A great year just became even better for shareholders of Ellex Medical Lasers Limited (ASX: ELX) today.
This morning the global leader in medical devices for the diagnosis and treatment of eye diseases announced the commencement of clinical training of physicians in China in the use of the company's Ellex iTrack device.
Ellex iTrack is a minimally invasive glaucoma surgery (MIGS) device and the only one of its kind that is currently approved by the Chinese medical device regulatory authority for sale in China.
The news sent its shares surging higher in morning trade by 4.5% to $1.39, bringing its year-to-date return to an incredible 87%.
The rise in its share price is not at all surprising considering the sheer size of the Chinese market. According to research firm Market Scope, the eye disease treatment market is expected to double in the next five years to be worth US$5.3 billion per annum.
The company's CEO Tom Spurling had this to say on the news:
"The demand for ophthalmic services in China is soon expected to exceed any other market in the world. This growing demand, combined with strong global interest in MIGS, offers a favourable market outlook for Ellex iTrack. With Ellex iTrack the only MIGS device approved for sale in China, we are well positioned to benefit from the global trend towards MIGS devices."
Although it is still early days, I've been impressed with the progress the company has made this year.
The company is well-funded after recently raising $10.3 million through a placement of shares with Australia and New Zealand investors. This placement was made at $1.47 per share, a touch higher than today's share price.
Not only will these funds be used to accelerate sales growth in the United States, they will also allow the company to further its pipeline of products associated with its iTrack device. Management expects this to underpin its role as an emerging leader in the MIGS device market.
At this stage it is a reasonably high risk investment still, so it wouldn't be suitable to all investors. For those with a lower tolerance for risk I would suggest adding it to your watch list and consider investments in CSL Limited (ASX: CSL) or Ramsay Health Care Limited (ASX: RHC) instead.
To those that do invest in Ellex I would recommend restricting it to just a small part of your portfolio at this point in time.
