Here is what Macquarie had to say. Note their TP is still $1.90....

Here is what Macquarie had to say. Note their TP is still $1.90. Their DCF calc came in at $2.19 as Tamborine referenced.

PolyNovo (PNV AU)
FDA likes the (M)a(T)ri(X)

Key points
 PNV’s MTX product has received FDA 510(k) clearance.
 MTX is complementary to existing BTM offering, but does not contain a
sealing membrane, allowing for use in a wider variety of indications.
 We expect this to help diversify revenue and allow greater penetration into
existing hospital accounts. Retain Outperform.

Event
• PNV announced FDA 510(k) clearance for NovoSorb MTX, a new product for
soft tissue regeneration for the management of complex wounds.

Impact
• Clinical indication: MTX utilises the underlying NovoSorb technology used in
BTM, but MTX will lack a sealing membrane (meaning surgeons will only
require a one-step procedure). MTX’s clinical indications include use in partial
and full thickness wounds, pressure ulcers, venous ulcers, chronic and
vascular ulcers, diabetic ulcers, and surgical and trauma wounds.
• Complementary product offering: Clinical indications may be for a wider
variety of cases where a sealing membrane is not required, such as when
wound contraction is not a concern and reduced time to healing is preferred.
PNV expect clinicals to carry both MTX and BTM, with the aim to have Key
Opinion Leader surgeons see the product in the very near term.
• Initial entry in the US: This FDA approval allows for initial US market entry,
with the estimated total addressable market is A$500m. PNV filed their MTX
product for FDA 510(k) on 1-Aug-22, with management commentary at FY22
result of anticipated market entry in late CY22.
• FY23 forecasts: Our current forecasts assume contribution from MTX in 2H23
(early CY23). As this approval is earlier than our expectations, market launch
may potentially be earlier than our forecasts as a result. For FY23, we expect
A$61.2m of sales revenue (excluding BARDA revenue), representing 63%
growth on FY22. Compositionally, we expect:
 1H23 to provide A$26m (60% growth vs pcp and 22% growth HoH)
 2H23 to provide A$35.2m (65% growth vs pcp and 35% growth HoH) with
our forecasts assuming sales staff effectiveness ramps in 2H23.

Earnings and target price revision
• No change.
Price catalyst
• 12-month price target: A$1.90 based on a DCF methodology.
• Catalyst: AGM

Action and recommendation
• We believe MTX will broaden the depth of PNV’s product offering and allow for
greater penetration into existing hospital accounts. We see MTX as also
helping to diversify sales in indications outside of burns. Further, we see the
investment in increased sales force to continue to support sales going forward.
Retain an Outperform rating.

Valuation A$ 2.19
- DCF (WACC 7.4%, beta 1.0, ERP 5.0%, RFR 2.8%,
TGR 2.8%)
12-month target A$ 1.90
12-month TSR % +40.2
Volatility Index Very High
GICS sector
Health Care Equipment & Services
Market cap A$m 897
30-day avg turnover A$m 3.1
Number shares on issue m 661.7