Osteopore improves margins ahead of forecast increase in elective surgeries
Medical technology company Osteopore (ASX: OSX) says the “robust capital position” it ended the June quarter in will enable it to take advantage of an expected increase in elective surgeries.
The Australian and Singapore-based company, which has commercialised a range of patented 3D printed bioresorbable scaffolds for bone regeneration, recorded S$308,865 (A$301,237) in revenue and ended the quarter with $7.1 million cash in hand.
This revenue position reflects a 13.5% decrease on June 2020 but is 37.4% higher than the comparative period in 2019 with Osteopore forecasting a rise in activity as the backlog of elective surgeries is addressed as a declining rate of COVID-19 infections in some countries ease pressure on hospital systems.
The company also achieved a gross margin of 78.6% of sales revenue in the quarter, an encouraging improvement over the 73.7% margin achieved for the same period in 2020.
“Osteopore believes that its cost effective and high margin manufacturing process will ultimately become a major contributor towards the company achieving profitability as revenue scales,” it stated.
COVID-19 still presented challenges despite ‘essential’ label
As it was included as an “essential service” in Singapore, the company was able to remain open and operational throughout the last year. It also continued to receive non-dilutive government funding for business support due to COVID-19 and other grant schemes to the total value of $146,638.
Although Osteopore chief executive officer Goh Khoon Seng said the challenge lay in the circumstances that prevented opportunities to provide necessary training and support for both distributors and surgeons.
“Despite the challenges presented by COVID-19 restrictions in most countries, we continue to engage with our distribution partners and expect that, as the COVID-19 vaccination programmes roll out globally, our access to these critical partners will improve and sales will grow,” he added.
Patent grant and regulatory approvals
Highlights during the quarter included the grant of a European patent for ‘smart’ 3D biomimetic scaffolds to improve implant performance covering the production of Osteopore’s next generation scaffolds.
In addition, the company’s CE Mark was extended to include seven new designs, all sizes of Osteoplug, Osteomesh and Osteostrip, and extended product shelf-life.
The expanded approval means more patients will have access to Osteopore’s technology when undergoing cranial surgery and the extended shelf-life is expected to improve the ability of distributors to carry more stock to support both high and low volume hospitals.
“Based on market research by CETAS Healthcare on annual cranial procedures, Osteopore estimates that the serviceable available market value of the incremental access afforded by the extension exceeds $115 million,” the company reported.
Growing interest from surgeons in the US and Europe
Osteopore said the easing of COVID-19 restrictions in the United States has seen an increase in activity with the company’s distributor Bioplate driven by a growing interest by surgeons in the regenerative properties and ‘snap-fit’ features of Osteoplug.
Product adoption is also growing in Europe with surgeons in Italy and Greece placing orders for Osteomesh for evaluation in investigator-initiated trials relating to orbital floor procedures.
Meanwhile, surgeons at the Hamburg University Hospital in Germany used Osteoplug-C to accommodate the electrode leads from a deep brain stimulation (DBS) device implanted in a patient to treat the motor symptoms caused by Parkinson’s disease.
“This use of Osteoplug-C represents an exceptionally cost-effective approach to ensuring successful patient outcomes and extends the positive results attributed to the use of Osteoplug-C in securing the position of cerebral shunts into a new field of neurosurgery, including the treatment of a range of disorders including Parkinson’s disease, essential tremor, dystonia, epilepsy, as well as certain behavioural disorders and chronic pain management,” Osteopore said.