Ann: First $A9M sales month and $A10M revenue month, page-132

I think that the Ord Minnett analyst is confused on a couple of points.

He seems to believe that the Company will see limited growth until it launches products in “broader uses” that will “greatly expand PolyNovo’s addressable market”, nominating the hernia repair, breast augmentation and reconstruction markets.

As PolyNovo has made clear (see diagram below), their main focus is on BTM in trauma injuries, an estimated $3.6bn TAM of which deep dermal burns represent approximately one third ($1.2bn). They have hardly scraped the surface of this market.

They are wanting to enter the hernia/breast/reconstruction market by forging alliances. And they estimate that the TAM of that whole market is $2.3bn, with hernia and reconstruction TAM of ~$1bn. So definitely not a massively bigger TAM than what they are already pursuing.



A second error by the analyst is that he seems to regard BTM as just a burns product. While it has already been embraced by many surgeons as their go-to product in deep burns and is already No. 1 in burns in Australia, New Zealand and Germany (and No. 2 in the US), in the UK, BTM is already leading in trauma.

Finally, returning to the hernia product, the analyst states that it is “still very early in the design phase”, reasoning that prototype products are yet to be shared with clinicians or to have commenced clinical testing and that no timelines have been provided.

Swami Raote has made it clear that PolyNovo’s hernia prototypes have been developed in close consultation with clinicians and that surgeons have already had the opportunity to discuss and test these prototypes (subject to NDA signing) at the ABA meeting in the US last month.

My understanding is that clinical testing will not be required for a Substantial Equivalence 510(k) application, under which PolyNovo already received US FDA marketing clearance for BTM and MTX and under which most other hernia products, such as Aroa’s Endoform and Ovitex, were approved. Various non-clinical tests are required to prove substantial equivalence, including animal testing and my memory is that Swami referred to the hernia products being tested in swine some time back.

As for “no timelines”, PNV’s latest presentation indicates that the hernia product may enter the market within 12-18 months.