sales growth in the Western Europe direct markets as Altura gains traction. We expect to see this growth accelerate as we expand Altura into new centres. We are very encouraged by the physician feedback and excellent clinical results we are seeing from Altura and believe that with the introduction of the new IntelliFlex delivery system for Aorfix, we now have a world-class product portfolio providing a full range of solutions for the treatment of abdominal aortic aneurysms.
“In the US, the FDA is requiring additional clinical data to support the application for US approval of the IntelliFlex delivery system. This pushes the potential approval timeline out significantly,” added Hubbert. “We have, therefore, decided to discontinue funding commercial operations in the USA at this time and instead solely focus our resources on growing revenue in Europe, Japan, and other key international markets where we are able to benefit from the enhanced Aorfix delivery system as well as the direct and synergistic effect of Altura.”
In addition, in order to enhance shareholder value, the company’s board of directors has engaged Cain Brothers as its investment banker to begin a process of exploring strategic alternatives, including a potential sale of the company or disposition of certain assets, as well as distribution or other strategic partnerships. Separately, the company will also be evaluating additional financing opportunities during this time.
The press release stated, “There can be no assurance that Lombard will enter into any strategic or financing transaction in connection with this process. Lombard does not plan to disclose or comment on developments regarding its strategic alternatives review process until further disclosure is deemed appropriate.”
Lombard Medical’s second quarter 2016 global revenue was US$3.8 million, representing a 30.1% sequential increase from US$2.9 million in the first quarter 2016. Revenue from both the Altura and Aorfix endovascular stent grafts in Lombard’s European direct sales markets in the UK, Germany and the Netherlands grew 20.9% sequentially and 42.6% year-over-year.