Business
Trading Statement
Trading Statement.
About this update from Advanced Medical Solutions Group Plc
[{"type":"text","content":"\n\n4 September 2023\n \nAdvanced Medical Solutions Group plc\n(\"AMS\" or the \"Group\")\n \nThis announcement contains inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) No 596/2014 (as it forms part of Retained EU Law as defined in the European Union (Withdrawal) Act 2018).\n \nTrading update\n \nWinsford, UK: Advanced Medical Solutions Group plc (AIM: AMS), the world-leading specialist in tissue-healing technologies, today announces a trading update following recent events that have impacted financial expectations for the year ending 31 December 2023. \nOrganogenesis US reimbursement coverage\nAs reported in the July trading update, our first half was impacted by reduced royalty income from the patent licencing agreement with Organogenesis Inc. that ends in September 2026. More recently, in August 2023, Organogenesis announced that changes to US reimbursement coverage for the treatment of diabetic foot ulcers and venous leg ulcers has created uncertainty regarding the revenue outlook for some of its key products, including those utilising AMS patents.\n \nGiven that Organogenesis has withdrawn its own guidance and that we have no control of, and minimal insight into its sales, we are unable to quantify the financial impact on AMS at this stage. We therefore believe it to be prudent to remove this royalty in its entirety from Q4 2023 guidance onwards. The total 2023 full year impact of the lower royalty is expected to be a reduction of £2 million to adjusted pre-tax profit. In FY24 and FY25, the removal of the royalty is expected to reduce adjusted pre-tax profit by £4 million per annum with a similar pro-rata impact in FY26 until the end of the agreement in September 2026.\n \nUS LiquiBand® destocking \nAs part of its enhanced partner strategy in the US announced in March, the Group has had positive discussions with its partners and has made good progress with new agreements aimed at delivering stronger growth from early 2024 onwards. This process has taken longer than first anticipated and associated destocking has been greater and it is clear that the FY23 impact will be more significant than previously estimated, impacting revenues just in the current year.\n \nThe destocking has not affected LiquiBand® end sales demand and the pipeline of eva...