LONDON (ShareCast) - (Sharecast News) - Surgical and advanced wound care specialist company Advanced Medical Solutions Group updated the market on its trading for the year ended 31 December on Wednesday, reporting that its financial results for the year were in line with revised consensus forecasts, with profits slightly above consensus and sales, impacted by sterling appreciation in the fourth quarter, which was slightly below consensus.
The AIM-traded firm said the third-party sterilisation issue, first flagged in November, was resolved, with the plant now fully operational and no further impact expected.

It said that, due to the actions it took to mitigate the issue, the impact in 2019 was less than its initial worst-case forecast, adding that the company was progressing with additional contingency plans to minimise the risk of any future disturbance in the event of a similar breakdown.

In the surgical business unit, AMS said that as it had previously reported, revenue for the year was impacted by a downturn in US 'LiquiBand' sales and by the unexpected failure at one of its third-party sterilisation facilities..

Good growth was said to have been delivered across the rest of the unit, particularly for 'LiquiBandFix8' and the 'RESORBA' portfolio.

US LiquiBand performance was expected to recover over the course of 2020, based on FDA approval of 'LiquiBand Rapid', which the board said was expected imminently and would allow one of its main partners to "regain ground" with an improved product.

It also pointed to the launch of 'LiquiBand XL', which would allow the firm to compete in the treatment of large wounds and unlock further growth potential in its LiquiBand business.

The board said the clinical trial would be completed in February, and subject to a successful outcome and FDA filing, approval was expected in the second half of 2020.

AMS said the US clinical trial to support the premarket approval for LiquiBandFix8 was progressing "well" in terms of surgeon feedback, although patient recruitment was slower than anticipated.

As a result, an additional clinical site was added to the trial.

Looking at the wound care business unit, AMS said growth was delivered with antimicrobial dressings and with 'ActivHeal', despite continued challenges facing the wound care market.

Exudate management, being standard foams and fibres, declined in the year, but the board said there was "significant" partner interest in its new surgical high performance dressing, which it was on track to launch in the first half of 2020.

On the mergers and acquisitions front, the company said the successful 2019 acquisitions of Sealantis and Biomatlante demonstrated its strategy of acquiring strategically-aligned businesses in adjacent spaces with significant commercial synergies.

The integration of both was said to be progressing to plan, with the company's strategy continuing to grow AMS both organically and through appropriate acquisitions, the board said.

Looking ahead, AMS said that, supported by new product approvals, it expected to deliver about 10% organic growth in 2020, with the Biomatlante acquisition delivering additional revenue.

The board said it was continuing to believe that the Medical Device Regulation would generate further growth opportunities in the coming years, as AMS was said to be "well placed" to address the new, higher standards.

"'I am pleased to report that despite the significant challenges in 2019, the group is expected to report financials in line with revised consensus forecasts," said chief executive officer Chris Meredith.

"The acquisitions of Sealantis and Biomatlante have provided substantial new product opportunities for the group and increased our investment in exciting new areas of research and development with significant commercial benefits expected in both 2020 and 2021.

"We look forward to regaining positive momentum in our US LiquiBand business in 2020 once our new products are approved and the Board is optimistic about our long-term growth prospects.'"

Advanced Medical Solutions said it intends to publish its preliminary results for the year ended 31 December on 11 March.

At 1557 GMT, shares in Advanced Medical Solutions Group were up 5.96% at 293.5p.

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