A look at the healthcare stock: ASX: NAN

Nanosonics Limited (ASX:NAN), established in 2000 and based out of Lane Cove in Australia, is engaged in designing and developing decontamination products to minimise the spread of infection. The company holds intellectual property rights over a special disinfection and sterilization technology that can be utilised in several markets. Yet, the initial market applications are designed for the reprocessing of reusable medical instruments. Nanosonics operates worldwide across Australia, North America, Europe, and the Asia Pacific.

The company’s market cap stands at AUD 1.32 billion to date, with ~ 299.96 million outstanding shares. On 12 April 2019, the NAN stock price closed the market session at AUD 4.530, that is very close to the 52-week high of AUD 4.580, with ~ 1.19 million shares traded. The stock’s return yield has been consistently positive over the last year period with minor fluctuations.

Investors may keep a close eye, since the NAN stock price has been on an uptrend since the onset of 2019 and has also generated a positive YTD return of 58.63% so far.

On April 3rd, 2019, the company informed that the French Ministry of Health had released updated guidance for the appropriate disinfection of endocavitary ultrasound probes, developed by a multidisciplinary group of experts, led by the President of the SF2H (French Society of Hospital Hygiene).

The Ministry of Health quoted, “It is now up to healthcare professionals and institutions to take ownership of these data sheets, implement them, and adapt their internal risk management policy accordingly to guarantee the highest level of patient protection.”

The recommendations included a systematic review of the existing guidelines from the UK, Switzerland, ECMUS, ESR, WFUMB, Australia and the US, in addition to published literature. They exhibit a deviation from the prior Ministry of Health statements and now require that endocavitary ultrasound probes undergo intermediate level disinfection even if a sheath is used. The recommendations also elaborate on the benefits of automated disinfection as being standardized, reproducible, traceable and time-efficient.

On February 12th, 2019, Nanosonics announced the results of a Japanese study demonstrating significant ultrasound probe contamination, which will be presented at the Japanese Society of Obstetrics and Gynecology, in Nagoya in April 2019 and has been submitted for publication in the Japanese Journal of Medical Ultrasonics. As per the inferences, over 90% of probes were found to be contaminated at both site A (a university hospital) and site B (a clinic). The results were consistent with similar studies conducted in other countries.

According to the financial results for the half-year ended on December 31st, 2018, Nanosonics recorded sales revenue of $ 40.7 million, up 36% on the prior corresponding period and 33% on the preceding half. During the period, trophon®2 was launched in Europe, Australia, as well as North America and received a positive customer response.

Besides, the company’s operating profit before tax improved by 195% to $ 11.0 million, as compared to the prior corresponding period and 493% relative to the preceding half. The company closed the half-year with cash and cash equivalents of around $71.26 million that would support active growth and expansion.

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