Creo Medical — Consumables business divestment concludes

Creo Medical (AIM: CREO)

Last close As at 12/02/2025

GBP0.20

0.25 (1.28%)

Market capitalisation

GBP82m

More on this equity

Research: Healthcare

Creo Medical — Consumables business divestment concludes

Creo Medical has completed the sale of the majority (51%) stake in its European consumable business to Chinese medical device manufacturer Micro-Tech for net proceeds of c €30m (c £25m). The deal valued the mature European business at €72m on an EV/sales multiple of 2.3x and an EV/EBIT multiple of 20x. The company expects to receive the proceeds, currently held in escrow, imminently. We believe it will materially improve the liquidity position of the company as its strives to commercially advance its core portfolio of electrosurgical devices and foster partnerships for its proprietary Kamaptive technology. We will present our updated estimates for the deal closure in due course.

Jyoti Prakash

Written by

Jyoti Prakash, CFA

Analyst, Healthcare

Healthcare

Business update

13 February 2025

Price 19.50p
Market cap £80m

Pro-forma net cash/(debt) including proceeds from the capital raise and divestiture

£31.9m

Shares in issue

412.5m
Code CREO
Primary exchange AIM
Secondary exchange N/A
Price Performance

Business description

Creo Medical is a UK-based healthcare company focused on the development and commercialisation of minimally invasive electrosurgical devices. It has six products in the flagship CROMA platform, all of which have been CE marked and cleared by the FDA. Creo’s consumables business (through subsidiary Albyn Medical) is profitable, with a 51% stake divested to Micro-Tech in February 2025. Licensing opportunities for its Kamaptive IP (current partnerships with major robotics players Intuitive Surgical and CMR Surgical) offer further monetisation opportunities.

Analysts

Jyoti Prakash, CFA
+44 (0)20 3077 5700
Arron Aatkar, PhD
+44 (0)20 3077 5700

Creo Medical is a research client of Edison Investment Research Limited

Note: PBT and EPS are normalised, excluding amortisation of acquired intangibles, exceptional items and share-based payments.

Year end Revenue (£m) PBT (£m) EPS (p) P/E (x) Yield (%)
12/22 27.2 (28.6) (13.52) N/A N/A
12/23 30.8 (22.1) (6.17) N/A N/A

Creo’s European business primarily comprises Albyn Medical, which it acquired in July 2020. It markets both its own and third-party consumables and systems (primarily gastrointestinal endoscopy-related but also covering endourology, urology and urogynaecology), with a core focus on the UK and European markets. Creo had initially acquired a 90% stake in Albyn for an equity value of €24.8m and €2.7m in performance-related payments over two years. This was followed by the acquisition of a further 5% stake in March 2022 (for €1.2m and an additional €1.7m for the first earnout tranche) and the remaining 5% in April 2023 (for €1.2m and the pending €1.0m earnout tranche). The European operations accounted for the majority (c 89%) of Creo’s H124 revenues of £15.2m, although it recorded a year-on-year decline of 5.6% that was attributed to an exceptionally strong H123. For FY24, management expects consumables business revenue to exceed the FY23 figure.

We expect Creo to utilise the proceeds from the deal, along with £12.1m raised through an equity issue in October 2024, in development, marketing and launch activities for its core electrosurgical devices. This includes SpydrBlade, which is expected to be commercially available this year, and MicroBlate Flex (being developed alongside partner Intuitive Surgical’s ION robotics system), which is expected to be launched in 2026. In January 2025, Creo announced that a second site had been activated under the collaboration with Intuitive Surgical, with the first robotic-guided microwave ablation of cancerous lung tissue procedure performed in the clinical setting. Under the agreement, the companies expect to recruit a total of six sites across the UK and Europe, prior to commercial launch.

Following deal completion, the business will be accounted as an investment in associates, and we will present updated financials to reflect this. Revised guidance from management indicated that following the divestiture, break-even is now likely to be achieved in 2028 versus 2025 previously. We await further updates on this with the forthcoming FY24 results announcement.

General disclaimer and copyright

This report has been commissioned by Creo Medical and prepared and issued by Edison, in consideration of a fee payable by Creo Medical. Edison Investment Research standard fees are £60,000 pa for the production and broad dissemination of a detailed note (Outlook) following by regular (typically quarterly) update notes. Fees are paid upfront in cash without recourse. Edison may seek additional fees for the provision of roadshows and related IR services for the client but does not get remunerated for any investment banking services. We never take payment in stock, options or warrants for any of our services.

Accuracy of content: All information used in the publication of this report has been compiled from publicly available sources that are believed to be reliable, however we do not guarantee the accuracy or completeness of this report and have not sought for this information to be independently verified. Opinions contained in this report represent those of the research department of Edison at the time of publication. Forward-looking information or statements in this report contain information that is based on assumptions, forecasts of future results, estimates of amounts not yet determinable, and therefore involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of their subject matter to be materially different from current expectations.

Exclusion of Liability: To the fullest extent allowed by law, Edison shall not be liable for any direct, indirect or consequential losses, loss of profits, damages, costs or expenses incurred or suffered by you arising out or in connection with the access to, use of or reliance on any information contained on this note.

