Demand for biotech PolyNovo skin graft technology surges even through coronavirus pandemic

Jared Lynch - The Australian April 7 2020

Listed biotech PolyNovo said it is on track to more than double full-year sales, with demand for its skin graft technology continuing to surge despite hospitals across the globe facing unprecedented pressure from the coronavirus pandemic.

PolyNovo’s sales for the three months to March soared 166 per cent, compared with the same period in 2019, to $4.49m.

It comes as governments have banned elective and non-essential surgeries in hospitals to preserve resources, including personal protective equipment and intensive care beds, to care for COVID-19 infected patients.

Skin grafts, however, are often essential surgeries with PolyNovo’s NovoSorb BTM product used to treat patients with severe burns and other skin trauma as well as flesh eating diseases.

PolyNovo chief executive Paul Brennan said much of the sales increase was late in the quarter, with the month of March alone recording a 173 per cent rise to $1.76m. It follows the company recording its first $1m month in sales in December,

He said sales during the last two weeks of March were stronger than the first half, with the company securing six new hospital accounts, including four major hospitals in the US.

PolyNovo’s shares surged 9.85 per cent to $1.84 during midday trade on Tuesday against a flat broader market.

But Mr Brennan said PolyNovo wasn’t completely immune from COVID-19, as the company faced travel restrictions and social distancing measures in Australia and other countries.

“The COVID-19 epidemic has limited our sales team having direct face to face access in many regions. However, our teams have been using platforms like Zoom to conduct product presentations,” Mr Brennan said.

“In one recent 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 NovoSorb BTM. Any resource sparing our product brings to hospitals is valuable for all patients.”

PolyNovo is now pressing ahead with development of its product to treat hernias, borrowing $9.3m from National Australia Bank to build a hernia cleanroom and purchase manufacturing equipment.

While the company said it was on track to “easily more than double” 2019 sales this year, chairman David Williams said it was still relative early days for PolyNovo, which traces its origins to soon after the Bali bombings in 2002.

“Our sales are still lumpy and predicting sales between months and within months is difficult,” Mr Williams said.

“But there is a strong upward trajectory. Our superb technology is being applied to trauma cases with fantastic outcomes and in a way that is time and cost effective to hospitals, surgeons and patients.”