During Covid, the world fought to access the best respiratory solutions—air purifiers, masks, and respirators. However now, we seem to have entered a post-Covid reality, with some comparing Covid to a common cold. And the common cold does not usually demand a feisty response, reducing the need for respiratory solutions.
That’s not great news for respiratory solution companies, like Aussie respiratory protection solutions manufacturer CleanSpace Holdings (ASX: CSX), which thrived during the pandemic. But all hope is not lost for them.
CleanSpace has been awarded an important healthcare contract in the United States market, the largest healthcare market in the world.
It has signed the agreement with Capstone Health Alliance, a regional group purchasing organisation in partnership with Premier. CleanSpace will be its “preferred provider” for PAPRs (Powered Air Purifying Respirators) and Accessories and is the only contracted supplier of those products with Capstone. The agreement is in place until December 2025 and includes a commitment to a minimum annual purchase from CleanSpace.
Interim CEO of CleanSpace, Graham McLean, said, “We are very excited by the opportunity to work with Capstone. This underlines the strength of the GPO relationships with Premier, and we are looking forward to expanding our business with this major hospital and healthcare group to provide premium respiratory protection in this market.”
Capstone represents over 250 hospitals and 120 health systems across 24 American states. It also represents over 30,000 non-acute healthcare members across the continuum of care, business and industry.
The agreement with Capstone represents an important further milestone in the Company’s healthcare sales and distribution strategy. It also cements its prominence in the US market.
Senior Director of Strategic Sourcing at Capstone Health Alliance, Tabitha Calloway, said, “Capstone is committed to suppliers who bring innovative solutions that deliver value to our members. We are pleased that this partnership with CleanSpace will help provide our members with Respiratory Protection Solutions focused on improving caregiver safety and comfort. We look forward to a successful partnership.”
APRs, or Powered Air-Purifying Respirators, are a type of respiratory protective equipment (RPE) that use battery-powered blowers to force air through a particulate filter or a chemical cartridge, providing the user with clean air to breathe.
PAPRs are often used in situations where there are high levels of airborne contaminants or where the air quality cannot be guaranteed, such as in healthcare settings, chemical manufacturing plants, or during hazardous waste cleanup.
The US agreement has multifold benefits for the Company, as underlined by the Chair of CleanSpace, Bruce Rathie. He noted, “We believe that CleanSpace’s advanced premium solutions for the protection of US healthcare workers will deliver material benefits such as staff retention, cost efficiencies and best-practice management of exposure risks.”
These are important milestones at a time when some studies are projecting the decline of respiratory protective equipment. This was also evident in the Company’s first half of FY23 results. Its revenue fell almost 20% on H1 FY22 to $5.7 million, as healthcare sales suffered a major decline. It laid off 20% of its staff as it attempted to cut costs, given that its cash equivalents fell from over $24 million in H2 FY22 to $16.4 million by December 2022.
As the world moves on from the horrors of Covid, demand for respiratory protective equipment has also gone down. To address that, CleanSpace has been introducing new products—a Bluetooth-enabled line—and signing on US clients—Capstone, LineDrive (an American sales agency and some self-funded projects.
However, will that be enough to beat the slump?
Alinda is a Business Reporter for The Sentiment
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