BORDEAUX, France & BOSTON--(BUSINESS WIRE)--IMPLANET (Euronext: IMPL, FR0010458729, PEA-PME eligible) (Paris:IMPL) (OTCQX:IMPZY), a medical technology company specializing in vertebral and knee-surgery implants, today announces its financial results for the 1st half of the year to June 30, 2016, as approved by the Board at its meeting of September 20, 2016.
| In € thousands - IFRS | H1 2016 | H1 2015 | ||
| Revenue | 4,094 | 3,307 | ||
| Cost of products sold | -1,943 | -2,173 | ||
| Gross margin | 2,152 | 1,134 | ||
| Gross margin (%) | 52.5% | 34.3% | ||
| Research & Development | -532 | -483 | ||
| Regulatory matters, Quality control | -510 | -472 | ||
| Sales, distribution and marketing costs | -2,606 | -2,283 | ||
| Operating costs | -526 | -398 | ||
| General costs | -1,534 | -1,773 | ||
| Operating Profit/Loss | -3,556 | -4,275 | ||
| Net Profit/Loss | -3,802 | -4,299 |
Revenue: further ramping up of Jazz in the United States and France
Over the 1st half of 2016, the Group recorded revenue of €4.094 thousand, up 24% compared with the 1st half of 2015, notably due to a further increase in Spine activity (+38% compared with H1 2015). This growth momentum was a direct result of Implanet’s growth in the United States and France, markets in which Implanet markets its Jazz technological platform directly and where sales increased by 101% and 40% respectively. Close to 800 surgical interventions were carried out using the Jazz technological platform in the 1st half of 2016, taking the total number of patients treated via this technology to more than 2,800 since its launch in 2013 (with more than 15,000 implants in total).
The substantial acceleration in the number of surgical operations carried out reflects the growing adoption of Jazz technology by surgeons around the world (111 surgeons as of June 30, 2016), notably due to the excellent clinical results obtained by Jazz in adults and adolescents and the growing use of Jazz technology on the degenerative bone disorder segment, the largest market segment.
Knee activity recorded a 12% increase in sales to €2.1 million over the first six months of the year. As anticipated, this increase was driven by the particularly buoyant growth of over 50% on the French market, which now accounts for over 70% of this division’s revenue.
Strong increase in the gross margin, tight control of the operational structure
In the 1st half of 2016, the gross margin came to 52.5% of revenue, a substantial improvement of 18.2 percentage points. This is a direct result of the increase of Jazz sales in the United States, the market with favorable unit sale prices and an excellent overall product and geographic mix.
The €302 thousand increase in operating expenses compared with the 1st half of 2015 was mainly due to the €323 thousand increase in sales and marketing costs that accompanied the buoyant growth in activity, in particular in the United States (including €184 thousand in personnel costs following the strengthening of the sales team and the appointment of Brian T. Ennis to head the US subsidiary, as well as a €173 thousand in sales commissions paid to sales agents).
Other operating costs remained stable compared with the 1st half of 2015, reflecting tight control over expenses.
Taking all these factors into account, Implanet recorded a 17% improvement in its operating result to -€3,556 thousand in the 1st half of 2016 (vs. -€4,275 thousand in H1 2015) and a 12% improvement in its net loss to -€3,802 thousand (vs. -€4,299 thousand in H1 2015).
Cash, cash equivalents and financial investments
As of June 30, 2016, Implanet had cash and cash equivalents of €2.0 million and financial investments of €1.9 million, i.e. a total of €3.9 million. Operating cash burn was €3.5 million in the first half of 2016, versus €4.6 million in the first half of 2015 (giving a 24% reduction in cash burn).
Implanet also has the possibility to request, under certain conditions, the subscription of 340 convertible bonds coupled with equity warrants (OCABSA) with L1 EUROPEAN HEALTHCARE OPPORTUNITIES FUND for a total amount of €3.4 million, and recently obtained an interest-free innovation loan of €0.8 million from Bpifrance Aquitaine.
Ludovic Lastennet, CEO of Implanet, says: “Over the first half of this year, we have successfully continued to implement our growth strategy in our direct markets: France and the United States. This strategy prioritizes the following development routes: continue our expansion via the contribution of the new Jazz Claw implant for major deformities and Jazz Lock implant for degenerative bone disorders, demonstrate Jazz’s clinical efficacy through major clinical studies and continue improving our financial performance through the ramping up in the United States and tight control over our spending.”
Significant milestones and events in 2016
Since the beginning of 2016, Implanet has continued its buoyant growth on the Spine segment (Jazz), the Company’s core business and main development priority, driven by conclusive results, notably in the United States and France.
Clinical
- Success of the first idiopathic scoliosis surgical procedure in Brazil using the Jazz platform;
- Launch of a multicenter clinical study designed to document the outcomes of Jazz technology in adult degenerative and adult deformity indications;
- Success of the first surgical procedures in France, Italy and the USA with the new Jazz Lock® implant.
Innovation / Regulatory
- American (510k) and European (CE) regulatory clearance granted for the new Jazz Lock® implant;
- American (510k) and European (CE) regulatory clearance granted for the new Jazz Claw® implant;
- Key US patent obtained, further strengthening Implanet’s competitive advantage in the United States.
Financing
- Listing on the OTCQX® International market in the United States;
- Issuance of the remaining bonds convertible into stock and stock warrants within the framework of the financing put in place in October 2015;
- Zero-interest innovation loan of €800 thousand agreed with Bpifrance.
Appointments
- Appointment of Brian T. Ennis as President of Implanet America;
- Appointment of Mary E. Shaughnessy, Senior VP Finance & Planning at the Partners CC group, as an independent Board member.
Next financial press release: revenue for the 3rd quarter of 2016, on October 25, 2016
About IMPLANET
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 2015 sales of €6.7 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 Compartment C of the
Euronext™ regulated market in Paris.