Recorded 27-Jan-2021:  LivewireMarkets.com: Buy Hold Sell: The 5 most-tipped small caps

PNV is the first small cap cab off the rank on this BHS episode from LivewireMarkets.  Market Matters' James Gerrish and Tribeca Investment Partners' Jun Bei Liu both rate PNV as a "Sell".

Polynovo (ASX:PNV)

Bella Kidman: Jun Bei, I'll start with you. Polynovo - they develop and manufacture technology for skin graphs. Buy Hold or sell?

Jun Bei Liu (Sell): It's a sell for me because I'd much rather be in a different business, it’s very similar, it's called Aroa, and it is a very similar business, but trading at a fraction of the multiple. Now, Polynovo is a great market leader, it's innovated the market, it's expanded the market, but more recently it has disappointed the market in terms of the impact from COVID-related shut down in the hospital system and the like, and potentially it will come through. But it is trading on a very, very expensive multiple. And on that basis, I just think you'll get much better return coming out of buying Aroa, which is a very similar business coming out of New Zealand and just reported today, great numbers. Of course at the same time, they're all being impacted by the same COVID impact. So it’s very leveraged to the second half and the earnings coming through quite quickly. It’s innovated its business and actually has a very, very good clinical study to support the efficacy of its product, Aroa itself. So yes, on this basis, I think much rather to be in the up and coming market leader than the incumbent one that's trading on much higher multiple.

Bella Kidman: James, Polynovo was up 107% in 2020. It hasn't really kicked the year off the same way. Buy, hold, or sell?

James Gerrish (Sell): Yes, I've got a sell on it. Really expensive stock that has missed in terms of their outlook. I think that's a really key thing for investors to monitor. If something is priced for perfection and it doesn't deliver it, I think it'll be under a fair amount of pressure going forward. They're super high beta stocks. We don't trade a lot in the biotech space, simply because they're really high beta we’re a high conviction portfolio. So it's really hard to put a really decent market weight into, or a decent portfolio weight I should say, into a stock that's so uncertain and non-predictable in the short term and has such big swings in share price.

--- Other stocks covered include Lynas Rare Earths (LYC), Pointsbet Holdings (PBH), EML Payments (EML), Zip Co (Z1P) and Nearmap (NEA).

[I do have a small position in PNV, and they are also on my Strawman.com scorecard.]

07-Sep-2020:  Victorian Government Grant for Hernia Plant

PolyNovo is pleased to announce it has received a grant from the Victorian Government, Department of Jobs, Innovation and Trade for up to $252,000. This funding is to support the purchase of equipment and the development of the hernia cleanroom which is in progress at our Port Melbourne facility. The hernia facility will manufacture our NovoSorb Syntrel hernia product.

Managing Director, Paul Brennan said, “We are grateful to the Victorian Government for their support of PolyNovo’s investment in local manufacturing capacity. This plant will produce a product that will change the way hernias are managed world-wide. It is a matter of pride that these products will be manufactured in Port Melbourne using Australian technology.”

This announcement has been authorised by PolyNovo Secretary Jan-Marcel Gielen.

Correction: Page 9 of the FY20 results presentation released to the ASX on the 26th August 2020 should read BTM product sales for the 2H FY20 are up 87.5% on the 2H FY19.

About NovoSorb®

NovoSorb® is a novel range of bio-resorbable polymers that can be produced in many formats including, film, fibre, foam, and coatings. NovoSorb’s unique properties provide excellent biocompatibility, control over physical properties, and programmable bio-resorption profile.  NovoSorb® BTM is a dermal scaffold for the regeneration of the dermis when lost through extensive surgery or burn.

About PolyNovo®

PolyNovo is an Australian-based medical device company that designs, develops and manufactures dermal regeneration solutions (NovoSorb® BTM) using its patented NovoSorb® biodegradable polymer technology. Our development program covers Breast Sling, Hernia, and Orthopaedic applications. For further information and market presentations see www.polynovo.com

10-July-2020:  Trading Update

Also:  Pivotal Trial Protocol - Update

Trading Update:

• Record US Sales in June
• First Sales in UK
• FY20 Sales Guidance

US

June 2020 was a new record sales month in the US. Since the record sales month announced on 7 April the company has opened 7 new hospital accounts. From July 2019 to 30 June 2020 there has been a 67% increase in hospital account in the US. Despite the adverse impact of COVID on many businesses, Polynovo has had success opening new accounts and achieving record sales. To achieve this, the company is using a number of tools to support surgeons where face to face meetings are not possible.

UK

The company is pleased to announce its first sale in the UK. There have been six operations in England and Scotland and for this reason we expect additional new term sales.

EU

There have been numerous applications of the BTM in the DACH countries (Germany, Austria and Switzerland) and sales are growing accordingly as we gain traction across the region.

TRADING UPDATE

The company repeats earlier guidance that product sales for FY20 are likely to at least double FY19.

Sales for the June quarter were 33% greater than the March quarter, but this includes a record US result for June.

Managing Director, Paul Brennan said, “These sales results for NovoSorb BTM are very strong given the difficulties faced with CoVid19. Our teams have maintained their engagement with customers, and we continue to see sales growth.”

Chairman, David Williams said, “Sales are still lumpy but there is a strong upward trajectory as surgeons embrace our product and the patient results it gives. While FY20 sales will show impressive growth over FY19, the sales run-rate is more impressive and should be a better indicator of the near-term future.”

05-May-2020:  PolyNovo presents at Macquarie - presentation slides

That link is to the 28 page presentation to be given by Paul Brennan at the Macquarie small and mid-cap virtual investor forum today, Tuesday 5 May, 2020.

23-Apr-2020:  First BTM use in Canada

PolyNovo is pleased to announce the first use of NovoSorb BTM in Canada. This case was initiated by one of Canada’s leading surgeons who is a key opinion leader in this field. 
 
PolyNovo has not yet applied for regulatory clearance in Canada as the country has some unique requirements compared with the US, Australian and European regulatory processes. PolyNovo is working towards a Canadian regulatory filing in CY2021. 
 
Product for this first case was supplied under an exemption scheme made on an individual case by case application.  Health Canada’s Special Access Program (SAP) allows doctors to gain access to medical devices that have not yet been approved for sale in Canada. Special Access is requested in emergency use cases or when conventional therapies have failed, are unavailable or are unsuitable to treat a patient. All medical devices that have not been approved for use in Canada, require special access authorization prior to being imported and/or sold in Canada. 
 
This first case was a child with extensive burns. PolyNovo is very pleased we could assist in the care of this child and from all reports the child progressing well. The  PolyNovo family is proud to be able to improve the outcome for all patients but particularly when a child is involved. 
 
PolyNovo’s CEO, Mr Paul Brennan said “Our US team have worked closely with the Canadian surgeon and the hospital to get NovoSorb BTM into Canada for urgent use last week and over the weekend. Canada is a very important market for us in the near term and seeing demand for our product in advance of market entry is a reflection of the strength of the global key opinion leader network and the high regard for NovoSorb BTM.”