Edison Investment Research Limited
London, UK, 5 October 2021
Creo Medical (CREO): Initiation - Providing energy for endoscopic surgery
We are initiating coverage of Creo Medical, which is developing and commercialising minimally invasive electrosurgical devices. Its CROMA platform delivers a combination of bi-polar radiofrequency (RF) and microwave energy for the purpose of dissection, resection, ablation and haemostasis of diseased tissue. The initial focus will be on gastrointestinal (GI) procedures but will expand into soft tissues (such as the pancreas) and pulmonology. The company has had all six products within the CROMA platform CE marked and four are also cleared for use by the FDA, with the other two expected to be cleared in the coming months.
We value Creo Medical at £434m or 240p per basic share using a risk-adjusted net present value (NPV) model. The vast majority of the value is attributable to the CROMA platform (especially the GI market) with the remainder divided between the value of Albyn Medical and net cash. Creo Medical had reported that it had £30.6m in cash and £10.7m in debt at the end of H121 and raised £36.3m in gross proceeds in a Q321 placement and open offer.
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