Growth in both Asia and Europe helped sales rise 26% to £4.1mln in the year to March though North America still provided the bulk of sales at £1.92mln.
In addition, the supply of pericardium tissue, used for heart valves, grew by 30% with the group strengthening its patent protection in Australia and New Zealand to meet the additional demand.
Funding not a problem
Losses for the year rose to £1.6mln (£866,000) as spending on new products rose but cash at the year-end was still a healthy £9mln following a well-backed £12mln share and debt funding in February.
Collagen’s traditional business has been the supply of bovine collagen materials to a medical use standard for implants, research and the like.
It’s stable basis, but to move forward the focus has switched to new, higher value “finished device products”, which will supplement the revenues from base business.
ChondroMimetic this year’s focus
Knee cartilage implant ChondroMimetic is a key component of the plan.
Acquired in 2015, Collagen recently started a follow-up study to assess its long-term performance on 17 patients treated 7-8 years ago.
If the study is successful, finding a partner for the product for a staged roll-out will be the next step, said Rushdy.
This will likely be in Europe first as the product would need to go through the regulatory process in the US.
Other bone graft and wound treatment collagen devices are also being explored.
A development and manufacturing agreement has been signed with Smart Matrix for an an advanced wound care scaffold, while a poster at the recent Society for Biomaterials (SFB) annual meeting in Minneapolis highlighted a surgical spray that encourages the growth of skin cells and blood vessels in large wounds.
At the moment, a sizable skin graft is often required to help heal these type of wounds. Collagen believes that by using the spray as well, a smaller amount of donor skin is required.
“Mostly we are investing research and development to complete and successfully commercialise regenerative medicine/finished device products,” CEO Rushdy told Proactive Investors.
“So that’s where most of our focus is going to be.”
Analyst Chris Donnellan at Cenkos believes the ChondroMimetic scaffold, which is designed to stimulate the regeneration of both joint cartilage and the underlying bone in patients with joint damage, has huge potential.
Estimates suggest that there are more than 250,000 cartilage procedures performed annually in the US.
In Europe alone the opportunity could be £340mln (€400mln), Cenkos reckons.
Even if it were to capture 5% of market share when established, that would still equate to £17mln of annual revenues, or around four times Collagen Solutions’ current turnover.
“We do not believe the current share price reflects the company’s ambition to grow its revenues by five-times over five-years, nor the full potential of the ChondroMimetic regenerative medicine scaffold,” said Donnellan.