Shares in Melbourne-based medical device developer PolyNovo (ASX: PNV) surged more than 20 per cent in early trading after the company announced it had received US regulatory approval to sell a second surgical product to its biggest single market.
PolyNovo has received US Food and Drug Administration clearance for its Novosorb MTX product, which offers a single-step procedure for soft tissue regeneration in the management of complex wounds.
Novosorb MTX will be sold alongside the company’s established Novosorb BTM product, which is being embraced by surgeons in the US to treat burns victims and increasingly diabetic foot ulcers. PolyNovo estimates the US market alone for Novosorb MTX is worth about $500 million a year.
“MTX is a synthetic dermal substitute comprised of NovoSorb foam providing a scaffold for wound healing across deep, complex structures such as bone and tendon,” says PolyNovo’s medical director Dr Marcus Wagstaff.
“For wounds that do not require temporising or protection from contraction, there is a clear clinical need for MTX. It is best suited in cases where wound contraction and reduced time to healing are preferred, such as diabetic and venous ulcers, and smaller traumatic or postsurgical wounds, for example after excision of skin cancer.”
Wagstaff, a plastic surgeon by profession, says MTX promises clinicians ease of use and simplicity as a one-step procedure.
FDA approval for MTX is seen as a big step in PolyNovo’s growth plans in the US, the profit engine room for the company where sales in FY22 accounted for about 85 per cent of $37.6 million in group revenue. PolyNovo revealed last month that, as a stand-alone business, its US operations were profitable last financial year.
PolyNovo CEO Swami Raote says the company plans to bring the product to market as soon as possible to capitalise on the company’s expanding footprint of hospital customers in the US.
“We expect clinicians to carry BTM and MTX and provide them a richer tool kit for patient care. We aim to quickly put MTX in the hands of key opinion leader surgeons,” says Raote.
“The creation of MTX is an exciting example of surgeon-led product development that opens a significant new market for us.
“We are proud to bring MTX to US surgeons and patients, and believe a product specifically designed for use in a single-stage procedure will leverage and expand our penetration of the advanced wound care space.”
Investors pushed PolyNovo shares more than 20 per cent higher in early trading following a trading halt announced by the company last Friday ahead of today’s announcement. The lift saw the shares rebound from recent lows after the company released its full-year earnings result last month.
PolyNovo narrowed its bottom-line loss to $1.19 million in FY22 from $4.6 million a year earlier as group sales rose 47.6 per cent to $37.6 million.
The company announced plans to expand into Canada later this year after securing a distributor partnership. Swami also revealed in August a keen interest for PolyNovo to establish a foothold in India as early as November.
“India is not an easy market in many medical device markets, but it is also a must-do market,” he told investors in a briefing following the release of the FY22 financial results in August.
PolyNovo shares were trading 21c higher at $1.565 at 11.16am AEST.
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