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Mainstay Medical publie son Rapport Annuel 2015

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DUBLIN–(BUSINESS WIRE)–Regulatory News: Mainstay Medical International plc (« Mainstay » ou la « Société » cotée sur Euronext Paris: MSTY.PA et l’ESM de la Bourse irlandaise: MSTY.IE) annonce aujourd’hui la publication de son Rapport Annuel 2015. Le Rapport Annuel est joint au présent communiqué, il est également disponible en ligne dans la section « Investisseurs » du

DUBLIN–(BUSINESS WIRE)–Regulatory News:

Mainstay Medical International plc (« Mainstay » ou la « Société » cotée
sur Euronext Paris: MSTY.PA et l’ESM de la Bourse irlandaise: MSTY.IE)
annonce aujourd’hui la publication de son Rapport Annuel 2015.

Le Rapport Annuel est joint au présent communiqué, il est également
disponible en ligne dans la section « Investisseurs » du site internet
de Mainstay Medical : http://www.mainstay-medical.com/fr/investors/annual_reports

– Fin –

À propos de Mainstay

Mainstay est une société de dispositifs médicaux axée sur la mise sur le
marché d’un système implantable innovant de neurostimulation, ReActiv8®,
pour les personnes souffrant de lombalgie chronique invalidante. La
Société est basée à Dublin, en Irlande. Elle dispose d’activités basées
aux États-Unis et en Australie, et est cotée sur Euronext Paris
(MSTY.PA) et sur l’ESM de l’Irish Stock Exchange (MSTY.IE).

A propos de la lombalgie chronique

Une des causes reconnues de la lombalgie chronique est un
affaiblissement du contrôle par le système nerveux central des muscles
qui stabilisent en permanence la colonne vertébrale dans le bas du dos,
puisqu’une colonne vertébrale instable peut provoquer des maux de dos.
ReActiv8 est conçu pour stimuler électriquement les nerfs responsables
de la contraction de ces muscles et ainsi de contribuer à restaurer le
contrôle musculaire et d’améliorer la stabilité de la colonne
vertébrale, ce qui permet au corps de récupérer de la lombalgie
chronique.

Les personnes atteintes de lombalgie chronique ont généralement une
qualité de vie réduite et ressentent une douleur très importante,
peuvent être handicapées, souffrir de dépression, d’anxiété et de
troubles du sommeil. Leur douleur et leur handicap peuvent persister
malgré les meilleurs traitements médicaux disponibles, et seulement un
faible pourcentage de cas résulte d’un état pathologique identifié, ou
d’un défaut anatomique qui peut être corrigé par la chirurgie
rachidienne. Leur capacité à travailler ou à être productifs est
sérieusement affectée par la lombalgie chronique, et les journées de
travail perdues, les prestations d’invalidité et le recours aux
prestations de santé pèsent de façon significative sur les individus,
les familles, les communautés, l’industrie et sur les gouvernements.

Des informations complémentaires sont disponibles sur le site www.mainstay-medical.com

ReActiv8 est un dispositif d’essai et n’est pas approuvé pour la
commercialisation dans le monde.

ATTENTION – aux États-Unis, ReActiv8 est limitée par la loi fédérale
uniquement à l’usage d’essai.

Mainstay Medical International plc and its subsidiaries
Annual Report

for the year ended 31 December 2015

Mainstay Medical International plc

Table of contents

Corporate and shareholder information 3

Chairman’s statement 4

Biographies of Directors 5

Directors’ Report 7

Principal risks and uncertainties 16

Corporate Governance Report 34

Directors’ Responsibilities Statement 38

Independent Auditor’s Report 39

Consolidated statement of profit or loss and other comprehensive income
41

Consolidated statement of financial position 42

Consolidated statement of changes in shareholders’ equity 43

Consolidated statement of cash flows 44

Notes to the consolidated Financial Statements 45

Parent Company Financial Statements 68

Forward looking statements

This Annual Report includes statements that are, or may be deemed to be,
forward looking statements. These forward looking statements can be
identified by the use of forward looking terminology, including the
terms “anticipates”, “believes”, “estimates”, “expects”, “intends”,
“may”, “plans”, “projects”, “should”, “will” or “explore” or, in each
case, their negative or other variations or comparable terminology, or
by discussions of strategy, plans, objectives, goals, future events or
intentions. These forward looking statements include all matters that
are not historical facts. They appear throughout this Annual Report and
include, but are not limited to, statements regarding the Company’s
intentions, beliefs or current expectations concerning, among other
things, the Company’s results of operations, financial position,
prospects, financing strategies, expectations for product design and
development, regulatory applications and approvals, reimbursement
arrangements, costs of sales and market penetration.

