aap Implantate AG: FY/19: Good fourth quarter with EUR 3.1 million revenue (+17%) results in 9% revenue growth in fiscal year 2019 - Milestones in key technologies silver coating and magnesium-based implants

DGAP-News: aap Implantate AG / Key word(s): Preliminary Results/Quarter Results
28.01.2020 / 08:06
The issuer is solely responsible for the content of this announcement.

- Sales in FY/2019 at EUR 11.7 million (+9 %) with double-digit growth rates in the USA (+14 %) and in international markets (+10 %); continuation of the stable growth trend in Germany

- USA: Strong fourth quarter (+56 %) due to almost doubling the number of weekly surgeries compared with the same period of the previous year; conclusion of contracts with two national purchasing groups; well advanced talks on the conclusion of a development and supply contract with a worldwide leading US medical technology company

- Silver coating technology: Approval for clinical human study received from BfArM; further funding of up to approximately EUR 2.7 million for human clinical study granted by BMBF; approval of ethics commissions still required for start of study in Germany, documents submitted, approval expected shortly

- Magnesium-based implants: Promising initial results from pilot animal study with Colorado State University to obtain essential preclinical data; regulatory clearance path essentially agreed with FDA; discussions with technology-savvy investors for joint further development of the technology underway

Sales development FY/2019 and Q4/2019

In the financial year 2019 aap Implantate AG ("aap") achieved sales of EUR 11.7 million (FY/2018: EUR 10.8 million) according to preliminary figures and thus a value within the guidance of EUR 11.0 million to EUR 13.0 million as published in August 2019. In the fourth quarter of 2019, the company realized sales of EUR 3.1 million (Q4/2018: EUR 2.6 million).

Sales FY/2019

Sales Q4/2019

aap closed the financial year 2019 with a good fourth quarter and achieved strong sales growth of 17% to EUR 3.1 million (Q4/2018: EUR 2.6 million). The US market and international business developed very positively, with growth rates of 56 % and 20 %, while business in the German domestic market showed a temporary slight decline (-7 %). For the full year 2019, the company was thus able to achieve revenue growth of 9 % to EUR 11.7 million (FY/2018: EUR 10.8 million). Thereby the stable growth trend in the German market was also continued in 2019. Business in the international markets also developed positively, with growth of 10 %, which was mainly due to the expansion of existing customer relationships. In the USA, following a stabilizing phase in the first nine months, a dynamic development has been observed since the end of September. Thus, the number of weekly surgeries almost doubled compared to the same period of the previous year. In the fourth quarter the company also concluded contracts with two national purchasing groups that will give aap access to a nationwide network of hospitals and surgical centers in the future. Talks are also currently being held with other nationwide active purchasing groups. In addition, the company is in well advanced discussions on the conclusion of a development and supply agreement with a worldwide leading US medical technology company. These developments should also be reflected in further corresponding sales momentum in the USA in the fiscal year 2020.

Regarding its innovative antibacterial silver coating technology, aap achieved important milestones in the financial year 2019. In August the company received approval from the German Federal Institute for Drugs and Medical Devices ("BfArM") to conduct a human clinical study. aap is thus the first company worldwide to test an antibacterial silver coating on anatomical plates for fracture treatment in a study of this kind. In order to start the study in Germany, aap now needs the approval of the ethics commissions, which has been applied for and whose approval is expected shortly. At the same time, training of the doctors participating in the study has been started and preparations have been made to equip the corresponding clinics with silver coated implants. In addition, in November, the company received a further grant from the German Federal Ministry of Education and Research ("BMBF") of up to approximately EUR 2.7 million for the conduction of the human clinical trial. In a first step, aap had received a funding commitment for the conception and qualification of human clinical study of up to around EUR 0.7 million. The latter developments are being followed with great interest by various global orthopedics companies that have reaffirmed their interest in aap's innovative silver coating technology in talks currently underway.

