PNV Media Thread, page-2872

REPORT: ASX wound care is rapidly becoming an ‘exciting subsector’

Story byNadine McGrath

• Morgans releases its ASX wound care report seeing value in Aroa Biosurgery, Avita Medical and PolyNovo

• Global wound care market is estimated to grow at a CAGR of 5.9% to reach US$28.6 billion by 2028

• ASX wound care companies head towards profitability, show topline growth greater than 20% pa for next three years

Broker Morgans has released its wound care report and says itsees values in all three of the ASX companies it covers in the sector,forecasting each to grow revenue at >20% pa over the next three years andmove into profitability.

The global wound care market was estimated to be worth US$21.5 billion in revenue in 2023 and forecast to reach US$28.6 billion by 2028 with a CAGR of 5.9%.

An increase in use of regenerative medicine for wound treatment,advancements in wound care management and growth in emerging markets is beingattributed to the growth.

Furthermore, a growing elderly global population, rise intraumatic injuries, surgical procedures along with increasing prevalence ofdiabetes and obesity leading to diabetic ulcers and venous leg ulcers has beenattributed to an increase in wounds in the past decade.

There are several large international pharmaceutical companiesinvolved in wound care including 3M, Smith+Nephew, Mölnlycke, ConvaTec andJohnson & Johnson.

However, Morgans Healthcare analyst Scott Power told * wound care companies are also showing significant growth and potential.

“Wound care companies on the ASX are showing top-line growthgreater than 20% pa for the next three years and are expected to be profitablewhich will attract more investor attention,” Power says

“To achieve this growth and build market share, significantR&D funding (>10% of revenue) is being pumped into innovative productswhich will further improve wound care outcomes for patients.

“Its an exciting subsector of the healthcare market to increaseexposure to.”

PolyNovo(ASXNV)

PNV specialises in the development and commercialisation ofdermal regenerative solutions with its FDA approved Novosorb BTM (biodegradabletemporising matrix) is used to temporarily close a wound and aid the body ingenerating new tissue.

NovoSorb BTM is a man-made synthetic polymer that does notcontain any biologic materials, which the company says is important becausetraumatic wounds often contain bacteria that may cause infection.

PNV’s complementary NovoSorb MTX has received 510(k)FDA clearance. PNV says it uses the technology platform underpinning the clinical success of BTM, but without a sealing membrane.

It was developed to satisfy clinician demand for a product foruse in indications where the sealing membrane is not required.

CEO Swami Raote said at the company’s AGM this month NovoSorbMTX has “already received strong support from surgeons”.

“Our limited market release in the US and NZ will develop theclinical evidence to support a full commercial launch, planned for FY24,” hesays.

“The innovation pipeline is exciting, with the extension of theNovoSorb MTX and BTM portfolio, to include surgeon-led innovations, planned inFY24.”

PNV also provided a trading update for July and August 2023 atits AGM, with total sales up 83.9% year-on-year, with significant growth in theUS, Australia and the UK.

“Although no formal guidance provided, profitability is insight,” Morgans wrote in their report.