Polynovo Ltd (ASX: PNV) shares are on watch today after the company announced expansion in Europe.
NovoSorb is a range of bio-resorbable polymers that can be produced in many formats, including film, fibre, foam and coatings. NovoSorb BTM is a dermal scaffold for the regeneration of the dermis (skin) when lost through extensive surgery or burns.
European expansion
PolyNovo announced today that it’s entering into Belgium, the Netherlands, Luxembourg (Benelux) and Sweden through an extension of the partnership with PolyMedics Innovations (PMI) in Germany.
The company said that PMI has been an excellent partner in Germany, Switzerland and Austria (DACH) with their sales exceeding projections to date and showing signs of further growth. PMI has recently placed its fourth stock order with PolyNovo since January 2020.
Management believe that PMI’s strong key opinion leader network has been a key success factor. This year’s track record has convinced PolyNovo that they can quickly bring further growth to its European revenue through these four additional countries. The Benelux and Swedish region have a population of around 39 million people.
Three patients have already been treated with NovoSorb BTM in Belgium with “excellent results”. The surgeries were done in preparing for this market entry. PolyNovo is expecting early adoption of NovoSorb BTM in key hospitals within Benelux and Sweden.
PMI CEO Christian Planck said: “Our customers in the DACH region have quickly become believers in NovoSorb BTM and we managed to capture a significant market share this year. Therefore, our team is excited about the possibility of bringing NovoSorb BTM to even more customers and patients in these additional four European markets. This geographical expansion marks an important milestone in our plan to become a leading provider of innovative burn and wound care solutions in Europe.”
Summary thoughts
This seems like a promising update for the long term success of PolyNovo.
Using CommSec estimates, PolyNovo is priced at around 63 times the estimated earnings for the 2023 financial year. It’s growing revenue at a fast pace, expanding geographically and seems on track to report an operating profit in FY21.
If you’re interested in the business then it could be worth owning at today’s price as it appears to be reaching an inflection point. However, I don’t know much about the business, there are other ASX growth shares that I have higher conviction in such as Pushpay Holdings Ltd (ASX: PPH).
