PolyNovo posts record US quarterly sales, secures debt facility for Melbourne factory expansion

Australian medical device company PolyNovo (ASX: PNV) has posted record US sales for the March 2020 quarter, validating an earlier claim that the coronavirus pandemic would not have any material impact on its business.

The company’s sales for the quarter were $4.49 million, reflecting a 166% increase on the $1.69 million recorded in the previous corresponding period, while sales for the month of March were 173% greater than March 2019, and also greater than January and February 2020.

Sales in the second half of March were higher than the first half, with the total March result including a monthly record sales result for the US region.

Much of this was attributed to six new hospitals being added to the books during the month, four of which were in the US, and two of which have already commenced increasing their orders.

Video meetings

PolyNovo chief executive officer Paul Brennan said the company’s sales teams have been utilising video meeting platforms to reach customers in the current social distancing environment.

“COVID-19 has limited our sales teams’ ability to have direct face-to-face access in many regions, so, they have been using platforms like Zoom to conduct product presentations,” he said.

“Our sales are still lumpy and predicting sales between months and within months is difficult, but there is a strong upward trajectory.”

Mr Brennan said the company has been actively promoting its burns technology known as NovoSorb BTM (Biodegradable Temporizing Matrix), which is being applied to trauma cases with “fantastic outcomes” and in ways which are time and cost-effective to hospitals, surgeons and patients.

“In one recent video presentation, two surgeons who had never used BTM could see the inherent clinical, economic and resource benefits over the incumbent competitor and have indicated they will switch to ours,” he said.

Burns study

A recent study conducted in Australia and France to assess the safety and performance of BTM in the treatment of patients with deep burn injuries found the product could be successfully used in full thickness burns.

The study assessed the integration of BTM into the wound bed after application, wound healing after skin grafting and how wounds healed over time.

Of the 30 patients recruited, BTM was applied to 100 individual burn wounds and 22 patients completed the study.

Four patients died due to serious adverse events not related to BTM and four were lost to follow-up before the study was completed, PolyNovo said.

According to the company, the study results found high rates of early wound closure and BTM-treated wounds were found to remain robust as they continued to heal and mature.

Robust performance

Mr Brennan said the results provide clinical evidence to support the role of BTM in temporary wound closure and reconstruction of a dermis for subsequent wound healing.

“This full thickness burn trial reinforced what surgeons across the world are reporting – that BTM is robust, relatively simple to use, performs extremely well in the most challenging of applications and seems to be resilient even if there is an infection,” he said.

“The results of our study add to the high level of data that clinicians request to support their decisions to make BTM their preferred choice of dermal matrix,” Mr Brennan added.

He said the “excellent results” would strengthen PolyNovo’s marketing of BTM to surgeons worldwide.

Debt facility

PolyNovo today announced it has secured a $9.3 million debt facility with National Australia Bank, which will be directed towards an expansion of its Melbourne-based factory.

The loan will be used to construct a new hernia cleanroom, purchase manufacturing equipment and for associated capital expenditure.

The cleanroom is due for completion in May.

Any leftover cash will be combined with the company’s existing $7.4 million cash at hand and used for working capital and growth.

Mr Brennan said PolyNovo is well-funded due to its breakeven performance in the early part of the current financial year and a profit announced for the month of January.

At midday, shares in PolyNovo were trading 11.94% higher at $1.88.