MAcquarie Visit Polynovo

Some commentary from Macquarie overnight - Saying management is suggesting they will reach cash breakeven next financial year

Reconstructive and surgical wound repair.
PNV received US FDA 510(k) approval in December 2015 and launched in September 2017. PNV is marketing BTM in the US, Australia and New Zealand through its internal sales team and through distributors in South Africa. PNV reported 1H18 sales of ~A$870k.

Treatment of full thickness burns.
This indication requires a Premarket Approval (PMA) and as such, further clinical trials are required. The Biomedical Advanced Research and Development Authority (BARDA) is funding PNV’s US clinical trial for the treatment of acute full thickness burns. This is a 5-year cost-plus fee contract through to July 2021. A clinical trial for CE mark (Europe) is being conducted at sites in France and Australia. In addition to the clinical trials, PNV has submitted a ‘Conformity Assessment’ application to the Australian TGA under the innovative technologies pathway. If successful, BTM will be listed on the Australian Register of Therapeutic Goods (ARTG) and be eligible for reciprocal CE mark.​

PNV’s BTM is differentiated from its key competitor Integra’s (NASDAQ:IART) dermal regeneration template (DRT), which is manufactured from bovine collagen (compared with BTM, which is synthetic). The synthetic nature of BTM results in lower COGS and the ability to scale up production.

Management have guided to ~A$13-19mn of BTM sales for FY19 and cash flow breakeven at revenues of ~A$11-12mn. PNV’s current FDA approved production facility is able to produce ~A$100mn worth of BTM per year.