MIDAS SHARE TIPS: Creo surgical instruments can be a game-changer
Creo Medical is a small UK healthcare company that is attracting the attention of the biggest and best.
Intuitive Surgical makes da Vinci robots, which have revolutionized the operating room worldwide.
The biotechnology company, valued at $170 billion (£130 billion) on the New York market, has also developed a way to detect tiny nodules in the lungs using an ultra-thin tube inserted through a patient’s mouth.
Attracting attention: Creo Medical is a small British healthcare company that has attracted the attention of the biggest and best
The procedure is performed robotically and is quick and simple, but is designed to detect lumps, not remove them. In 2021, Intuitive approached Chepstow-based Creo for help.
Creo has invented surgical instruments small enough to fit inside long, flexible endoscopic tubes.
The kit is already being used to treat various forms of early-stage colon and stomach cancer, so Intuitive felt that Craig Gulliford, CEO of Creo, would be the right person to take the diagnostic technology further.
Early results suggest Intuitive was right. The first operation was successfully performed at the Royal Brompton Hospital in London, more have been performed since and the program is being tested in the UK and Europe.
The procedure should be widely available within a few years, not only here but also in America.
This could be a breakthrough in the medical world, as it could help diagnose and treat small, suspicious lumps in the lungs before they spread.
Success could also change Creo’s fortunes, sending its share price plummeting after years of disappointment.
Gulliford floated his company on AIM in 2016 at 76p. Shares rose to over £2 in 2019 but are now down to just 28p, largely due to bad timing and a lack of funds.
After receiving regulatory approval for his groundbreaking equipment, Gulliford was about to roll it out when Covid hit.
A £30m fundraising was completed in February last year for just 20p and the funding has put the business on track. Sales teams are firing on all cylinders and revenues are rising as Creo wins over doctors worldwide.
Brokers expect turnover to rise by around 30 per cent this year to £40m, rising to almost £55m by 2025. The group is still making losses but should turn a profit next year.
Creo is also changing the way colon cancers are treated, allowing doctors to remove tumors or lumps using endoscopic tubes instead of open surgery.
This market is estimated at over £700 million. The partnership with Intuitive has similar potential and Creo has developed other tools too.
MIDAS VERDICT: Creo shares have been on a rollercoaster ride since their IPO, but the outlook should be considerably brighter, especially after the tie-up with world-famous Intuitive. At 29p, the shares could prove to be a bargain.
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