The Polynovo Ltd (ASX: PNV) share price is tumbling following the release of the company's financial year 2022 results.
After opening 3.5% higher at $2.09, the medical device developer's stock plummeted to a low of $1.715, marking a 15% fall.
It has since posted a slight recovery to trade at $1.72, 14.85% lower than its previous close, at the time of writing.
Polynovo share price plunges as revenue lifts to $41.9m
Here are the key takeaways from the company's full-year results:
- Revenue lifted 42.8% on that of the prior corresponding period (pcp) to $41.9 million
- Posted a $1.2 million after-tax loss – an improvement on the pcp's $4.6 million loss
- Revenue from the company's NovoSorb Biodegradable Temporising Matrix (BTM) product lifted 47.6% to $37.6 million
- Revenue from the US grew 55.1% to $32.1 million
- Ended the year with $6.1 million in cash, down from $7.7 million at the end of the pcp
Most of the company's revenue last financial year came from its NovoSorb BTM product. The product is a dermal scaffold for the regeneration of the dermis.
Thus, COVID-19's significant impact on hospital trauma, burn, and elective surgery activity took its toll on the company in the first half.
The company's full year loss also includes the reversal of $4.7 million in share-based payments expense and an unrealised foreign exchange gain of around $500,000.
Excitingly, its monthly revenue reached a record $4 million in January.
What else happened in FY22?
There was plenty of exciting news from the medical devices company last financial year.
The Polynovo share price lifted 1.5% when the company announced it had enrolled its first patient in a Biomedical Advanced Research and Development Authority (BARDA) funded burn study in September.
It also lurched 15% on news of record monthly US sales in October and November.
What did management say?
Polynovo chair David Williams and CEO Swami Raote commented on the company's results, saying:
The FY22 effects of COVID-19 lockdowns and healthcare staff shortages on hospital trauma, burn and elective surgery is well known. As the year progressed, lockdowns ended, and as we learned to live with COVID-19, sales improved significantly.
Sales growth in each of our direct markets continued throughout the year … Monthly sales have consistently exceeded $3 million since December 2021 and are edging closer to consistently exceeding $4 million. Growth in sales has been driven by organic growth in established accounts together with new customer account acquisition.
The market available to PolyNovo is significant and we will continue to invest cash flows to accelerate capturing this market and growing top line revenue.
What's next?
The company is currently spinning many plates, with plenty set to come to fruition in the near future.
Firstly, it's working to optimise its distribution model in Europe after achieving its first sales in Denmark, Cyprus, Poland, Greece, and Turkey last financial year.
Back to North America, it submitted its Canada BTM licence application late in FY22, with approval expected in the second quarter.
It's also planning to double down on the US and Australia and New Zealand markets, with a focus to expand beyond burns.
On that note, many of the company's products are undergoing numerous clinical trials and studies to assess their ability to treat various ailments.
Polynovo share price snapshot
The Polynovo share price has been outperforming in 2022 so far despite today's tumble.
The stock has gained 15% since the start of the year. Though, it has fallen 11% since this time last year.
For context, the All Ordinaries Index (ASX: XAO) has slipped 7% year to date and 5% over the last 12 months.
