This morning, Monash IVF shares fell 25% after the company reported an incident involving an embryo at its Clayton laboratory.
Monash IVF Group Ltd (ASX: MVF) advised that the patient's own embryo had been incorrectly transferred back to them on 5 June. The company said this was contrary to the treatment plan, which designated the transfer of an embryo of the patient's partner.
The company is Melbourne-based and has 13 clinics around Australia.
Image source: Getty Images
An unfortunate start to 2025
This incident is the second misfortune to be revealed this year.
Just two months ago, the company disclosed that a Brisbane patient was mistakenly implanted with another patient's embryo. Monash IVF shares fell 36% the day this became known to the market. The incident had continued to attract significant media attention and weigh on investor sentiment.
In a statement today, Monash IVF said it was conducting an internal investigation into the latest incident and has extended the scope of the independent review into the Brisbane incident. Management noted that the two incidents occurred some years apart despite becoming known to the public just two months apart.
The company also said it would be implementing additional safeguards over and above its normal systems.
Have Monash IVF shares reached the bottom?
There's no doubt that a second incident will cause further reputational damage to Monash IVF shares.
At the time of writing, Monash IVF shares are changing hands for $0.55. That marks a 52-week low for the company, which has fallen 56% for the year to date and nearly 60% from its 2024 peak.
However, in a 20 May note, broker Macquarie explained the structural tailwinds behind the IVF provider. These could drive it to succeed, despite the recent debacle.
This included strong demand for the IVF industry. Grand View Research expects the Australian in vitro fertilisation market to grow at a CAGR of 7% from 2024 to 2030. Frozen Nondonor is expected to be the fastest-growing procedure type.
Macquarie also said Monash IVF would benefit from "an increase in average age of new mothers, increased male infertility, increased success rates, and increased use of donor services".
The broker also cited generic testing developments as a potential catalyst for further upside.
While it's unclear how this latest debacle will impact demand for Monash IVF, its share price has been heavily sold off. This could represent an opportunity for brave investors who believe the IVF provider can repair reputational damage.
