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New products help Lumenis swing to profit

18 May 2015

Medical laser firm reports solid uptick in sales despite negative currency effects.

Lumenis, the Israeli medical laser specialist, has posted higher sales and swung to a net income in its latest financial quarter – thanks in large part to demand for its newer range of products.

CEO Tzipi Ozer-Armon reported sales of $68.5 million. And although that figure represented only a 4 per cent increase on the same period in 2014, the strong US dollar and weak Japanese yen masked a more significant uptick of around 11 per cent in like-for-like sales.

That improvement was more evident on the bottom line, where Lumenis swung to a net income of $1.6 million. This time last year, the Nasdaq-listed firm reported a net loss of $3.1 million after incurring the high costs of listing on the exchange via an IPO.

Ozer-Armon told investors: “I am especially proud that 21 per cent of our product revenues were generated from new products with advanced and innovative technologies.”

Lumenis’ sales figures showed strongest growth in the Asia-Pacific region. “We saw particular strength in countries in which we employ a direct selling model, countries like China, Australia, and India,” the CEO added.

Once again it was aesthetic laser applications – the company’s most lucrative segment – that grew at the fastest rate. More specifically, it is skin rejuvenation and hair removal procedures that are driving that growth, with the company hopeful that a new application in reducing the appearance of stretch marks will become a future revenue stream.

Holmium laser progress
In the surgical area, Lumenis is busy promoting its new “Pulse 120H” holmium laser for applications in urology.

This week it is in attendance at the American Urological Association’s 2015 annual meeting in New Orleans, alongside advocates highlighting the powerful 2.1 µm laser’s ability to treat prostate problems, as well as renal and ureteral stones.

Ozer-Armon said: “The Pulse 120H is the most powerful and versatile holmium laser surgical solution in the urology market, and we are progressing in our plans to get the system in the hands of the leading surgeons in the US, Europe, and around the world.”

She described a recent study in which five surgeons performed 32 procedures in combination with Lumenis’ own “Xpeeda” fiber accessory, used to vaporize the prostate. “This is an important milestone for the technology in a market with an estimated 50,000 annual procedures in the US alone,” the CEO said in a call with investors.

“We believe that the Pulse 120H, with its fiber, represents a breakthrough technology that is a game changer in the urology market,” Ozer-Armon added. “As such, it will be a significant driver of our future growth. Importantly, the Pulse 120H represents a great example of Lumenis’ commitment to better technology driving better patient care.”

Weak yen impacts ophthalmology
However, for ophthalmology applications Lumenis reported a drop in sales and the company is currently attempting to lower its manufacturing costs to become more competitive.

In this area, the company’s rivals in Japan are benefitting from the sharp drop in the value of the yen over the past two years. Lumenis’ researchers are also working on a new retinal treatment for which US Food & Drug Administration (FDA) approval is anticipated in the second half of this year.

Despite the ongoing currency effects, the Lumenis executive team remains confident of hitting its annual revenue goal of between $305 million and $310 million for 2015, with more rapid sales growth expected in the second half of the year.

Lumenis corporate video: the Pulse 120H holmium laser:

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