In early trade the Medical Developments International Ltd (ASX: MVP) share price has climbed 5% to $4.95 following another positive announcement out of the healthcare company.
Today's release revealed that the company's pain management product Penthrox has received a second large order from its partner Galen Pharmaceuticals Ltd for distribution in the United Kingdom and Ireland.
Penthrox, also known as the green whistle, certainly has been making strides in the market recently. In January Penthrox sales in the UK and Ireland hit a record high, thanks partly to the growing demand from hospitals.
At present there are 38 hospitals using the product, with another 137 being targeted by the company. As well as hospitals the company has made good progress with ambulance services and trauma centres.
The company appears to be very pleased with the roll out of Penthrox in the UK and Ireland. CEO John Sharman has stated that the roll out is "progressing well and is ahead of our initial expectations and forecasts."
But the UK and Ireland market is just one of a number that the company has entered into recently. If the company can replicate this early success in other markets then I believe Medical Developments International is on course to deliver significant sales growth over the next decade.
Should you invest?
Whilst the company's shares are certainly on the expensive side at 93x estimated FY 2017 earnings, I think its explosive growth prospects go some way to justifying the premium.
But as we have seen numerous times before with growth shares, failure to deliver on the market's expectations can lead to a sharp drop in a company's share price.
Whilst I have confidence the company will live up to expectations, I feel it would be prudent to restrict an investment to just a small part of your portfolio.
Overall I think the company is up there alongside CSL Limited (ASX: CSL) and Mayne Pharma Group Ltd (ASX: MYX) as great buy and hold investment ideas in the healthcare industry.
