aap Implantate announced its H1 results with a 5% increase in l-f-l sales to €5.4m. This increase was predominantly due to a reported 14% Trauma sales growth in H1 despite Q2 Trauma sales remaining flat versus the previous year’s €2.3m, though still broadly in line with management’s expectations. H1 positives include growth in established markets where aap Implantate has focused initiatives to drive sales (North America +26% and DACH region +10%). Traction in these markets (Europe and the US) remains key to a sustained return to growth.
aap Implantate has focused sales initiatives in its established markets, both of which have shown good growth in H1 (26% North America and 10% DACH region). Q2 was a slower sales quarter than Q1 with Q2 Trauma sales flat on the previous year (€2.3m). Importantly, however, results remain in line with guidance. The H117 cash position of €24.8m will be utilised to increase value to shareholders, a part of which has been a voluntary public share buyback in H117.
aap Implantate also announced that it is exploring strategic alternatives in order to create more value from its Trauma product portfolio and its patented platform technologies as well as building on its strengthened financial position following the divestment in 2016 of its biomaterials and aap Joints businesses. There are various options potentially available to management (co-development, licensing, joint ventures asset and share deal), although all of these options require aap Implantate attracting an interested party. The orthopaedics market is dominated by a small number of large companies, which are often acquisitive in order to bring in innovative products and/or improve existing products to create a leading, differentiated proposition. If aap Implantate can demonstrate a return to sustained growth now it has streamlined its focus on Trauma, the company could attract M&A interest.
aap Implantate has three technologies in its trauma portfolio: its anatomical plating system LOQTEQ for fracture repair (being marketed); its antibacterial silver coating technology (in regulatory process); and absorbable magnesium (in development). Areas of focus which, if delivered, could offer upside include established revenue growth in the established markets of North America and Europe, execution of a technology deal for its LOQTEQ and/or its silver coating technology with a larger player and decisive steps for CE marking and FDA approval for its silver coating technology.