By their nature, forward looking statements involve risk and uncertainty
because they relate to future events and circumstances. Forward looking
statements are not guarantees of future performance and the actual
results of the Company’s operations, and the development of its main
product, the markets and the industry in which the Company operates, may
differ materially from those described in, or suggested by, the forward
looking statements contained in this Annual Report. In addition, even if
the Company’s results of operations, financial position and growth, and
the development of its main product and the markets and the industry in
which the Company operates, are consistent with the forward looking
statements contained in this Annual Report, those results or
developments may not be indicative of results or developments in
subsequent periods. A number of factors could cause results and
developments of the Company to differ materially from those expressed or
implied by the forward looking statements including, without limitation,
the Company’s ability to obtain CE Marking for ReActiv8, the initiation
and success of the ReActiv8-B Clinical Trial, the successful launch and
commercialization of ReActiv8, general economic and business conditions,
the global medical device market conditions, industry trends,
competition, changes in law or regulation, changes in taxation regimes,
the availability and cost of capital, the time required to commence and
complete clinical trials, the time and process required to obtain
regulatory approvals, currency fluctuations, changes in its business
strategy, political and economic uncertainty. The forward-looking
statements herein speak only at the date of this Annual Report.

Mainstay Medical International plc

Corporate and shareholder information

Directors     Oern Stuge MD, Independent Non-Executive Chairman
Peter Crosby, Chief Executive Officer and Executive Director
David Brabazon, Independent Non-Executive Director
Antoine Papiernik, Non-Executive Director
James Reinstein, Independent Non-Executive Director
Manus Rogan PhD, Non-Executive Director
Dan Sachs MD, Non-Executive Director
 
Secretary Tom Maher
 
Registered office Clonmel House
Forster Way
Swords, K67F2K3
County Dublin, Ireland
 
Registered number 539688
 
Website www.mainstay-medical.com
 
ISIN / Symbol IE00BJYS1G50 / MSTY.PA (Paris) and MSTY.IE
 
Solicitors/ Lawyers McCann FitzGerald
Riverside One
Sir John Rogerson’s Quay
Dublin 2, Ireland
 
Jones Day
2, rue Saint-Florentin
75001 Paris, France
 
Independent Auditor KPMG
Chartered Accountants
1 Stokes Place
St Stephen’s Green
Dublin 2, Ireland
 
Principal Bankers HSBC
Bank of Ireland
 
ESM Adviser and Broker J&E Davy
Davy House
49 Dawson Street
Dublin 2, Ireland
 
Registrar Computershare Investor Services (Ireland) Limited
Heron House
Corrig Road
Sandyford Industrial Estate
Dublin 18, Ireland
 
Paying Agent (in France) Caceis Corporate Trust
1/3, Place Valhubert
75013 Paris
France
 

Mainstay Medical International plc

Chairman’s Statement

Dear Shareholder

2015 was a year of continued progress on the path to commercialization
of ReActiv8®, and I am pleased to present the Annual Report
for Mainstay Medical International plc and its subsidiaries.

Business review

On 2 November 2015 we announced that we had submitted an application for
CE Marking to our Notified Body. We have since had several interactions
with the Notified Body and we are awaiting CE Marking approval. Our
application was based on positive results from our ReActiv8-A trial
which were announced on 31 August 2015, and on 4 December 2015 we
announced additional data confirming the positive results from this
clinical trial.

In May 2015 we also announced we had received approval from the US Food
and Drug Administration to begin the ReActiv8-B Clinical Trial under an
Investigational Device Exemption. We have since worked with the FDA to
refine the protocol, and we are progressing clinical trial site
selection and initiation, physician training, and submissions to Ethics
Committees (Institutional Review Boards in the US).

A detailed review of our 2015 activities can be found in the Directors’
Report on page 7 of this Annual Report.

Finance

Cash on hand as at 31 December 2015 was $16.6 million. Operating
expenses were $12.9 million during the year ended 31 December 2015
(2014: $11.1 million before exceptional items) and relate to clinical
trial activities, research and development, and commercial, general and
administrative expenses.

Outlook

While we await CE Marking approval for ReActiv8, we are preparing for
commercialization in Europe. We are also preparing for the ReActiv8-B
Clinical Trial and, subject to the availability of sufficient financial
resources, we look forward to ramping up enrollment in the Trial.

