AorTech International PLC is incorporated in the UK and focused on the commercialization of its own world leading biostable co-polymer technology, Elast-Eon.
After a twenty-year history, AorTech has started to live up to its rich asset base in medical devices. A management restructuring, reduced cost base and business alignment was complemented by a fund raising in June 2018. The progress made since the fund raising has been noted by investors and the share price has nearly tripled in 20 months. Investors may worry that they have missed the opportunity in AorTech, but we think the alignment and maximisation of assets has probably only just begun.
The AorTech of 2020 is quite different to that of 15 years ago and the company starts the new decade in a good position. AorTech Vascular and AorTech Heart Valve are the two product-focussed division of AorTech where the collaboration with RUA Medical or their long development heritage respectively, are generating medical devices that are expected to have improved outcomes for patients and payers.
The three divisions demonstrate a diversified portfolio of businesses. The royalties in AorTech Royalty is a low risk, growing business. The Elast-Eon-coated graft and surgical patch products are medium-risk and near-term when compared to the AorTech Heart Valve which we view as having the highest risk and the highest potential value.
After many years in the making, AorTech is now in the right place at the right time - as demonstrated by the many historical transactions that have taken place in the heart valve and graft space - for the company to generate significant value.
Our sum of the parts valuation for AorTech suggests that there could be much further to run than in the share price appreciation in the last year as this value becomes recognised. We value AorTech at £99.2m or 676p per share.
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