There may be trouble ahead ...but trio of tips shine bright
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THE markets ended 2016 on a high note, with the FTSE 100 Index rising to a new record of 7,143. But there are considerable uncertainties about the year ahead, including Brexit negotiations and the early impact of Donald Trump’s presidency in the US. Against this backdrop, Midas has chosen three very different tips for the year, each of which should prove resilient to the wider economic and political environment. THEY are the second largest cancer killer in the world, so many countries, including Britain, have begun to offer screening procedures for bowel tumours to the over-55s. If any suspicious lumps and bumps are discovered, patients are whisked into hospital to have sections of their gut removed. The procedure is invasive and high risk. About one in 20 people die within 30 days and among those who survive, many suffer from life-changing conditions following surgery.
CREO MEDICAL has devised a safer, faster and much more precise alternative to gastro-intestinal surgery, whereby patients can be in and out of hospital in a day and still have potentially cancerous areas of their gut whipped away.
The company joined AIM on December 9 at 76p a share, the price has risen to 81½p and should increase substantially as the group’s technology catches on and it becomes increasingly successful.
Creo was founded by Professor Chris Hancock, formerly senior engineer at Gyrus Medical, a UK company that was acquired for more than £920million in 2007.
Gyrus was at the forefront of developing endoscopes, the long, thin tubes used for keyhole surgery. Creo has now taken that technology several steps further, enabling keyhole procedures to be completed under local anaesthetic rather than general in an operating theatre.
The company’s devices are attached to existing endoscopes and can be used to treat not only problematic lumps in the gut but also tumours in the lung. Lung cancer is the biggest cancer killer in the world, but treatment is predominantly via chemotherapy and radiotherapy, which cause considerable suffering and do not often result in a permanent cure.
Creo’s kit uses microwave technology to gently heat cancerous tissue, effectively rendering tumours benign.
Again, these procedures can be carried out under local anaesthetic, particularly helpful as lung cancer sufferers are often unable to withstand full-blown surgery.
Creo expects to launch its gastrointestinal devices this year, starting in the UK and on the Continent, and moving to the US in 2018. The group is also well advanced in gaining regulatory approval for its lung-related devices and others are expected to follow, including a kit for stomach ulcers and pancreatic cancer.
Over the past few years, Creo has won over several important supporters, among them Pentax Medical, a top maker of endoscopic products, which bought a stake in the company before it floated and remains a significant shareholder.
Based in Chepstow, Monmouthshire, Creo has received funding from Finance Wales and from the Department of Health’s Invention for Innovation programme, which helps to finance early-stage medical firms. Many globally renowned endoscopic specialists have also said the company’s equipment could transform their work.
Hancock remains on Creo’s board as chief technical officer, but the company is led by Craig Gulliford, a university colleague of Hancock’s turned successful entrepreneur. Gulliford’s intention is to offer their devices for free initially to influential members of the medical fraternity to win them over before beginning to charge for their equipment. Once the company has amassed sufficient converts, it is expected to gain ground relatively quickly, making money from the end of next year.
Midas verdict: Early stage medical companies always carry an element of risk, but Creo Medical seems better placed than most to achieve success and may even find itself on the receiving end of an early takeover approach. Fundamentally too, this company is in the business of saving and prolonging lives. A buy for the adventurous investor.