Directors and Staff

I would like to thank all my fellow Directors, staff, consultants and
study investigators for their support and dedication, which has enabled
the continued success of the Company. I look forward to the future with
confidence.

Yours faithfully,

Oern Stuge MD

Chairman

27 April 2016

Mainstay Medical International plc

Board of Directors

Biographies of Directors

Oern Stuge MD

Dr. Oern R. Stuge is the independent non-executive Chairman of the
Board. He is an international executive with more than 25 years of
experience in the life science sector. Dr. Stuge is the owner of Orsco
Lifesciences AG, through which he holds several executive and
non-executive board memberships and advisory roles.

Prior to founding Orsco, Oern Stuge worked for 12 years for Medtronic,
Inc. in different roles including Senior Vice President (“SVP”) &
President Europe & Central Asia, and SVP & President Cardiac Surgery. He
was a member of the Medtronic Executive Committee & Operating Committee.
Dr. Stuge has been credited for successfully transforming Medtronic’s
global Cardiac Surgery business and accelerating the growth in its
neurological and cardiovascular business in Europe, Middle East & Africa.

Dr. Stuge earned an MD from University of Oslo, and an MBA from IMD,
Switzerland.

Peter Crosby

Mr. Peter Crosby has been a Board member of the ultimate holding company
of the Group since he was appointed CEO of Mainstay Medical in mid-2009.
Mr. Crosby was instrumental in founding the Group, raising the 2010 and
2012 financing rounds, and completing the 2014 IPO. He is an
internationally experienced medical device executive who has been chief
executive officer or chairman of seven medical device companies (public
and private) in four countries.

Mr. Crosby has contributed to the development and introduction to the
global market of dozens of medical devices over a career spanning more
than 30 years. After working for five years in a hospital environment,
Mr. Crosby entered industry as one of the first three employees of
Cochlear, and continued his career with executive roles in many more
companies. He has direct experience in active implantable medical
devices, including cardiac pacemakers and defibrillators (Telectronics
Pacing Systems), cochlear implants (Cochlear), left ventricular assist
devices (Ventracor), Neuromodulation (Mainstay Medical), ultrasound
(Ausonics, NeoVision), software (Cardicomm Solutions), and in-vitro
diagnostics (First Medical, Ischemia Technologies). Mr. Crosby has
raised capital for many medical device companies, and has been directly
involved in the sale of several companies.

Mr. Crosby graduated with a Bachelor of Electrical Engineering and a
Masters in Engineering Science (Biomedical Engineering) from the
University of Melbourne, Australia. He is a named inventor on over 25
patents and patent applications, primarily in the field of biomedical
engineering.

David Brabazon

Mr. David Brabazon is a co-founder of Adapt Pharma Limited and serves as
Chief Financial Officer and a board member. Adapt Pharma Limited is a US
focused speciality pharmaceuticals business with its corporate
headquarters in Ireland. Mr. Brabazon previously was a co-founder and
Chief Financial Officer of Azur Pharma plc, which merged with Jazz
Pharmaceuticals plc in early 2012. Mr. Brabazon continued to serve in
the merged business as Senior Vice President of Finance and Company
Secretary until late 2012. Prior to Azur Pharma, Mr. Brabazon served as
Vice President of Finance and Group Financial Controller of Elan
Corporation plc.

Mr. Brabazon is a chartered accountant and holds a Masters of Accounting
degree from University College Dublin, Ireland and a Master of Business
Administration degree from INSEAD, France. David serves as a director of
Headway (Ireland) Limited which provides support and services to people
affected by brain injury.

Antoine Papiernik

Mr. Antoine Papiernik is a Non-Executive Director of the Company and is
a Managing Partner at Sofinnova Partners, which he joined in 1997.
Sofinnova has been an initial investor and Antoine has been an active
board member in public companies like Actelion, Auris, ProQR, Novus
Pharma (then sold to CTI), Movetis (then sold to Shire), Mainstay
Medical, Pixium Vision and Stentys which went public respectively on the
Zürich stock exchange, the NASDAQ, the Milan Nuovo Mercato, the Belgium
Stock Exchange, the Irish Stock Exchange and EuroNext Paris, in Cotherix
(initially NASDAQ listed, then sold to Actelion), CoreValve (sold to
Medtronic), Fovea (sold to Sanofi Aventis) and Ethical Oncology Science
(EOS sold to Clovis Oncology). He has also invested, for Sofinnova, in
and is a board member of private companies ReCor, MD Start, Shockwave
Medical, and Reflexion Medical. Antoine has an MBA from the Wharton
School of Business, University of Pennsylvania. In 2012 and 2011 Antoine
was selected by Forbes for its “Midas List” of the world’s top venture
capital investors. Antoine is one of the only Europeans on the list, and
one of the few life science investors.

