The PolyNovo Ltd's (ASX: PNV) share price took flight this afternoon after it announced an agreement with a US group purchasing organisation (GPO), Premier Inc.
The medical device company will sell its novel range of bio-resorbable polymers to Premier's member hospitals.
The PolyNovo share price was trading up 4.88% to close this afternoon at $3.01.
Let's look closer at PolyNovo's news today.
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Group purchasing agreement
PolyNovo's purchasing agreement with Premier will see the potential for the company's product NovoSorb BTM to be used in around 4100 health facilities and hospitals.
According to PolyNovo, its agreement with Premier will allow its products to be accessed by more than 2000 acute care hospitals, 100 designated trauma centres, and 63 children's hospitals.
NovoScorb BTM is a dermal scaffold for the regeneration of the dermis when lost from surgery or burns. It can be produced in many forms such as film, fibre, foam and coatings.
PolyNovo will have access to Premier's regional representatives from the beginning of next month and plans to provide them with training. The training will cover how they can best advise healthcare professionals on the use and purchase of NovoScorb BTM.
Why are GPOs important?
The company stated that GPOs were key to promoting new medical technologies in the United States. GPOs vet products on their efficiency and value before recommending them to healthcare providers.
PolyNovo said Premier was the second largest GPO in the US and held agreements with the fifth largest GPO, First Choice, and Aptitude, another GPO.
The company is in discussions with other GPOs to distribute NovoScorb BTM.
Commentary from management
PolyNovo managing director Paul Brennan commented on the agreement:
This signing with Premier, the second largest GPO in the US, is a major milestone. We have recently signed with Aptitude and First Choice. These GPO agreements put our disruptive BTM on a much larger list of hospitals than our sales team can get around in the short term.
We will continue expanding our sales team into new markets to support hospitals and surgeons but now also to match the geographical footprint of the GPOs. We look forward to demonstrating improved health economic benefits for Premier hospital members and their patients.
PolyNovo share price snapshot
The PolyNovo share price is up by 109% over the last 12 months but down 24.03% year to date.
The company has a market capitalisation of $1.9 billion, with approximately 661 million shares outstanding.
