Top member reports
Consensus community valuation
$8.58
Average Intrinsic Value
32.9%
Undervalued by
Active Member Straws
#Broker/Analyst Views:
Added 2 weeks ago

30-June-2020:  Phillip Capital: MVP: Updating our view: Accumulate (from Buy)

Recommendation: Accumulate (downgraded from Buy), Risk Rating: High, 12-month Target Price: (AUD) $7.80 (No change).

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#Penthrox Approvals
Added 2 months ago

25-May-2020:  Penthrox approved in Hungary

Medical Developments International Limited (ASX: MVP) is delighted to announce that Penthrox has been approved for sale in Hungary.  The Marketing Authorisation issued by the National Institute of Pharmacy and Nutrition (OGYÉI), is for Penthrox® to be used for emergency relief of moderate to severe pain in conscious adult patients with trauma and associated pain.

The approval in Hungary is part of a set of four countries.

Bosnia & Herzegovina were approved earlier this month, and approvals for Greece and Malta are expected soon.

Whilst both the European Decentralised Procedure and the National phase is complete, Penthrox is yet to achieve government reimbursement in Hungary.  However sales can be made to the private market immediately. 

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#Penthrox Approvals
Added 2 months ago

05-May-2020:  Penthrox approved - Netherlands and Bosnia and Herzegovina

28-Apr-2020:  Penthrox is approved in Thailand

Go the Green Whistle!   MVP perhaps not today's Most Valuable Player, but up +8.62% nonetheless.

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#Management
Added 3 months ago

The CEO, John Sharman and the Non Executive Chairman, David Williams, sold a shit tonne of shares in 2018.  A former director Allan McCallum sold at the same time.  I am unsure whether this was a way to introduce liquidity during a capital raising, or another reason... Still I don't like it.  Shares have not been sold in in other years.???

The CEO only owns 239274 shares...  David Williams, owns 14.67% of the company 9608754 or shares.

Dave Williams is in similar roles with Rate my Agent, Mobile Tyre Shop, & Polynovo. Managing Director Of Kidder Williams Capital Raisings.

John Sharman was Managing Director of CVC Ventures, Vita Life Sciences. Before then CEO at Cyclopharm.

3 other directors are also directors of Polynovo and other companies.

I have not found any reviews on Glassdoor or Seek about the culture within MVP

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#Bull Case
Last edited 3 months ago

NPAT increased 81.8% this half year and NoPAT increased 324% between 2018 and 2019.  Isn't that insane growth?

Penthrox sales increased 42%UK, Aus 18%, Europe 35% and there are more countries approving all the time.. the biggest China and the US are yet to approve but Management are ticking their boxes and once that market is cracked the share price will be justified.  

A side note to the Penthrox sales point is that it raises the libido in women (not men).  Which can only be a good thing.

Medical Developments has 3 divisions.  

Pharmaceuticals – the sale of Penthrox® .  This contributes $6652000 revenue, and is their fastest growing segment.

Medical Devices - Asthma Spacers/face masks, CPR flowmeters/masks/regulators... This contributes $4,083,000.00  revenue   

Veterinery - Flow metres/masks /regulators... This contributes $160000.00 revenue.

This half year report highlights some of the sales growth rates in its various divisions.

https://secureservercdn.net/198.71.233.13/c72.d25.myftpupload.com/wp-content/uploads/2020/02/MVP-FY20-Half-Year-Report.pdf

Another way they might create value is with their new manufacturing process (Continuous Flow), which is being developed with the CSIRO.  This lets them use smaller factories, lower costs and speeds up manufacturing when needed, slows it down when required, and produces a higher quality product, rather than the sandardised "batch" way of manufacturing.

Management are also directors in Polynovo (burns), Probiotec (pill and potion packaging for healthcare) and a bunch of other companies in healthcare, realestate, venture capital etc.  this may create possible synergies...

When I worked out their Return on Invested Capital I honestly thought "Why bother researching further" as i thought it should be huge, not negative.  Once include the huge markets yet to be tapped, the current growth rates on all of their products in all regions, and the costs that should be stripped from their balance sheets I think that their profit margins will be huge.

It does pay a dividend also... At the moment its 0.5% which is nothing to brag about....Fast forward 5 years and it could be a great dividend yeild.

 

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#Broker/Analyst Views:
Added 9 months ago

22 October 2019:  MVP - FY19 Results and Outlook:  Catalysts Approaching  from Phillip Capital's Wayne Sanderson.

  • Recommendation: Buy 
  • Risk Rating: High
  • 12-mth Target Price (AUD): $8.20 (was $6.45)
  • Share Price (AUD): $5.17 ($5.67 on 25-Oct-19)
  • 12-mth Price Range: $3.48 - $6.50
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#Broker/Analyst Views:
Added 3 months ago

02-April-2020:  Phillip Capital:  MVP:  “Penthrox soft patch – But we go with the Continuous Flow”

  • PC’s Recommendation on MVP:  Buy                           
  • Risk Rating:  High
  • Target Price:  $7.80 (down from $8.20)

Excerpts:

Summary

Medical Developments International (MVP) has 3 segments:

  • Pharmaceuticals (69% of FY19 revenue) - is engaged in the manufacture and sale of the Penthrox “green whistle” emergency pain relief device and methoxyflurane drug;
  • Medical Equipment (“Space Chambers” and other asthma / respiratory care devices)(28% of revenue);
  • Veterinary Equipment (3% of revenue). 

The two main segments are both undergoing strong international expansion. 

We forecast Penthrox sales to go from $11.9m in FY19 to $128m for the 41 approved countries to date, under a 12 year roll out scenario. Approvals to be sought in a further 50+ countries including the USA, China and Russia could take this to $240m of annual sales (not in our forecasts).

What has changed?

  • 1H20 Revenue $10.9m (v $9.8m) up 14.4%. Ebitda $1.5m (v $1.2m) up 21%. NPAT $0.2m (v $0.1m). DPS 2.0 cents (unchanged). All approximately in line with our forecasts.
  • However Medical Equipment sales +46% was 33% ahead of our forecast, but Penthrox sales +5.5% was 14% below our ~20% growth assumption.
  • CoVid-19 impact – With populations in lock down, sport and unessential activities curtailed, and traffic numbers down, we expect demand for Penthrox accident / emergency pain relief will also be reduced significantly. New country approvals and take up will also be delayed. We downgrade Penthrox sales by 36% / 35% and 17% for FY20 / 21 & 22. Respiratory devices upgraded by 18% / 18% / 18% partly offset.
  • CEO John Sharman to leave after 10 years with MVP.
  • We have increased confidence in the prospects for the new “Continuous Flow” drug manufacturing technology with CSIRO. We review this in more detail.  

Change in Estimates:

  • We have lowered revenue forecasts by -21%, -20% and -10% for FY20 /21 /22. Ebitda reduced by -42%, 37% and -27%.
  • Our updated Sum of the Parts / DCF valuation range is $5.82 to $9.83 with a mid-point of $7.82 (previously $6.39 to $10.00, mid-point $8.20). We set our 12-mth price target at $7.80 (previously $8.20), down -5%.
  • We value the US opportunity for Penthrox at A$97m or ~$1.48 per share, the China opportunity at A$58m or $0.88 per share, and Flow at $60m or $0.91 /share. 

Recommendation – 12-mth Price Target $8.20

MVP shares have fallen ~50% in the last 4 months. We still see value and a number of catalysts in 6-12 mths (US IND restart, further new country launches and Continuous Flow licence deal). Buy maintained despite the downgrade.

[click on the link at the top of this straw for more]

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