GYG Gyg Plc

RNS Number:3087E
Gyrus Group PLC
25 January 2000


GYRUS GROUP PLC
("Gyrus" or the "Company")

GYRUS LAUNCHES FIRST PRODUCT DEVELOPED UNDER THE $6 MILLION GROWTH INVESTMENT
FROM JOHNSON & JOHNSON

**        Gyrus, the PlasmaKinetic technology company, announces launch of the
first product developed under the $6 million deal with Ethicon, a division of
Johnson & Johnson (J&J), to fast track innovative additions to the VAPR
arthroscopy system.

**       The product enhances the performance of the small diameter VAPR
instruments used in knee procedures by extracting the by-products of tissue
vaporisation and further improving visualisation.  This is particularly
advantageous when, as is often the case, areas of cartilage in confined areas
of the knee joint require treatment.  

**       Arthroscopy involves the treatment of injuries to joints of the body
using minimal access techniques.  The potential market for VAPR is estimated
at $400-450 million and continues to show strong growth as patients demand
less traumatic surgery and faster recovery.  With the increasing activity of
the population as a whole, this demand should continue to fuel double-digit
growth. 

**       The first PlasmaKinetic system, the VAPR arthroscopy system, was
launched by Gyrus and Ethicon, in the second quarter of 1997, since when close
to 3,000 systems have been installed world-wide. 


Mark Goble, Managing Director, commented:

"This is an important product introduction which, by improving visualisation
when treating cartilage in the confined areas of the knee joint, should
increase penetration of the largest sector of the market accounting for 70% of
all arthroscopic procedures."

GYRUS LAUNCHES FIRST PRODUCT DEVELOPED UNDER THE $6 MILLION GROWTH INVESTMENT
FROM J&J

In September 1999, Gyrus announced that the Ethicon division of healthcare
giant Johnson and Johnson (J&J) was to invest $6 million to fast track
development of a market-led range of new arthroscopic products for use with
the VAPR system.  The first of these products is launched today, one of a
number of new developments delivered on time and within budget.

This clip-on disposable enhances the performance of the current small diameter
VAPR instruments used in knee procedures by extracting the by-products of
tissue vaporisation and further improving visualisation.  This is particularly
advantageous when, as is often the case, area of cartilage in confined areas
of the knee joint require treatment.

Arthroscopy involves the treatment of injuries to joints of the body using
minimal access techniques.  The potential market for VAPR is estimated at
$400-450 million and continues to show strong growth as patients demand less
traumatic surgery and faster recovery.  With the increasing activity of the
population as a whole, this demand should continue to fuel double-digit
growth.  

Targeting high growth opportunities within the arthroscopic market, further
developments funded under the J&J investment are scheduled for launch over the
next 15 months.  One of the most significant is currently in pre-clinical
evaluation in the US. 

The first PlasmaKinetic system, the VAPR arthroscopy system, was launched by
Gyrus and Ethicon, in the second quarter of 1997, since when close to 3,000
systems have been installed world-wide.  These developments should increase
future revenues derived from this installed base as well as continuing to
drive conversion from older techniques.

"This is an important product introduction which, by improving visualisation
when treating cartilage in the confined areas of the knee joint, should
increase penetration of the largest sector of the market accounting for 70% of
all arthroscopic procedures" said Dr Mark Goble, Managing Director of Gyrus,
today. 

BACKGROUND NOTES 

Gyrus has been at the leading edge of an evolution in the surgical treatment
of diseases using minimal access techniques for the last five years. 
PlasmaKinetic surgery - the name given to the application of their new
radio-frequency energy delivery technology - can be uniquely controlled to
remove and modify body tissues using minimal access techniques.  PlasmaKinetic
surgery has been rapidly adopted over the two and a half years since it was
first introduced, having been used to perform over 300,000 procedures
world-wide.  

The first PlasmaKinetic system, the VAPR arthroscopy system, was launched by
Gyrus and Ethicon, a Johnson & Johnson company, in the second quarter of 1997
since when more than 2,500 systems have been installed.  Two new instrument
forms were introduced during 1998 and a small diameter form for treating knee
cartilage in H2 1999.  In September 1999, Gyrus announced a $6M investment by
J&J to accelerate the development of the VAPR system.  First products
developed under this investment were  launched in Q1 2000. 

The second PlasmaKinetic system, the VersaPoint hysteroscopic system, was
launched shortly afterwards by Gynecare Inc.  Gynecare was subsequently
acquired by Ethicon who now promote the system through their Womens Healthcare
division.  Gyrus has subsequently announced launch of additions to the range
to help accelerate the conversion from open surgery to the minimally invasive
hysteroscopic treatment for excessive menstrual bleeding.   Further
developments of the VersaPoint system are anticipated during the second half
of the year. 

The third PlasmaKinetic system, the Gyrus Endourology System for the treatment
of enlarged prostate glands was launched in the second quarter of 1998.  Gyrus
sells the system under its own name in Europe.  Results obtained from over 500
cases fully endorse the clinical and economic benefits of the system. 
Surgeons have nonetheless been cautious about committing without substantial
clinical data.  From the positive reaction to outcomes data presented at
recent surgical meetings, we fully anticipate a steady increase in sales
volumes during the second half of the year.  In June 1999 FDA 510(k) approval
was received and negotiations with two potential US partners are now at an
advanced stage following evaluations performed at five key centres in the US.

In the last financial year to 30th June 1999, Gyrus was able to report a 65%
leap in turnover (#9.4 million from #5.7 million), along with a sharp drop in
pre-tax losses (#2.5 million from #4 million). 

Gyrus employs 190 people at its headquarters and manufacturing plant near
Cardiff, Wales. The plant includes a 3,000sq. ft. Class 10,000 Clean Room
where the single use disposables for use with PlasmaKinetic systems are
produced.  Plans to develop an adjacent site - which will increase production
capacity significantly from January 2000 - have been approved and the company
is now moving into its next rapid scale up phase.

Gyrus Group PLC has its UK headquarters at Gyrus Group PLC., Fortran Road, St
Mellons, Cardiff, Wales CF3 0LT.  Tel: (01222) 300100, fax: (01222) 300101. 
You can also visit the company on the web at: www.gyrus.co.uk

ENQUIRIES

Gyrus Group PLC                       
Dr Mark Goble, Managing Director,          Tel: (01222) 300100
or John Bradshaw, Finance Director         Fax: (01222) 300101       
(Analyst, Broker, Shareholder Enquiries)   E-Mail: john.Bradshaw@gyrus.co.uk

Jean Garon PR                              Tel: (01628) 483040
(Press Enquiries)                          Fax: (01628) 486796
                                           E-Mail: jean@garonpr.demon.co.uk

END





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