Healthcare company, Admedus Ltd (ASX:AHZ) has grown its FY16 sales to $14.1 million, up 40% on FY15 sales.
Furthermore, the company is forecasting over 50% revenue growth in the current financial year through growing the infusion sales business, CardioCel sales growth and introducing additional products.
The recent June quarter saw the completion of a business review with key initiative now underway forecast to decrease operating expenditure in FY17 by $12 million.
During the quarter Admedus was also awarded a major 5-year supply contract within its infusion business expected to contribute to revenue this quarter.
Admedus closed the June quarter with $8.8 million in cash with $3.5 million in rebates expected in FY17.
Admedus is developing multiple revenue streams and building a global healthcare company through CardioCel heart valve patch sales, infusion product sales and its immunotherapy programs.
Admedus' flagship product is CardioCel®, a bio-engineered tissue scaffold to repair congenital heart defects, and expanding into the heart valve market.
CardioCel is becoming a surgeon-preferred biomaterial for heart valve repair surgeries.
It represents a disruptive technology in the $2.5 billion heart valve repair and replacement market, which is dominated by products commercialized by large medical device companies.
It is now being sold in Canada, Australia, Asia, the Middle East, and North Africa, covering 135 medical centres.
The Admedus infusion portfolio has over 800 customers providing hospital-wide infusion solutions across the Australian and New Zealand healthcare systems.
Beyond CardioCel and infusion sales, Admedus is developing a DNA-based therapeutic vaccine for HSV-2 and HPV.
June quarter highlights
Admedus’ FY16 sales of $14.1 million were supported by June quarter sales which rose to $4.0 million, up 13.9% from the previous quarter and 41.5% on June 2015.
During the quarter the company has undertaken an extensive strategic review and implemented significant cost cutting measures such as reducing full time employees by 30% in order to fast-track profitability.
Forecasts are that operating costs will decrease by $12 million during the FY17 compared to the FY16.
Admedus closed the period with a cash balance of $8.8 million, with a further cash receipts of $3.5 million from research and development grants expected in FY17.
The company currently anticipates entering profitability in FY18 but see potential to reduce this timeline.
The June quarter and full year sales results showed strong growth for Admedus and are an important milestone for the company reaching profitability.
The completion of the strategic review positions Admedus strongly to continue revenue growth and lower operating costs.
The stock is trading at around A$0.435, which represents a large discount to its broker price targets of A$1.95 and A$2.00.
New York based Maxim Group recently maintained their buy recommendation on the company and $2.00 price target.
The company is well capitalised with $8.8 million in the bank and research and development rebates of a further $3.5 million expected in FY17.
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