GYG Gyg Plc

RNS No 0152p
GYRUS GROUP PLC
7 July 1999


GYRUS GROUP PLC
("Gyrus" or the "Company")
ANNOUNCES FDA 510(k) APPROVAL OF ENDOUROLOGY SYSTEM

*  Gyrus, the "PlasmaKinetic" endosurgical device company, announces that it
has been granted 510(k) approval by the United States Federal Food and Drug
Administration (FDA) to commence sales of it's Endourology System in the US.

*  The Endourology System is used to remove the enlarged portion of the
prostate gland which obstructs the normal flow of urine.  It is a condition
which affects between10-20% of men over 60 years of age.

*  Gyrus can now accelerate discussions with the potential partners already
identified as candidates to market the system in the US.

*  In Europe, Gyrus has been building its own sales and marketing network. 
Supported by results from 250 evaluations showing that both blood loss and
recovery time can be halved compared to conventional techniques, interest
amongst surgeons has begun gathering momentum.  This support was clearly seen
in feedback at the recent British Association of Urological Surgeons meeting
in Glasgow, during which a further fifty surgeons asked to evaluate the
Endourology System.


Mark Goble, Managing Director, commented:

"With the support of results from over 250 prostatectomy cases using our
system we are seeing a growing acceptance of the benefits of our technology
which mirror those we have already seen in the arthroscopic and hysteroscopic
markets.  The FDA 510(k) approval gives us a great start to the new financial
year, an opportunity to commence US sales of our Endourology System and build
on the value of the clinical experience we have gained over the last year."

The Gyrus Endourology System is the third system to be marketed using the
company's PlasmaKinetic technology. The Endourology System is used to remove
the enlarged portion of the prostate gland which obstructs the normal flow of
urine.  It is a condition which affects between 10-20% of men over 60 years of
age.

The FDA 510(k) approval will enable the company to move to the next stage of
discussions with potential US partners.  Preliminary discussions were held
with a number of companies during the American Urological Association meeting
earlier this year.  Gyrus expects that in order to close a deal, some
additional evaluations will need to be performed over the next couple of
months by leading US urologists selected by each of the potential partners.   

The company estimates that the world-wide market for surgical treatment of
enlarged prostate glands should grow significantly over the next few years. 
Currently estimated at between $150-300 million p.a., future growth will be
driven by: an ageing population; the introduction of an improved surgical
treatment competitively positioned against the life-long cost of
pharmaceutical management; and, patients coming to surgery when their
condition can no longer be controlled by pharmaceutical management.

Gyrus is undertaking the challenging task of developing its own market
presence in this sector and has appointed a direct sales force in the UK with
country managers running distribution in Spain, France and Italy.  Gyrus has
conducted extensive evaluations by centres of excellence to convince surgeons
as to the benefits of the PlasmaKinetic approach.  Results from over 250
evaluations of the system are now consistently showing a reduction in blood
loss both during and after surgery, with better than a 50% reduction in
hospital stay.  Armed with this data, interest amongst surgeons has begun
gathering momentum.  This interest was clearly seen at the recent British
Association of Urological Surgeons meeting in Glasgow, during which a further
fifty surgeons asked to evaluate the Endourology System.

Indeed, the results so impressed Gyrus's Chairman, Brian Steer, that he
elected to have his prostate treated using the system. 

Commenting on his experience, Brian Steer said, "Faced with the prospect of
surgery and being aware of the results from our trials, I discussed the use of
the Gyrus system with my surgeon who had already used the product
successfully.  He agreed.  In less than 48 hours after surgery I was out of
hospital, 2 days ahead of when my surgeon would have expected using
conventional techniques."

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 2 years since it was first
introduced, having been used to perform over 200,000 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 Gyrus has sold more than 250,000 electrodes.  Two new electrode
forms were introduced during 1998 and a small diameter form is due to be
launched shortly, with the aim of maximising revenue from an installed
generator base now exceeding 2,500 units in the US and Europe. 

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 announced launch of an additional hysteroscopic electrode
form earlier this year to help accelerate the conversion from conventional
open hysterectomy to the minimally invasive hysteroscopic treatment for
excessive menstrual bleeding. 

In the first half of the current financial year,  Gyrus was able to report a
135% leap in product sales (#4 million from #1.7 million),  along with a sharp
drop in pre-tax losses (#0.9 million from #1.9 million).   Last week, the
company announced settlement of its patent litigation with Arthrocare Inc.

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

Analysts, Brokers, Financial Institutions, etc
GYRUS GROUP PLC                                   Tel: (01222) 300100
Dr Mark Goble, Managing Director                  Fax: (01222) 300101

Press Enquiries
JEAN GARON PR                                     Tel: (01628) 483040
Jean Garon                                        Fax: (01628) 486796


END

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