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Lombard looking to scale up Scottish operation

LOMBARD Medical Technologies may scale up operations at its manufacturing plant in Scotland after receiving approval from the US Food and Drug Administration (FDA) to launch a new product.

Aorfix – a flexible stent for use in vascular surgery – is not expected to be available in the US until the second half of this year.

Lombard Medical, which is based in Oxfordshire, said it will be business as usual at its Prestwick site until then but the new product could lead to a need to increase capacity.

The company took a £200,000 Regional Selective Assistance grant in 2010 with plans to increase job numbers in Ayrshire from seven to more than 40.

The following year it raised £27.5 million to help get Aorfix through US approval and allow it to begin a sales and marketing push in Europe.

The FDA's decision to give the green light to Aorfix means Lombard can draw the second tranche from that money which is around £14.1m.

As well as the set up and launch costs in the US that funding will be used to expand production capacity, extend stent graft sizes and develop a next generation delivery device for the stents.

Some is going to redeem £3m of convertible loan notes issued to Invesco Asset Management.

The FDA approval has also triggered a further £1.7m of loan funding which Lombard Medical can access from Japanese distribution partner Medico Hirata.

The firm indicated it will be seeking additional funding to finance its long-term plans in the US.

Simon Hubbert, Lombard Medical chief executive, said: "FDA approval of Aorfix is a major mile- stone and sets the stage for the next chapter in the company's growth.

"We look forward to launching Aorfix in the US through our own salesforce and are confident of securing a meaningful share of this growing market."

Aorfix approval in Japan is expected in 2014.

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