No personalised advice: The information that we provide should not be construed in any manner whatsoever as, personalised advice. Also, the information provided by us should not be construed by any subscriber or prospective subscriber as Edison’s solicitation to effect, or attempt to effect, any transaction in a security. The securities described in the report may not be eligible for sale in all jurisdictions or to certain categories of investors.

Investment in securities mentioned: Edison has a restrictive policy relating to personal dealing and conflicts of interest. Edison Group does not conduct any investment business and, accordingly, does not itself hold any positions in the securities mentioned in this report. However, the respective directors, officers, employees and contractors of Edison may have a position in any or related securities mentioned in this report, subject to Edison's policies on personal dealing and conflicts of interest.

Copyright 2025 Edison Investment Research Limited (Edison).

Australia

Edison Investment Research Pty Ltd (Edison AU) is the Australian subsidiary of Edison. Edison AU is a Corporate Authorised Representative (1252501) of Crown Wealth Group Pty Ltd who holds an Australian Financial Services Licence (Number: 494274). This research is issued in Australia by Edison AU and any access to it, is intended only for "wholesale clients" within the meaning of the Corporations Act 2001 of Australia. Any advice given by Edison AU is general advice only and does not take into account your personal circumstances, needs or objectives. You should, before acting on this advice, consider the appropriateness of the advice, having regard to your objectives, financial situation and needs. If our advice relates to the acquisition, or possible acquisition, of a particular financial product you should read any relevant Product Disclosure Statement or like instrument.

New Zealand

The research in this document is intended for New Zealand resident professional financial advisers or brokers (for use in their roles as financial advisers or brokers) and habitual investors who are “wholesale clients” for the purpose of the Financial Advisers Act 2008 (FAA) (as described in sections 5(c) (1)(a), (b) and (c) of the FAA). This is not a solicitation or inducement to buy, sell, subscribe, or underwrite any securities mentioned or in the topic of this document. For the purpose of the FAA, the content of this report is of a general nature, is intended as a source of general information only and is not intended to constitute a recommendation or opinion in relation to acquiring or disposing (including refraining from acquiring or disposing) of securities. The distribution of this document is not a “personalised service” and, to the extent that it contains any financial advice, is intended only as a “class service” provided by Edison within the meaning of the FAA (i.e. without taking into account the particular financial situation or goals of any person). As such, it should not be relied upon in making an investment decision.

United Kingdom

This document is prepared and provided by Edison for information purposes only and should not be construed as an offer or sol icitation for investment in any securities mentioned or in the topic of this document. A marketing communication under FCA Rules, this document has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and is not subject to any prohibition on dealing ahead of the dissemination of investment research.

This Communication is being distributed in the United Kingdom and is directed only at (i) persons having professional experience in matters relating to investments, i.e. investment professionals within the meaning of Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the "FPO") (ii) high net-worth companies, unincorporated associations or other bodies within the meaning of Article 49 of the FPO and (iii) persons to whom it is otherwise lawful to distribute it. The investment or investment activity to which this document relates is available only to such persons. It is not intended that this document be distributed or passed on, directly or indirectly, to any other class of persons and in any event and under no circumstances should persons of any other description rely on or act upon the contents of this document.

This Communication is being supplied to you solely for your information and may not be reproduced by, further distributed to or published in whole or in part by, any other person.

United States

Edison relies upon the "publishers' exclusion" from the definition of investment adviser under Section 202(a)(11) of the Investment Advisers Act of 1940 and corresponding state securities laws. This report is a bona fide publication of general and regular circulation offering impersonal investment-related advice, not tailored to a specific investment portfolio or the needs of current and/or prospective subscribers. As such, Edison does not offer or provide personal advice and the research provided is for informational purposes only. No mention of a particular security in this report constitutes a recommendation to buy, sell or hold that or any security, or that any particular security, portfolio of securities, transaction or investment strategy is suitable for any specific person.

London │ New York │ Frankfurt

20 Red Lion Street

London, WC1R 4PS

United Kingdom

More on Creo Medical

View All

Latest from the Healthcare sector

View All Healthcare content

Research: Healthcare

Cereno Scientific — CS014 achieves another Phase I milestone

Cereno Scientific’s second pipeline asset, CS014, continues to make steady progress through the clinic, with the company successfully completing the single ascending dose (SAD) part of the Phase I study which commenced in June 2024. The SAD part focused on evaluating the safety, tolerability and pharmacokinetics (PK) of CS014 in 30 healthy volunteers; results showcased a favourable safety profile. The second, multiple ascending dose (MAD) part of the study, which commenced in November 2024, is ongoing and management expects results in mid-2025, in line with previous guidance. CS014 is the company’s second histone deacetylase inhibitor (HDACi) and has demonstrated anti-fibrotic, reverse remodelling and anti-thrombotic properties in preclinical studies. The target indication for CS014 is idiopathic pulmonary fibrosis (IPF), a rare, progressive disease, with no curative treatments and an average survival of three to five years. Management intends to commence Phase II in H126.

Continue Reading

Subscribe to Edison

Get access to the very latest content matched to your personal investment style.

Sign up for free