James Reinstein

James A. Reinstein has more than 25 years of medical device experience.
James is currently the President and CEO of Drawbridge Health, a medical
technology company which fuses the science of chemistry with the
fundamentals of logistics to access and immediately stabilize the blood
sampling process. Previous to Drawbridge, he was the President and CEO
of Aptus Endosystems Inc. where he led the sale of the company to
Medtronic for over $100 million. Prior to joining Aptus, James served as
Executive Vice-President and Chief Commercial Officer at Cyberonics, a
neuromodulation company focused on helping patients with epilepsy,
depression and chronic heart failure. James spent 17 years at Boston
Scientific in various roles and functions including business
development, marketing and general management. Most of his career at
Boston Scientific was spent working and living in Europe, Asia and Latin
America.

James was employed by Procter and Gamble after graduating with a BA in
Marketing from the Terry College of Business at the University of
Georgia in Athens. He also completed post graduate studies in management
at INSEAD Business School in Fontainebleau, France. James is also a
General Partner at Palo Alto Medtech Advisors, and also sits on the
board of directors of a publicly traded company, Pixium-Vision based in
Paris, France and Monteris Medical, a privately held company located in
the United States.

Manus Rogan PhD

Dr. Manus Rogan is Managing Partner and co-founder of Fountain
Healthcare Partners. He has over 26 years of investment and operating
experience in the life science sector in both the US and Europe. Dr.
Rogan earned a PhD in chemistry from the University of York (sponsored
by GlaxoSmithKline) and an MBA from Trinity College Dublin.

Dr. Rogan began his career in product development at GlaxoSmithKline in
the UK and in 1996 joined Elan Corporation’s business development group.
For four years he was responsible for licensing products and drug
delivery technologies in Europe and Japan. In 2001, Dr. Rogan joined
Elan’s Corporate Venture Capital group in New York where he invested in
private and public biotechnology companies. Investments included Sirna
(acquired by Merck, 2006) and Beyond Genomics (IPO, 2011). In his seven
years at Elan, Manus concluded over 25 investment and technology
licensing transactions involving companies in the US, Europe and Japan.
Manus currently serves on the board of Opsona Therapeutics and Mainstay
Medical. He recently stepped down as Chairman of the Irish Venture
Capital Association (“IVCA”) and previously represented Fountain
Healthcare Partners on the board of Amarin Corporation.

Dan Sachs MD

Dr. Dan Sachs is a physician entrepreneur and founder of KSpine Inc.,
Respicardia, Inc., Mainstay Medical Inc., and Amphora Medical, Inc., all
venture-backed medical device companies. He was previously a venture
capital investor with Investor Growth Capital and Spray Venture
Partners, and served as Instructor in Medicine on the faculty of Harvard
Medical School in the Division of Emergency Medicine.

Dr. Sachs earned an MD from the University of Michigan, and MBA from
Harvard Business School.

Mainstay Medical International plc

Directors’ Report

The Board of Directors are pleased to report on the progress of Mainstay
Medical International plc (“Mainstay” or the “Company”) and present the
annual report of the Company and its subsidiaries (the “Group” or “we”)
for the year ended 31 December 2015.

Principal activities

Mainstay is a medical device company focused on bringing to market
ReActiv8®, a new implantable neurostimulation system to treat
disabling Chronic Low Back Pain (“CLBP”).

The Company is incorporated in Ireland as a public limited company. The
Company’s ordinary shares are listed on the ESM of the Irish Stock
Exchange and Euronext Paris.

As at 31 December 2015, the Company together with its operating
subsidiaries Mainstay Medical Limited, MML US, Inc. and Mainstay Medical
(Australia) Pty. Limited form the Mainstay Medical Group.

Key performance indicators

Current key performance indicators, used by management to measure
performance and exercise control over operations are summarized below:

Securing funds – The Group has financed its operations to date
principally through the issuance of equity securities and debt funding.
The management team continues to develop and strengthen relationships to
explore further financing options. These may include strategic
partnering, private placement or public offering of equities or debt.

Effective monitoring of use of funds – Management prepares
budgets and rolling forecasts to track and monitor use of funds. Actual
expenditure is measured against budget, and is reported to and evaluated
by the Directors on a monthly basis.

