PolyNovo Limited (ASX:PNV) CEO, Paul Brennan provides an update on sales of NovoSorb, clinical trials and the company's move into breast reconstruction.
Jessica Amir: Hi I’m Jessica Amir for the Finance News Network. Joining me now from PolyNovo Limited (ASX:PNV) is CEO, Paul Brennan. Paul, welcome back.
Paul Brennan: Thank you very much Jessica, good to be back.
Jessica Amir: First up for those not familiar with the company. Can you give us an introduction and tell us why you’re so unique?
Paul Brennan: PolyNovo’s unique in that we came out of the CSIRO in 2004, and we have a biodegradable polymer that is used for medical devices. That polymer is nontoxic and non harmful to the body when implanted inside. So our first product to market is actually the Biodegradable Temporising Matrix, or BTM, made of NovoSorb. So that BTM is for the regeneration of the dermis layer of your skin, whether you lose that through surgery, such as wide excision of melanomas, burns, road trauma, any large surgical reconstruction. We can now regenerate that missing dermis and you end up with a very soft, supple skin with minimal scarring.
We’ve got regulatory approvals and we’re now on market in the US, Israel, New Zealand, South Africa and Australia with more markets to come shortly. So what’s unique about us is we’re an Australian biotech that is now transitioned from an R&D company, to being truly commercial with revenue streams now coming in.
Jessica Amir: Thanks Paul. So still on revenues, what sort of revenues are you realising now, or what did you realise in FY17 and what were some of the other highlights?
Paul Brennan: Year to date, our revenues are $750,000 we reported at our AGM last week. And what we expect is to double and double again, those revenues before the end of the financial year, as a conservative estimate. So our revenue stream has two folds, there’s one from the sale of the BTM, which is $750,000 that I mentioned that is commercial. And then our funding through the US Government barter program for clinical trials, which is a reinvestment for cost of activity. Our cash burn at the moment is around $5.5 million a year, but that’ll be offset by the revenues that are coming into the company.
Jessica Amir: Can you tell us about the all-important regulatory approvals?
Paul Brennan: We have US FDA Approval, which qualify 10-K ever since 2015, which enables us to sell product in the US. We’ve also got a process, which is called a PMA (premarket approval) pathway, which is doing a clinical trial on full thickness burns and that’s being funded by BARDA. BARDA is a subgroup of effectively their Department of Health. And what they’ve been charged to do is find products in the world that could treat mass disasters quickly, for the American people. The unique attributes of our product make it highly attractive for stockpiling by the Government, and for treating mass disaster casualties. We can make a large volume quickly, it has ambient room temperature storage and it has a three-year shelf life. So it’s a very attractive product to have on hand in case there is a disaster.
For Australia, Malcolm Turnbull introduced the innovative technologies pathway through the TGA. And I’m pleased that PolyNovo is the first pilot company selected by the TGA, to go through this process. We’re hopeful of successfully navigating that new process by early 2018, which will lead to our TGA listing, which then gives a reciprocating CE Mark approval for Europe and Southeast Asia. So then we’ll be well placed in 2018/19 to address the global markets.
Jessica Amir: You’ve signed a deal to go into the breast development product market. Tell us more about that?
Paul Brennan: We’re in the process of negotiating the final stages of that contract, with a global device company. And what we’ll be doing is taking our NovoSorb polymer into the breast reconstruction market. So the breast reconstruction market is made up of two segments, there’s the breast augmentation and then breast reconstruction after surgery. In both cases when you have a breast prosthesis put in, the tissue underneath the prosthesis needs reinforcing. So we’ve developed a product that could be used to reinforce that area and regain the strength, to support that new prosthesis.
Jessica Amir: What can investors look out for over the next six to 12 months?
Paul Brennan: The next six to 12 months is really about consolidating our commercial revenues. Demonstrating to our shareholders, who have been with us since 2004, that their hopes and aspirations for the company are going to be realised. To have a wealth of revenues coming through that can lead us to being breakeven, and then go on to profitability. And also in the next 18 months at least, look at being close to release of a hernia product to service the hernia market.
Jessica Amir: Paul Brennan, thank you so much for the update.
Paul Brennan: Thank you very much Jessica.