The Uscom Ltd (ASX: UCM) share price rocketed higher today following the announcement that the Chinese government has recommended one of its products for use in treating coronavirus.
After surging as much as 38.7% in afternoon trade, Uscom shares closed the day 29.03% higher at $0.40 per share.
Uscom's business
Uscom manufactures non-invasive cardiovascular and pulmonary medical devices. Its cornerstone product is the Uscom 1A advanced hemodynamic monitor which is used to measure cardiovascular function.
The company also manufactures and markets a blood pressure measuring device and a pulmonary function testing device. Uscom reports it has a strong product pipeline projecting well into the next 10 years.
Uscom's 1H20 results
Uscom delivered its half-year results today reporting a 35% decline in revenue which fell to $0.96 million in the first half. Revenue was delayed as the company restructured its China distribution operations. A new subsidiary was commissioned in Beijing with the first imports of devices into China occurring late in the half. Sales were also delayed by the lengthy approval process by China's National Medical Products Administration (NMPA).
Approval was received at the end of the half, while the China subsidiary revised previous distribution contracts increasing both margins and volume. A rapid increase in cash receipts followed the close of the first half with a $0.52 million increase in cash on hand in the first eight weeks of the second half.
It was a slow half in Europe as regulatory approvals have been slow to be released, resulting in reduced international sales. As the approvals are received, sales opportunities are expected to increase.
In the US, Uscom contracted an additional 28 sales personnel to sell devices to over 80% of the nation's geography. This significant increase in reach into the largest medical device market in the world has increased sales leads, with sales expected to follow.
The significant restructuring in distribution across all three major markets is in preparation for regulatory approval for new products BP+ and SpiroSonic.
Uscom Executive Chairman Rob Phillips said, "operationally our significant restructure of sales and marketing strategies across China, Europe, and the US is beginning to generate results and significant incoming cash. . . . we are shifting manufacturing into top gear to meet anticipated demand."
Chinese Government recommendation
Uscom also announced today that the Chinese Government has recommended Uscom 1A for treating severe cases of coronavirus and is installing devices into Chinese hospitals.
Uscom Executive Chairman Rob Phillips said, "The Chinese National Health and Medical Commission publishing national coronavirus guidelines specifically and generally recommending Uscom 1A technology to treat adults and children with the most severe cases of the most significant global health epidemic in 20 years. This government recognition for the years of science to develop our Uscom 1A demonstrates we are changing global practice."