Achieving milestones – The Group has defined the strategic
activities and milestones leading to commercialization of ReActiv8.
These include:

  • Product design and development of ReActiv8
  • Conducting the ReActiv8-A Clinical Trial
  • Quality System certification
  • Obtaining CE Marking
  • European commercialization of ReActiv8
  • Obtaining approval for an Investigational Device Exemption (an “IDE”)
    from the US Food and Drug Administration (the “FDA”) to start a
    clinical trial of ReActiv8 in the US
  • Conducting a clinical trial of ReActiv8 under the IDE to generate data
    to file a Pre-Market Approval Application (a “PMAA”) with the FDA
  • Following Pre-Market Approval (“PMA”), starting the US
    commercialization of ReActiv8.

Progress towards and achievement of these milestones is reported by the
management team to the Board on a regular basis. Outlined in the
following business and financial review sections of this report, we
describe our performance during the year ended 31 December 2015 on the
relevant areas above, including updates on progress towards milestones,
and analysis of expenditure and use of funds during the year.

Business review

Commercialization – We continue to make progress towards
commercialization of ReActiv8. On 2 November 2015 we announced that we
had submitted an application for CE Marking to our Notified Body. We
have since had several interactions with the Notified Body to progress
the application and we are awaiting CE Marking approval.

Following CE Marking, we plan to commence commercialization in Germany,
our first target market. Preparations for commercialization are ongoing,
including interaction with initial physician customers, and recruiting
direct sales and support staff. In Germany we plan to use a small direct
sales force to focus on a select group of multi-disciplinary centers who
see a large number of people with CLBP. As we gain experience with this
commercialization strategy, we will consider expanding to additional
customers and additional countries.

ReActiv8-A Trial – Positive results of the ReActiv8-A Clinical
Trial were announced on 31 August 2015, and on 4 December 2015 we
announced additional data confirming the positive results from this
clinical trial. These results were presented at the scientific meeting
of the North American Neuromodulation Society in December by Professor
Sam Eldabe (Middlesbrough, UK), an investigator in the ReActiv8-A
Clinical Trial. ReActiv8 also featured in a number of other
presentations on back pain presented by leading neuromodulation
physicians at this meeting.

ReActiv8-B Trial – On 29 May 2015, we announced FDA approval to
begin the ReActiv8-B Clinical Trial under an IDE. We have since worked
with the FDA to refine the protocol, and we are progressing clinical
trial site selection and initiation, physician training, and submissions
to Ethics Committees (Institutional Review Boards (“IRB”s) in the US).
The ReActiv8-B Clinical Trial is designed to generate data to form part
of the PMAA of ReActiv8 to the FDA. Following PMA (if obtained), we plan
to commercialize ReActiv8 in the US.

The ReActiv8-B Clinical Trial is an international, multi-center,
prospective randomized sham-controlled blinded trial with one-way
crossover. In summary, eligible subjects will have baseline data
collected and then following verification that the enrollment criteria
are met, ReActiv8 will be implanted. At the 14-day post implant follow
up visit, half the subjects will be randomized to receive appropriately
programmed stimulation (the treatment arm), and half will be randomized
to receive minimal stimulation (the control arm). Subjects will not be
informed about their allocation to the treatment or control arm, and all
subjects will be told that they may or may not feel something with
stimulation, and all will be encouraged to continue using ReActiv8 at
least until the 120-day primary outcome assessment visit. Subjects will
be instructed to not use any other therapies for CLBP from the time of
enrollment until after data collection at the primary outcome assessment
visit. Subjects will also be instructed to keep constant the use of
medications prescribed and used for low back pain until the primary
outcome assessment visit.

Contacts

Relations Presse et Relations Investisseurs:
Consilium
Strategic Communications (international strategic communications –
business and trade media)

Chris Gardner, Mary-Jane Elliott,
Matthew Neal, Hendrik Thys
Tel: +44 203 709 5700 / + 44 7921 697 654
Email:
mainstaymedical@consilium-comms.com
ou
FTI
Consulting (pour l’Irlande)

Jonathan Neilan
Tel: +353 1
663 3686
Email: jonathan.neilan@fticonsulting.com
ou
FTI
Consulting (pour la France)

Astrid Villette
Tel: +33 1 47
03 69 51
Email: astrid.villette@fticonsulting.com
ou
Relations
Investisseurs:

The Trout Group LLC
Jillian Connell
Tel:
+1 646 378 2956 / +1 978 302 5844
Email: jconnell@troutgroup.com
ou
ESM
Advisers:

Fergal Meegan / Barry Murphy, Davy
Tel: +353
1 679 6363
Email: fergal.meegan@davy.ie
/ barry.murphy2@davy.ie

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