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This small cap ASX healthcare share is racing higher following a coronavirus update

asx shares higher

The Medical Developments International Ltd (ASX: MVP) share price is pushing higher on Tuesday after releasing an update on the impact of the coronavirus on its business.

At the time of writing the healthcare company’s shares are up 3.5% to $5.12.

What did Medical Developments International announce?

This morning Medical Developments International revealed that at this stage the potential negative impact of the COVID-19 virus on its business appears to be limited.

In respect to inventory, management advised that it has been building stock to cater for an anticipated increase in sales throughout calendar year 2020. It also has sufficient stocks of raw materials and finished goods on hand to meet forecast demand.

In addition to this, it notes that key suppliers remain open for business and the company continues to receive supplies and is fulfilling orders.

And while some of its raw material stock is directly imported from the China market, those materials are held in sufficient quantities to maintain production throughout calendar year 2020.

In respect to sales, the company has experienced a negative impact on a very small level of sales to China for the Veterinary business. Pleasingly, though, it has not yet experienced a decline in demand for its key pharmaceutical and medical products.

Management also provided an update on its clinical programs. It advised that the clinical programs underway in China, UK, Europe and South Korea have been disrupted by the coronavirus outbreak. These are either on provisional hold or being delayed as local medical authorities and services in these countries focus on COVID-19.

Positively, at this stage the company has not been advised of any delays from the U.S. FDA.

What now?

Medical Developments International advised that it is busy developing contingency plans to manage the ongoing risk faced by the business.

It also revealed that its staff are avoiding any non-essential travel and rostering has been implemented. Other than this, it appears to be business as usual for the company.

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James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of Medical Developments International Limited. The Motley Fool Australia has recommended Medical Developments International 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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