Surgical secures exclusive deal with US firm

KEYHOLE surgery specialist Surgical Innovations has won an eight year exclusive contract with US-based CareFusion for its PretzelFlex device, which shifts the liver out of the way during surgery.

The device is particularly useful on obese people who tend to have large or swollen livers which can be tricky to move.

New data out yesterday claims that the US has a third of the world’s obese people.

Hide Ad
Hide Ad

The data, collected from the UN and the World Health Organisation, shows that while the average global weight per person is 62kg, Britons weigh 75kg and in the US the average adult weighs 81kg.

Almost three-quarters of people living in North America are now classed as overweight.

CareFusion has acquired exclusive US rights to PretzelFlex for eight years in what is thought to be a multi-million pound deal.

PretzelFlex is used to shift the liver out of the way during a gastric bypass.

Hide Ad
Hide Ad

For this type of operation the liver must be moved in order to obtain access to the upper stomach.

The device will be manufactured by Surgical for CareFusion and it will be marketed in the US under the CareFusion brand.

Surgical will retain the right to manufacture and distribute the device, under its own brand in all other markets.

Surgical is due to tell shareholders at its Annual General Meeting in Leeds today that it is committed to expanding in the US market.

Hide Ad
Hide Ad

The recent launch of the Vikon branded laparoscopic instrument range for Integrated Medical Systems will provide the group with further US exposure.

Chairman Doug Liversidge will tell shareholders that the NHS is showing increasing interest in its cost-effective devices as it faces pressures to produce annual savings of £20bn.

Surgical will say it is confident about the future growth prospects of the business and looks forward to reporting on its continuing success over the rest of the year.

PretzelFlex, which springs out to form a pretzel shape, generated significant interest from US surgeons at the recent SAGES congress (Society of American Gastrointestinal and Endoscopic Surgeons) in San Diego.

Hide Ad
Hide Ad

After receiving clearance from the US Food and Drug Administration in March, Surgical said this latest deal will ensure continuous revenue streams.

Analyst Michael King, at Nomura, said: “The news is reassuring as Surgical believes that the device will be an important element of its growth strategy over the next few years. We retain our ‘buy’ recommendation and end of year fair value of 13p per share.”

The shares closed up three per cent yesterday at 8.7p.

The deal comes two weeks after Surgical extended its distribution deal with Elemental Healthcare for five years.

Worth £5m over the period and tied to minimum contracted volumes, the deal will grant Elemental continued exclusive distribution rights to Surgical’s entire product portfolio within Great Britain.

Hide Ad
Hide Ad

Surgical’s chief executive Graham Bowland said a recent study by Elemental showed that hospitals that switched from disposable to ‘resposable’ instruments saved over £100,000 on 500 procedures and produced less clinical waste.

Resposable instruments have elements that are re-usable while others are disposable and work on much the same basis as a razor (reusable) and a razor blade (disposable).

The most common laparoscopic (keyhole surgery in the abdomen) operation is gall bladder removal, followed by obesity surgery such as stomach stapling and gynaecological operations such as hysterectomies.

The US currently accounts for around a quarter of sales, but Surgical believes this could increase to 40 to 50 per cent.

Hide Ad
Hide Ad

Following the success of its instruments in laparoscopic surgery, Surgical now wants to move into other areas.

Hip arthroscopy (minimally invasive surgery to treat problems with the hip joint) will be the first new market with pre-production devices due to be launched in the third quarter of 2012.

Once Surgical has cracked the hip market, it will look at the spinal market. Other possible areas are the heart, brain and lungs.

Related topics: