RXB Rex Bionics

TIDMRXB

RNS Number : 1403A

Rex Bionics PLC

18 December 2014

This announcement is made in compliance with the AIM Rules for Companies, and is not intended to be published or distributed in or into the United States of America

Rex Bionics plc

Trading update

Key objectives for 2015 outlined

Rex Bionics plc (AIM: RXB), the pioneer of the REX Robot technology that enhances the mobility of wheel-chair users, provides an update on progress since the Interim Results on 5 August 2014 and sets out its key objectives for 2015. The period since the Company's IPO in May of this year has been one of intense activity across all aspects of the business, and although sales are currently materially behind market expectations, the Board remains confident about the Company's future commercial success.

Market update

The application of robotic technology for wheel-chair users in the Rehabilitation and home care settings is rapidly gaining traction, and we continue to believe that it offers a substantial and growing market opportunity. The benefits of standing and exercising are well-documented; and REX provides more practical and comfortable means of standing and exercising. More specifically, REX is the only product that does not require the use of crutches. This offers two critical advantages for wheel-chair users as well as healthcare providers and payers. First, it makes REX the only option for the large number of wheel-chair users for whom the use of crutches is precluded by the severity or level of their injury; and second, it offers REX users the freedom to use their arms and hands for work or recreational activities while in a standing position.

In line with the strategy outlined at the time of the Company's IPO, the Board expects that these important differentiating factors for REX will enable it over time to establish a significant market position. When, however, the price of a medical product runs into tens of thousands of pounds, most clinicians and providers require published evidence of a health benefit; and the generation of this data is now a high priority.

Sales and marketing activity

We have continued to expand our commercialisation activities and now have a number of potentially promising sales opportunities to develop in the UK, US and Australia and New Zealand; as well as earlier-stage opportunities in three other large countries. We have also made positively-received presentations at a senior level to the US Army and the US Veterans Affairs organisation - and the development of our US activities will be a priority into 2015.

On 9 December 2014 we announced an innovative collaboration with PhysioFunction, one of the UK's leading providers of specialist Neurological Physiotherapy and Rehabilitation Technology services, to enable PhysioFunction to offer Robot-Assisted Physiotherapy using the REX technology to its substantial customer base at fifteen physiotherapy clinics around the UK. Under the terms of the collaboration the Company will provide a REX to PhysioFunction in return for a share of the customer fees charged by PhysioFunction for each session with REX. PhysioFunction successfully completed a full programme of Robot-Assisted Physiotherapy sessions using REX in the first week of operation, and we will be further evaluating this business model.

REX continues to attract UK national media publicity and, increasingly, enquiries from personal injury claimants and their lawyers. We have been approached by a number of charities and individuals about providing a REX to their local rehabilitation unit.

We have invested in our global sales/marketing/business development team and now have optimal coverage in the UK and Australia/New Zealand. We intend to continue with our recruitment programme for commercial representation in the coming months, including expanding our direct representation into the US and seeking to expand our distributor representation in Europe, the Middle East and Asia.

Reference Centres and Clinical data

We have initiated a global Reference Centre programme with Rehabilitation Clinics in the UK (PhysioFunction in Northampton), the USA (Houston Methodist Hospital, Texas and James J Peters Veterans Affairs Medical Center, New York City), and New Zealand (Healthvision New Zealand, Auckland), and plan to continue to build this network to ten Reference Centres by the end of 2015. We intend that Reference Centres, led by neuro-rehabilitation opinion-leaders will offer Robot-Assisted Physiotherapy with REX, provide leadership in our clinical trial programme and offer an appropriate environment for user evaluation of REX for home use.

Pipeline

Rex Bionics is working across three continents with some of the world's leading research institutions in the field of control of a robot with non-manual control systems. In September, Jose Luis Contreras-Vidal, Professor of Electrical, Computer and Biomedical Engineering at the University of Houston, Texas, presented and filmed a working prototype of a mind-controlled REX at a scientific conference in Spain which showed how REX's superior stability and safety makes it an ideal choice for therapies designed for people with the most severe disabilities.

In line with our plan, we are working on a number of other enhancements to the current REX product that are intended to further increase its therapeutic effect and to provide access to new categories of users. These include in-built electrical stimulation technology, user performance data analytics and a number of new country registrations.

Manufacturing

As outlined at the time of the IPO, the Company's manufacturing operations in New Zealand have been relocated to a new facility near Auckland in order to create production capacity for expansion and this is now available to meet current demand. A full validation of all manufacturing systems is required and work is underway to complete this for all products by the middle of 2015.

Trading update

For all of the reasons above the Board continues to have confidence in the Company's future commercial success. It has, however, become increasingly clear that, despite professional and focused effort in target markets, the sale of REX on commercial terms and on any scale to healthcare institutions requires clinical data on the health benefits, as distinct from, albeit very positive, wheel-chair user feedback. As described below we are taking steps to generate as rapidly as possible the clinical data required to support the clinical and quality-of-life benefits that we believe REX can deliver, but this will take some time. We now expect, therefore, that sales in the period ending 31 March 2015 will be only a nominal amount, with some improvement in the first half of our 2015/16 fiscal year (April-September period), and with a stronger growth trajectory starting towards the end of the 2015-16 fiscal year.

The Company's cash position at 30 November 2014 was GBP5.8m. Excluding expenditure of a one-off nature relating to the IPO, cash consumption in the last six months has amounted to approximately GBP2.6m.

Key objectives for 2015

The Board has established a set of Key Objectives for 2015, outlined below, for completion by March 2016 to coincide with the financial year-end. These are as follows:

1 Implementation of clinical trials whose results will persuade the rehabilitation community of the clinical benefit and value-for-money of REX. We expect the first of these trials to be initiated early in 2015.

2 Implementation of a US Clinical Trial, to secure FDA 510(k) clearance of REX for At-Home use in the USA. We have brought this programme forward in view of the quality and size of the opportunity. Our aim is to file a pre-market notification (510(k)) with FDA before the end of Q2 2016. A favourable review could then lead to clearance for At-Home use in late 2016. The first significant milestone in this programme would be approval by FDA of an Investigational Device Exemption (IDE) for the start of this trial.

3 Evidence of progress with other projects that demonstrate the value of REX in accelerating the rehabilitation of patients who have experienced other traumatic or degenerative neurological injury. This potential application is at least as large as the market for people with spinal cord injury.

4 The recruitment of further Reference Centres in order to achieve our target of ten Reference Centres by the end of 2015.

5 The recruitment of distribution partners and other commercialisation initiatives.

Crispin Simon, Chief Executive, commented:"REX allows people in wheel chairs to stand and to walk, which creates many health and quality of life advantages. Now we need to turn this remarkable technology into a really valuable, high performance business. Based on the positive feedback to date from the marketplace, and with the plans we have now put in place, I have every confidence that we can."

For further information please contact:

Rex Bionics Plc

Crispin Simon, Chief Executive Officer

+44 (0) 781 086 6386

Peter Worrall, Chief Financial Officer

+44 (0)1428 645416

Oriel Securities Limited (NOMAD and Broker)

Juliet Thompson/Jonathan Senior

+44 (0) 20 7710 7600

Consilium Strategic Communications

Mary-Jane Elliott / Jessica Hodgson / Lindsey Neville

rexbionics@consilium-comms.com

+44 (0) 203 709 5700

About Rex Bionics plc

Rex Bionics (AIM: RXB) is the AIM-listed pioneer of the REX Robot that enhances the mobility of wheel-chair users. Founded in Auckland, New Zealand by two robotics engineers with first-hand experience of wheelchair users and their needs, Rex Bionics is working with physiotherapists to develop the practice of Robot-Assisted Physiotherapy (RAP). In a session of RAP, REX lifts patients from a sitting position into a robot-supported standing position, allowing them to take part in a set of supported walking and stretching exercises, designed by specialist physiotherapists.

Wheelchair users are at risk of developing numerous medical complications from extended periods of sitting. By enabling them to spend more time standing, walking and exercising, REX may offer significant health benefits, including improved sleep, cardiovascular performance, maintenance of joint range, and a reduction in common abdominal problems and prescription drug use. A programme of clinical trials is now under way to evaluate these potential benefits.

REX is used by people with complete spinal cord injury, as well as people who have suffered a stroke or other traumatic brain injury; and people with multiple sclerosis and muscular dystrophy. REX P, for use in the home, enables users to walk and stand with their hands free - providing more work and recreation options.

In May 2014, Rex Bionics joined AIM with a fundraising of GBP10 million (gross) to scale up production, distribution and marketing internationally, in order to support growing demand for both REX products as well as developing the next generation of REX devices, REX 3.

REX is not approved for At-Home use in the United States of America.

This information is provided by RNS

The company news service from the London Stock Exchange

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