In the financial year 2019 aap also made substantial progress in the field of magnesium-based implants. For example, a pre-submission meeting was held with the US Food and Drug Administration (FDA) at the beginning of December, at which the regulatory clearance path was essentially agreed. In addition, a pilot animal study to obtain essential preclinical data that started at the end of September with the renowned Colorado State University, has shown first very promising results with regard to bone formation as well as low gas formation during the degradation process of the bone-like magnesium-based implants. At the same time, the company has intensified discussions with technology-savvy investors in order to provide the financial basis for the joint further development of the technology in a timely manner. aap will from 2020 bundle all further development activities under the umbrella of its existing subsidiary MAGIC Implants GmbH to make the further progress more transparent to the outside world.

In the fourth quarter, the Management Board continued its analysis to identify cost reduction and efficiency improvement potential. In this context, measures such as the change of the stock exchange listing and the discontinuation of parts of the standard trauma portfolio were already implemented in the 2019 financial year. Particularly in view of the ever-increasing regulatory requirements (e.g. conversion to MDR while maintaining certificates and approvals under currently valid regulations or sterile-packaged products) and the resulting cost consequences, the Management Board is currently intensively evaluating the economic viability of certain business activities and, in connection with this, further measures to reduce the cost structure (e.g. reduction/discontinuation of marketing and sales activities in certain markets, make-or-buy considerations for instruments, reduction of personnel, etc.). In view of its innovative key technologies - antibacterial silver coating technology and magnesium-based implants - aap will further intensify talks and negotiations with interested global medical technology companies and technology-savvy investors. All these measures shall form the basis for sustainable and profitable growth.

The company will provide information on the outlook for fiscal year 2020, the management agenda, decisions taken in connection with the cost-reduction program and details of the company's future financing in a separate announcement in the course of the next few weeks.

The sales figures contained in this press release are provisional figures as of December 31, 2019 and may still be subject to change until final publication. aap plans to announce the final, audited results for the financial year 2019 on March 30, 2020 in its consolidated annual financial report for 2019.

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^1] In the previous year, sales to Puerto Rico were reported as part of North America (distributors); as of Q3/2019 as part of RoW (= Rest of World).


aap Implantate AG (ISIN DE0005066609) - General Standard/Regulated Market - All German stock markets -

About aap Implantate AG
aap Implantate AG is a globally operating medical device company headquartered in Berlin, Germany. The company develops, manufactures and markets trauma products for orthopaedics. The IP protected portfolio includes besides the innovative anatomical plating system LOQTEQ(R) and trauma complementary biomaterials a wide range of cannulated screws. Furthermore, aap Implantate AG has an innovation pipeline with promising development projects as the antibacterial silver coating technology and magnesium-based implants. These technologies address critical problems in surgery that haven't yet been resolved adequately. In German-speaking Europe aap Implantate AG directly sells its products to hospitals, buying syndicates and hospital groups while it uses a broad network of distributors in more than 25 countries at the international level. aap Implantate AG's stock is listed in the General Standard segment of Frankfurt Stock Exchange (XETRA: AAQ.DE). For more information, please visit www.aap.de.

Forward-looking statement
This release may contain forward-looking statements based on current experience, estimates and projections of the management board and currently available information. They are not guarantees of future performance. Various known and unknown risks, uncertainties and other factors could lead to material differences between the actual future results, financial situation, development or performance of the company and the estimates given here. Many factors could cause the actual results, performance or achievements of aap to be materially different from those that may be expressed or implied by such statements. These factors include those discussed in aap's public reports. Forward-looking statements therefore speak only as of the date they are made. aap does not assume any obligation to update the forward-looking statements contained in this release or to conform them to future events or developments.




Contact:
For inquiries please contact:
aap Implantate AG, Fabian Franke, Investor Relations, Lorenzweg 5, 12099 Berlin, Germany
Tel.: +49 30 7501 9-134, Fax: +49 30 7501 9-290, e-mail: f.franke@aap.de

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