Lombard Medical Technology close to US approval

Lombard Medical Technology is rising today following seemingly positive news on the prospect of it receiving approval from the US Food and Drug Administration to sell its medical device in the US.

The Aim-listed company has received written feedback from the FDA asking a couple of questions, which the company says are "relatively straightforward". Lombard Medical intends to answer them within two weeks.

In addition, the FDA has scheduled a Good Manufacturing Process audit of the company's UK facility in late October. The company states that such audits are "typically part of the final stage of the FDA's review process."

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Simon Hubbert, chief executive officer of Lombard commented: "We welcome the feedback from the FDA and remain confident of the near term approval of Aorfix in the important US market. The FDA has not raised substantive issues with our application, nor has it required the Company to submit additional new clinical data. We intend to submit the requested analyses within two weeks and look forward to the FDA visiting our UK facility for the GMP audit later this month."

The company has sufficient funds to last into the second quarter of 2013.

Analyst comments

Julie Simmonds, Analyst at Canaccord Genuity writes that 2012 approval is still possible, although likely late in the fourth quarter or early in the first quarter of 2013. "The timing of the final FDA decision is particularly critical to Lombard as it triggers a second tranche of funding (£13.6m) from existing investors if it occurs prior to the year end. After this date the funding falls away, but discusssons with investors lead us to believe that they would remain supportive."

She maintains her "Buy" rating and 332p price target.

CM