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Medical technology company PolyNovo (ASX: PNV) recorded 31 per cent sales growth in the first half of FY21 despite its hospital clients getting waylaid by COVID-19, with 35 new accounts opened for its skin healing patches.
But shares in the Melbourne-based company - whose technology has been used around the world including for burn victims of New Zealand's White Island volcano tragedy - plummeted by more than 10 per cent in morning trading today, weighed down by slower than expected sales in October and November.
Investor sentiment was also hit by a six-month delay for patient recruitment to Q3 for a clinical study with the Biomedical Advanced Research and Development Authority (BARDA) in the US.
So while PolyNovo's sales surged 75 per cent in the first quarter of FY21, these rates slowed in the three months to 31 December, particularly in the US which has been a major growth market.
This is in contrast to managing director Paul Brennan's comments at a shareholder address in November claiming the group would harness its momentum to "double our revenues again in FY21".
In FY20 sales of PolyNovo's NovoSorb BTM bio-resorbable synthetic polymers jumped from $9.3 million to $19.06 million, even though the group was impacted by COVID travel restrictions, hospital access challenges and a head office lockdown for 120 days.
"The ability to pivot and conduct our business from a digital platform, supported by sales teams that made face-to-face visits whenever they could safely do so, has been fantastic," Brennan said on 13 November.
"We stand-out amongst medical device companies for continued growth under such difficult market conditions."
The address coincided with US Food and Drug Administration (FDA) approval for a multi-centre, randomised trial to compare the safety and effectiveness of NovoSorb in patients with severe full thickness burn injuries, backed by US$15 million worth of BARDA funding.
The trial across 25 sites in the US and Canada was due to start recruitment in the current quarter, but that is now scheduled for September and "will be reflected in increased revenue", according to PolyNovo.
Since Brennan's doubling revenue forecast and the BARDA announcement, shares soared from around $2.80 each to approach the $4 mark, but have been falling since the start of the year and were down 12.4 per cent today to $2.97 each at 12:11pm AEDT.
The company also entered new markets in Greece, Belgium, Netherlands, Luxembourg, Sweden, Finland and Taiwan during the last six months of 2020, and made its first sale in Taiwan in December.
"In the short-term forecasting sales will be challenging particularly in the US, however the medium-term outlook is strong, and we continue to see surgeons using and referring NovoSorb BTM to their peers," Brennan said today.
"Once hospitals have more capacity, we will see US and UK sales accelerate just as we have seen in New Zealand and Australia.
"While we have experienced a few bumps from COVID-19, we have built a significant base of new customers which holds us in a strong position. We will continue to expand our customer base which will enhance our success as the pandemic eases," added chairman David Williams.
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