Hey guys, I posted this on the $PO3 thread this morning. I’m impressed with NAN’s recent performance and its emergence as a global power in medical disinfection.
In case you’ve not seen Michael Kavanagh’s recent presentation, I summarize the main points below.
As shareholders in $NAN/Nanosonics celebrated the group’s market cap hitting a record $1.4b, their leader stepped in front of a camera and shared some intelligence – intelligence about what’s happening in the global medical disinfection market.
This intelligence would be useful to $PO3/PuriflOH, now gearing for a two-pronged, disruptive assault on the disinfection market in two main sectors:
1. Medical spaces
2. Medical instruments
While PO3 and NAN run platforms that kill medical bugs with disinfecting mists, they use different compounds in those mists.
PO3 uses Somnio Global’s FRG tech to produce Bluemist consisting of:
NAN uses its trophon2 device to cleanse ultrasound probes with a mist of:
. Nebulized hydrogen peroxide (H202)
Here’s the thing: According to a table in PO3’s half year report filed on February 28, the oxidation potential of the hydroxyl radical alone is 2.8 volts. The oxidation potential of hydrogen peroxide is 1.77 volts.
Doing a quick sum, it’s clear that the hydroxyl radical outperforms hydrogen peroxide by 58.2%.
Conclusion: PO3’s oxidation tech is much superior to NAN’s oxidation tech.
It follows that PuriflOH has the potential to disrupt NAN.
So what’s NAN up to?
In a 15 minute YouTube presentation organized by Morgans, Brisbane and posted on March 27, NAN CEO Michael Kavanagh speaks candidly about sales performance, market share, annuities and margins.
His disclosures may interest/encourage – senior PO3 leaders such a billionaire director Bill Parfet, “Stryker hero” Jim Heath and Detroit-based ED, Steve Annear.
Kavanagh - now a world authority on high level medical disinfection – reveals in the Morgans clip that Nanosonics:
1. Controls 75% of the Australian market ultrasound probe disinfection market
2. Has installed trophon disinfection devices in every “luminary” hospital in the US
3. Controls 43% of the American market...supplying 17,000 units to 4000 medical centers
4. Sells an average of four trophon disinfection units priced at $US6500-$US8500 per US client medical facility
5. Grosses $A3000 in high margin (90%?) annuity/consumable revenue per device in the US and almost $A6000 per device in the UK
6. Has deals with OEMs such as Canon, Philips and Toshiba whereby they bundle trophon with their ultra sound unit sales, allowing NAN to create customers for consumables
7. Divides the global probe disinfection market into three sub-markets – North America, Europe and Asia/Pacific, each with a prospective installed base of 40,000 trophon units…giving a projected global base of 120,000 units.
NAN’s trophon sales so far? Some 19,310 units, ie 16.5% of the targeted global market.
Noting that NAN consumables revenue grew 60% in the December half, Kavanagh says: “The important thing in this business in growing the installed base because with that installed base comes the annuity from the consumables.”
Kavanagh makes two other key points:
1. NAN is joining with Japanese Society for Obstetrics and Gynaecology to frame a new medical instrument disinfection regime for Japan.
2. NAN has poached two top executives from $COH/Cochlear to help run its expansion.
And he finishes with this: “From our R&D efforts we intend to bring - subject to regulatory approval – a totally new, non-trophon-related, non-ultrasound-related infection prevention product to market by the end of FY 20.”
What will the product do? While Kavanagh won’t publicly say, NAN’s Saban Ventures affiliate has recently been busy seeking patent protection for technology to disinfect medical spaces.
NAN Price at posting:
$4.42 Sentiment: Hold Disclosure: Not Held
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