GYG Gyg Plc

RNS No 9380w
GYRUS GROUP PLC
6 September 1999


("Gyrus" or the "Company")

NEW PRODUCT LAUNCH TO FOCUS ON
TREATMENT OF KNEE CARTILAGE

* Gyrus, the "PlasmaKinetic" endosurgical device company, announces FDA 510(k)
approval and US launch of the first of a range of small diameter (2.3mm)
instruments for use with the VAPR arthroscopy system sold by Ethicon, a
division of Johnson & Johnson.  Arthroscopy involves the treatment of injuries
to joints of the body using minimal access techniques.

* This launch marks an important initiative targeted at increasing use of the
VAPR system in knee procedures.  Knee procedures account for some 70% of the
$400-450M arthroscopic market and are often performed in areas of the joint
which are difficult to access.  The new instruments are designed to improve
access and visualisation during these procedures.  As such, they should
significantly increase the revenue from over 2,500 VAPR Systems installed in
the market.

*  The market for VAPR continues to show strong growth as patients demand less
traumatic surgery and faster recovery.   With the increasing activity of the
population as a whole it is now not just young athletes demanding more
effective treatments for joint injuries.  This demand will continue to fuel
growth well into the next millennium.    

*  The first PlasmaKinetic system, the VAPR arthroscopy system, was launched
by Gyrus and Ethicon, in the second quarter of 1997, since when Gyrus has sold
more than 250,000 electrodes. 

Dr Mark Goble, Managing Director, commented:

"We continue to see initial interest translating into orders across all three
core markets in which we have introduced our PlasmaKinetic surgery systems. 
The combined value of these markets is currently estimated at $800-900M. 
Arthroscopy represents about half this total and this launch spearheads our
focus on the largest sector of this market."

PRESS RELEASE

510(k) approval has been granted by the FDA for the first of a new range of
small 2.3mm diameter instruments developed by Gyrus to extend the capability
of their innovative PlasmaKinetic VAPR arthroscopy system.  The range is being
launched in the USA, the largest segment of a worldwide market currently
valued between $400 and $450 million per annum.

The launch is being undertaken by the Ethicon division of Johnson & Johnson
which has exclusive marketing rights and has already installed 2,500 VAPR
arthroscopy systems.

Arthroscopy, the treatment of injuries to joints of the body using minimal
access techniques, is a fast growing market niche in the U.S.A. with knee
procedures accounting for around 70% of operations.  

The introduction of small diameter instruments will improve the surgeon's
access and visualisation and make it possible to use the Gyrus PlasmaKinetic
technology to treat damaged cartilage in wrist, elbow and ankle joints as well
as knees.

With an ageing population keeping fit and increasingly mobile, it is not just
young athletes demanding more effective and less traumatic surgical solutions
when injuries occur.  These patient-led demands can be met using new
approaches such as the radio frequency controlled PlasmaKinetic technique.

Around two-thirds of current knee joint procedures involve removal or
treatment of damaged areas of cartilage.  The VAPR system is now ideally
suited to this procedure by providing unrivalled access during tissue
treatment.  With 95% of all arthroscopy procedures in the USA currently
performed on an outpatient basis, a trend which Europe is following, the
clinical and economic benefits are significant. 

"We continue to see initial interest translating into orders across all three
core markets in which we have introduced our PlasmaKinetic surgery systems"
said Managing Director Dr Mark Goble today.  "The combined value of these
markets is currently estimated at around $800 to $900 million.  Arthroscopy
represents around half of this total, and this launch spearheads our focus on
the largest sector of this market."

Gyrus is now developing other forms of small diameter electrodes which will
further extend the potential for their core PlasmaKinetic technology. In the
arthroscopy market these include incremental changes to address the different
surgical techniques needed to treat injuries to specific parts of the
cartilage.   

The company has been at the leading edge of an evolution in the surgical
treatment of diseases using minimal access techniques for five years
introducing their PlasmaKinetic technology in three core areas. This first
technology platform operates under fluid distension of the surgical site. 

Gyrus is now developing a second technology platform which will operate in air
or gas filled operative sites, considerably extending the range of surgical
specialities which can be addressed. Pre-clinical trials with this second
generation PlasmaKinetic technology have started and U.S. alliances are now
being sought for selected market opportunities heralding an exciting new
development phase.

Gyrus Group PLC have their UK Headquarters in Cardiff and the Sales &
Marketing Division in Bourne End.  Further information on the company is
available on request from Jean Garon PR by calling (01628) 483040  Fax:
(01628) 486796. You can also visit the Gyrus web site at: www.gyrus.co.uk

BACKGROUND NOTES

PlasmaKinetic surgery is the name given to the application of this innovative
radio-frequency energy delivery technology which surgeons can uniquely control
to remove and modify body tissues using minimal access techniques.

In the first half of the last 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). Results for the full year
to 30th June 1999 will be released on 23rd September.  Earlier this year 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.  Grant support of #500,000 to develop an adjacent site - which will
increase production capacity significantly from the second quarter of 2000 -
has been approved and the company is now moving into its next rapid scale up
phase.

FOR FURTHER INFORMATION

Gyrus Group PLC                            Tel: (01222) 300100
Dr Mark Goble, Managing Director           Fax: (01222) 300118
John Bradshaw, Finance Director            E-Mail: johnbradshaw@gyrus.co.uk
(Analyst, Broker, Financial 
Enquiries)       

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


END

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