Lombard Medical Technologies (NSDQ:EVAR) said yesterday that it’s bailing out of the U.S. market after an FDA decision requiring a 50-patient clinical study of its Intelliflex low-profile delivery system for the Aorfix stent graft.
Lombard said it eliminated its U.S. sales force and moved most of its commercial operations to its U.K. facility, significantly reducing its cash burn.
Irvine, Calif.-based Lombard said it plans to focus exclusively on the European Union, Japan and other “key” international markets. The company in June won CE Mark approval in the European Union for the IntelliFlex device.
“In the U.S., the FDA is requiring additional clinical data to support the application for U.S. approval of the IntelliFlex delivery system. This pushes the potential approval timeline out significantly. We have, therefore, decided to discontinue funding commercial operations in the U.S. at this time and instead solely focus our resources on growing revenue in Europe, Japan and other key international markets where we are able to benefit from the enhanced Aorfix delivery system as well as the direct and synergistic effect of Altura,” CEO Simon Hubbert said in prepared remarks.
“Our shift in geographical commercial focus is starting to deliver strong sales growth in the Western Europe direct markets as Altura gains traction. We expect to see this growth accelerate as we expand Altura into new centers. We are very encouraged by the physician feedback and excellent clinical results we are seeing from Altura and believe that with the introduction of the new IntelliFlex delivery system for Aorfix, we now have a world-class product portfolio providing a full range of solutions for the treatment of [abdominal aortic aneurysms],” Hubbert said.
Lombard also said it tapped investment bank Cain Brothers to explore options, including a sale of assets or even the entire company. The company said it will also separately pursue other “financial opportunities.”
During a conference call with investors yesterday, Hubbert said the company still plans to pursue an investigational device exemption from the FDA for both the Intelliflex delivery system and the Altura graft.
“[W]e certainly don’t think this is us pulling out forever, but certainly a pause for now,” he explained, according to a Seeking Alpha transcript. “We are continuing with the regulatory effort to get the IDE study approved for IntelliFlex. We’ve submitted the protocol to FDA for review. We’re obviously going to hold off recruiting that study, but we want to get the IDE study approved so we’re ready to go and recruit those patients, should it be appropriate to go and do so.”
“And we anticipate continuing the regulatory effort to get the IDE study approved for Altura, but again not to recruit those patients just now,” Hubbert added.
The news, announced as part of the company’s 2nd-quarter earnings release, sent EVAR shares up 4.6% to a $1.14 close yesterday; the stock jumped a further 2.6% after hours, rising to $1.17 apiece.
Lombard said Q2 losses widened 1.5% to -$8.3 million, or -42¢ per share, on a -16.1% sales decline to $3.8 million compared with Q2 2015. The company cut its sales outlook for the year to $13 million to $15 million, down from roughly $18 million previously.