Creo Medical shares power ahead; broker believes med-tech group as at an inflexion point
Published: 05:34 17 Feb 2023 EST
Creo Medical Group PLC (AIM:CREO), a developer of minimally invasive surgical kit, is at an 'inflexion point' based on a growing user base and increasing adoption of its core devices, according to Cenkos.
In a note, the corporate broker has rated the shares as ‘buy’ with a 99p price target after a successful and oversubscribed fundraise brought in £28.5m.
Concerns allayed
The latest cash influx will remove cash concerns and allows investors to focus on the significant market opportunity that Creo’s technology addresses, said Cenkos.
The company has been focused on expanding its minimally invasive surgical technology to treat gastrointestinal and gynaecological conditions.
According to the research note, Creo Medical’s portfolio of products has the potential to transform cancer treatment, validated by early clinical outcomes.
Cenkos forecast group revenues of around £100m by 2027, with a significant contribution from its flagship Speedboat product and devices for upper and lower gastrointestinal procedures.
Further upside?
Importantly, it included only £9m of revenues from Kamaptive licensing, which Cenkos believes leaves significant upside given the scale and commercial reach of Intuitive, in particular.
The medical technology firm’s outlook is strong and the broker believes Creo is at a significant inflexion point with a growing user base and increasing adoption of its core devices.
Cenkos also noted that the validation of Kamaptive technology through the first two licensing agreements has been a success.
The research note shows Creo is predicted to become cash generative in 2025, with subsequent strong profit growth driven by expansion into a broad range of therapeutic indications.
Licensing model
Cenkos added that Creo’s licensing model could see the first-in-human robotic procedure using Kamaptive technology during 2023.
Creo’s partner, Intuitive, has the largest installed base of surgical robots undertaking a growing number of procedures.
The company’s recent fundraising of £28.5m, plus a potential £5.2mln from an open offer of stock, is expected to remove current cash concerns and allow investors to focus on the significant market opportunity Creo’s technology addresses, investors were told.
At 10.35 am the shares were changing hands for 29.45p, up 20%.
