The Medical Developments share price is now down 49% over the past year

Last month Medical Developments International Ltd (ASX: MVP) reported its half-year results for the period ending December 31 2018. Below is a summary of the results with comparisons to the prior corresponding half year.

  • Net profit after tax of $132,000, up 3.9%
  • Earnings before interest and tax $136,000, down 4.9%
  • Revenue of $9.52m, up 22%
  • Earnings per share of 0.21c
  • Fully franked interim dividend of 2 cents per share
  • Cash on hand of $32.3m
  • Penthrox (green whistle) sales up 37%
  • Penthrox sales in Europe and UK up 375%
  • Other medical device sales up 6%

So why has the Medical Developments share price collapsed in half over the past year?

Despite some strong looking headline numbers MVP shares have fallen as the company has struggled so far to get its key Penthrox (emergency pain relief product used by ambulance crews, field medics, etc) product approved in the lucrative U.S. healthcare market.

Today Medical Developments’ management team told investors it expects to meet with the U.S. healthcare regulator the FDA in the final quarter of fiscal 2019 to discuss the FDA’s “Clinical Hold” status issued in August 2018 on the Penthrox product.

MVP’s management will attend the meeting armed with plenty of new data (including safety and clinical trial data) presumably in order to try and agree some sort of roadmap to get the product approved in the US.

Outside the U.S. problems, sales continue to perform well and the company has big plans to expand further into Europe, Asia, and China. In total it expects to launch the product in another 31 countries over the next 12 months.

The company has a market value around $261 million based on a $3.99 share price, which means a lot of growth is still baked into the valuation despite the precipitous valuation falls recently.

Others in the up-and-coming healthcare space to consider include Nanosonics Ltd (ASX: NAN) or even SomnoMed Limited (ASX: SOM).

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Motley Fool contributor Tom Richardson has no position in any of the stocks mentioned.

You can find Tom on Twitter @tommyr345

The Motley Fool Australia owns shares of and has recommended Nanosonics Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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