Advanced Medical confident despite some first-half friction

The AIM-traded firm said one of its key achievements in the six months ended 30 June was the pre-market approval (PMA) of ‘LiquiBandFix8’ for use in hernia surgery, which was granted ahead of schedule, seven months after submission.

It said it was currently in the final stages of contract negotiations with a partner, and expected to launch LiquiBandFix8 in the fourth quarter.

Negotiations with US LiquiBand partners had meanwhile progressed well as the company executed its new route-to-market strategy.

The destocking phase was now largely complete, and ordering was anticipated to return to normal in the second half of 2023, with accelerated growth expected thereafter.

AMS said the recruitment phase for the ‘SEAL-G’ and ‘SEAL-G MIST’ clinical study, involving 160 patients, was almost finished, with the last patient procedure set to be completed imminently.

The European soft launch of the product remained on track for the second half of the year.

Additionally, the firm said its wound care pipeline had resulted in increased orders from multiple partners, further contributing to its positive progress.

Although there was a temporary disruption to ordering patterns in the first half of the year due to the strategic initiative to accelerate 2024 US LiquiBand growth, AMS said it expected order volumes to normalise during the second half, with accelerated growth anticipated from 2024 onwards.

Despite that, the company said it delivered growth in other areas of the business in the first half, with revenue for the period expected to be between £62.8m and £63.2m, representing an 8% increase year-on-year.

Due to the short-term downturn in US LiquiBand sales and lower Organogenesis royalty payments in the first half, operating margins were affected by product mix effects.

The board said it expected to report adjusted profit before tax of between £13.4m and £13.8m, around the same level as the £13.6m it recorded in the first six months of last year.

Looking ahead, both of AMS’ business units anticipated increased volumes in the second half.

As the business continued to improve, full-year revenue and adjusted profit before tax were expected to align with current consensus forecasts.

The company said it anticipated that the progress made on key projects, including the soft launch of Seal-G in Europe and the launch of LiquiBandFix8 in the US, would lay the foundation for accelerated growth in 2024 and beyond.

“AMS is on track to meet expectations for 2023 and to accelerate its growth thereafter as its expanding range of innovative products gains traction in key markets,” said chief executive officer Chris Meredith.

“I am very pleased with the progress we have made across the Group in the first half, especially with the speed of approval of the LiquiBandFix8 pre-market approval, and progress with partner discussions in the US for both LiquiBand and LiquiBandFix8.”

At 1355 BST, shares in Advanced Medical Solutions Group were up 2.33% at 219.5p.

Reporting by Josh White for Sharecast.com.