Why is the PolyNovo share price surging 13% higher today?

PolyNovo shares are on fire on Wednesday…

| More on:
a doctor in a white coat makes a heart shape with his hands and holds it over his chest where his heart is placed.

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Key points

  • PolyNovo's shares are shooting higher on Wednesday morning
  • This follows the release of a strong third quarter update
  • The medical device company also revealed that its balance sheet has strengthened

The PolyNovo Ltd (ASX: PNV) share price is on the rise on Wednesday morning.

At the time of writing, the medical device company’s shares are up 13% to $1.22.

Why is the PolyNovo share price on the move?

Investors have been bidding the PolyNovo share price higher following the release of a third quarter update.

According to the release, PolyNovo delivered unaudited revenue of A$12.26 million during the third quarter of FY 2022. This represents a 59.3% increase on the revenue of A$7.69 million reported during the prior corresponding period.

This reflects a 79.4% increase in US sales to a record US$6.89 million (A$9.53 million) and an 81.9% lift in ANZ sales to A$1.16 million. It also includes income of A$1 million relating to BARDA and A$0.1 million from a Victorian State Government grant.

This means that PolyNovo’s year to date revenue is now A$30.4 million, which implies an annual run rate of A$48 million.

PolyNovo’s Chair, David Williams, explained that this result was driven by an increase in its salesforce and easing COVID-19 headwinds.

He said “More sales reps equals a wider geographical footprint and increased sales. More reps and the diminishing effects of Covid, have driven record sales in US, UKI and Australia.”

What else?

One thing that has been weighing on the PolyNovo share price this year has been concerns over its dwindling cash balance and the potential requirement of a capital raising in the near future.

Positively, the heavily shorted company’s cash balance increased during the third quarter even before taking into account the sale of its Lorimer Street property.

At the end of March, PolyNovo had cash of A$3.8 million, which was up A$0.5 million since the end of December. This will soon be boosted by a further A$6.35 million from the Lorimer Street property sale when the process completes in June.

Finally, management advised that its clinical trial programmes remain on track. This includes recruitment for the pivotal burn trial and enrolment of the first patients for the DFU trial.

PolyNovo is also on track to file for the 510K approval for the Matrix product during this financial year and work on the prototypes for Hernia development and new designs for BTM are also on track.

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns and has recommended POLYNOVO FPO. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on Healthcare Shares

Female doctor with a mask holds out hand in a stop gesture.
Capital Raising

Up 90% in 2 weeks, here’s why the Paradigm share price has been halted

The biopharmaceutical company is planning a capital raise.

Read more »

A doctor appears shocked as he looks through binoculars on a blue background.
Broker Notes

Goldman Sachs gives its verdict on the CSL share price

Where next for CSL's shares?

Read more »

Healthcare Shares

Mayne Pharma share price rockets 25% on $680 million payday

It's been a good day for the ASX pharmaceutical company.

Read more »

Two researchers discussing results of a study with each other.
Healthcare Shares

What’s with the Polynovo share price on Wednesday?

Shares in the ASX medical devices company hit their year to date high today before retreating again.

Read more »

A man in a wheelchair stretches both arms into the air in success.
Healthcare Shares

Imugene share price lifts 11% on clinical trial update

Imugene shares are flying higher today.

Read more »

Two scientists in a Rhythm Biosciences lab cheer while looking at results on a computer.
Healthcare Shares

Why is the Polynovo share price powering 6% on Tuesday?

A government grant is set to boost the medical devices company's production capability.

Read more »

A young woman slumped in her chair while looking at her laptop
Healthcare Shares

Mesoblast share price slides 8% following $65m capital injection

Mesoblast took a hit early in the session today.

Read more »

Medical technicians wearing white medical coats conduct a test in a laboratory.
Healthcare Shares

CSL share price climbs as $16 billion Vifor acquisition becomes effective

CSL shares are in the green on Tuesday...

Read more »