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Aortech makes loss but sees better times ahead as royalties start

By Liz White, UT staffSurbiton, UK-Despite making a loss after tax of £1.87 million ($3.28 million) for the year ended 31 March 2005, compared to a profit of over £500 000 for the previous year, medical polyurethanes developer AorTech International plc is feeling optimistic about the future. The firm said in its 2005 results statement that it expects to see the first human use of its Elast-Eon biomaterial within the year. This will start generating royalties for the UK-headqartered group, which has development and manufacturing facilities in Australia. Aortech, which is developing new uses such as breast implants for its Elast-Eon biomedical silicone-polyurethane material, finished the year with £4 million in net cash, versus nearly £6 million in fiscal 2004. Having come through a major refocus of the business, AorTech now has a number of exciting products and applications based on Elast-Eon,” said Frank Maguire, chief executive of AorTech, in a company statement. “Our work to develop the Masterfile for the FDA is a credit to our team as their commitment is now being reflected in real commercial opportunities,” he added. Aortech “believes that the first human use of Elast-Eon and the generation of the first royalty income for the business will occur within one year,” commented chairman Jon Pither, in the results statement. This will have a positive effect on the biomaterial licensing and supply business and stimulate steadily growing revenue streams from increasing numbers of licensing deals and projects, Pither added. “I am delighted at the progress we have made with both our ‘generation 5,’ safer surgical type breast implant and the breakthroughs we are experiencing with the development of a true minimally invasive breast implant,” The Aortech chairman continued. AorTech’s Board is looking forward to increasingly positive commercial results in the coming year, with a number of new applications and licensees, according to Pither, Prospects exist for clinical use of Elast-Eon in long-term implants which need “extraordinary fatigue performance, abrasion resistance, blood compatibility and general physical strength,” he said. Highlights for Aortech for the year include: •Expansion of the master technology database for Elast-Eon; •Successful bench testing of formulations for spinal disc applications;•Major internal developments in next-generation breast implants;•Development of form-stable, metal-free and ultra-low extractable gels; and •Support for client manufacturing as part of first human use, and The group is also initiating a name change to AorTech Biomaterials plc which will be proposed at AGMTurnover in the year ended 31 March 2005 was £136 958 (2004 £360 185), whilst operating expenses for the year were £2.2 million-some 13 percent less than in 2004. Aortech’s loss must be looked at in the context of gains on exceptional items in 2004 of over £500 000, and receipt the same year of nearly £2 million in tax credits in respect of development work during earlier years.”

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