Medical device company Medical Developments International (ASX:MVP) has successfully raised $20 million from institutional investors as part of their plans to raise a total of $30 million to fund global expansion plans for its flagship non-opioid painkiller, Penthrox (aka the Green Whistle).
Capital raised at the Offer Price of $2.00 per share will be used to drive the Australian business expansion into the international emergency and ambulance sectors, improve direct sales strategy in the European market and increase resources to bolster global economic growth. The remaining $10m being sought by the Company will be offered as a retail component of their Entitlement Offer over the coming weeks, with the $20m secured being an accelerated institutional component.
In light of these new developments and capital, MVP Chair, Gordon Naylor, said, “I would like to thank our shareholders for their support and welcome our new investors onto the MVP share register. Their strong funding support will enable our investment to continue executing on our European and Australian growth strategies.”
In their FY22 guidance, MVP’s unaudited revenue increased 37% to $22.4 million. While Penthrox revenue rose by approximately 30% to $13.7 million, the revenue of their respiratory devices rose by more than 50% to $8.2 million.
Furthermore, the Company established its European regional team and set up the infrastructure to support its growth. MVP also deployed a France sales team to make the most of the momentum in the regional market. The direct sales model showed successful results in France, delivering higher gross margins. This successful pivot highlights potential in European markets. MVP has already commenced marketing initiatives to reposition Penthrox in core segments globally.
The leadership team has grown, too, to account for more international and industry experience, and has a greater focus on commercial execution now. Additionally, MVP has decided to narrow its marketing strategy to two key products, Penthrox and Respiratory. As for Respiratory, the Company intends on using targeted marketing to increase penetration and leverage the existing customer base.
Despite MVP’s increasingly global focus, they are not neglecting the Australian market. As per their FY22 report, 75% of Penthrox volumes currently come from the Ambulance segment – indicating their need to diversify their revenue sources.
Upon deployment of the funds raised from this latest capital raise, the Company expects to see significant growth in France as Penthrox sales are already doubling. They plan on further expanding their presence in Australian hospital emergency departments and the ambulance market. Thanks to enhanced distributor engagement, they expect to witness a boost to their average selling prices. They are also expecting to witness market share gains in the Respiratory segment, especially in the USA. That said, they recognise the potential hindrances to their plan, including Covid-19 and unexpected lockdowns, increasing competition and possible downfalls in their business strategy execution.
MVP has received a go ahead from the FDA to commence clinical trials for Penthrox in the USA. Launching Penthrox in America, along with their presence in Australia and Europe, will help MVP further its global expansion mission. It’s worth noting that the U.S. has a high dependency on opioid-based painkillers. In 2016, the country was consuming over 80% of the world’s opioids. What’s more is that, in 2020, nearly 75% of all drug-related deaths in the U.S. were because of opioid overdose. By transitioning to Penthrox, the U.S. could see a significant reduction in opioid dependency where many cases of abuse commenced from opioid-based painkillers.
Alinda is a Business Reporter for The Sentiment
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