BTC Health secures $5m ECMO contract with Royal Children’s Hospital for life-saving medtech

Following a highly competitive tender process, medical distribution company BTC Health (ASX: BTC) has secured a $5 million contract with the Royal Children’s Hospital (RCH), continuing a run of successes since undertaking a business transformation 12 months ago to diversify its product portfolio. 

This five-year RCH contract marks the first implementation of the Eurosets ECMOLIFE equipment in Australia, to be fully integrated into the hospital’s paediatric intensive care unit by the end of 2024.

ECMO is a critical life-saving technology primarily used for patients whose heart and lungs are unable to function on their own due to severe illness or injury. By taking over the function of these vital organs, ECMO temporarily allows the heart and lungs to rest and recover. The technology, though costly, is an essential part of the intensive care toolkit, providing support for some of the most vulnerable patients in critical care situations. ECMO is used in a range of conditions, from severe respiratory failure to cardiac arrest, and is recognised as one of the most complex and expensive interventions available, with each admission costing an average of $305k. 

The contract with RCH is a major step forward for BTC Health as part of its ongoing transformation over the past 12 months. The company has diversified its product portfolio after facing disruption in April 2023, when its largest supplier, Avanos Medical, discontinued the supply of its acute pain infusion products to Australia and New Zealand. These products had previously accounted for around 80% of BTC’s revenue, forcing the company to firstly find alternatives for the infusion pumps before expanding its product catalogue to reduce future risk. This diversification strategy has been particularly targeted by BTC, which has undertaken extensive research into medical devices and products that are highly popular amongst medical professionals around the world but have never made their way onto Australian shores. 

BTC Health has undergone a dramatic turnaround since consolidating its business and reducing single-party risk. The company has secured exclusive distribution partnerships with eight new international product manufacturers. This diversification has significantly broadened BTC’s product offering, more than doubling the number of products it distributes to 132 by the end of FY24, up from just 57 the previous year.

The introduction of the Eurosets ECMOLIFE equipment, alongside other new medical devices, reflects BTC Health’s commitment to establishing a more resilient and growth-oriented business. This effort has already yielded positive financial results, with BTC reporting a 5.1% increase in revenue to $8.2 million for FY24, alongside a $0.5 million improvement in earnings, bringing the company closer to breaking even. Importantly, BTC Health’s transformation has been underpinned by disciplined cost controls, allowing the company to strengthen its financial position while expanding its product offerings.

“Partnering with RCH and supporting their expert team in caring for vulnerable children is an absolute privilege,” said BTC Executive Chairman Dr Richard Treagus. This is the first implementation of our high-quality ECMOLIFE equipment in Australia, and we are excited about the opportunity to expand our national rollout further.”

As BTC Health continues to grow its product portfolio and enhance its distribution capabilities, the company is well-positioned to further capitalise on new opportunities within the medical technology sector. 

Beyond RCH, other customers within BTC’s distribution network of major hospitals include Healthscope, Ramsay Health Care, Cabrini and all State Governments across Australia.