Today, shares of junior biotechnology company, Admedus Ltd (ASX: AHZ), have soared as much as 17% on the back of a positive market update.
In an announcement to the ASX, Admedus said its regenerative cardiovascular tissue technology, CardioCel, has officially launched in Hong Kong.
CardioCel is a 'patch-like' technology which has moved beyond clinical trials into commercialisation and sales. It is used to repair deformities on tissue surrounding the heart, whilst avoiding calcification.
However, despite its clinical success, CardioCel has not gained as much as traction with surgeons as investors – and the company – would have liked. This is reflected in Admedus' 37% share price decline over the past 12 months.
Nonetheless, Admedus CEO Mr Lee Rodne said, "The initial sales in Hong Kong are important as these countries represent significant cardiovascular markets in the Asian region."
He added, "Expansion in this region is part of our global strategy for CardioCel."
According to the company, sales of CardioCel continue to increase, although it did not specify the exact growth rates it's currently achieving.
"CardioCel® use continues to expand, with 28 European centres and a further 28 centres in the US using the product, with the product now used in over 60 centers globally," the company said.
In the half year to 31 December 2014, Admedus' revenues grew by 17% to $4.795 million, but its loss widened to $11.4 million, from $1.4 million year-over-year.
In addition during the half year Admedus reported a net operating cash outflow of $9.56 million, but had just $9.6 million in cash on its balance sheet, indicating it may need to conduct another capital raising soon.
Admedus did note this in its half year report's Notes to the Financial Statements, "The Group may need to raise additional capital during the next 12 months to fund its future activities, including provision for ongoing working capital, R&D and any required production activities."
Is it time to buy Admedus shares?
I sold my shares of Admedus recently. I'll admit, I may have been too hasty in my decision – time will tell – but with a long list of promises it appears I made the right decision to take my profits off the table. I'm waiting to see how the company reacts to its dwindling cash pile and would prefer to wait until the growth rates turn into meaningful revenues before hitting the buy button.
