Medical Developments International Limited (ASX: MVP) is an ASX listed healthcare company providing emergency medical solutions. The company is a leader in emergency pain relief and respiratory products. MVP has developed its proprietary fast-acting trauma & emergency pain relief product, Penthrox®. It is approved in over forty countries, and the company is expanding globally and also manufactures a wide range of Asthma respiratory devices.
On 3rd June 2019, the company announced that it has entered an agreement with Mundipharma Pty Ltd for the exclusive distribution rights of Penthrox® in Australia. Under the agreement, Mundipharma will use its sales channel, and marketing legacy and MVP will maintain relationships within the key ambulance channel and support Mundipharma with its marketing initiatives. The agreement should help the company maintain minimum volumes and guarantee current turnover in Australia, and a significant upside forecast.
Key personnel’s statement
Jane Orr, Managing Director of Mundipharma Australia and New Zealand, highlighted that the pain relief options are limited in clinical settings, hence they are happy to address this important clinical need.
Mr David Williams, Chairman of MVP, acknowledged valuable expertise of Mundipharma Australia in pain management products. Further, he believes that this partnership will increase access for clinicians and patients across Australia and also has some other benefit, like showing international distributors the potential of a strong sales force.
On the daily chart, the stock is trading in a wide range of A$5.71 (red line) – A$4.76 (green line). From the last two month (April and May 2019) the stock is bouncing off from the upper line (resistance) and lower line (support).
The challenge within a trading range is that the stock keeps on knocking up and down and no clear trend is visible until the breach of one side of the range. Currently, the stock doesn’t seem to be going anywhere as the range itself is big for the stock to move freely.
However, an important aspect to be noted here is the volume action during the consolidation. As seen in the volume chart, during the consolidation, the volume is consistently dropping by the day. This is indicating a lower participation by the market players.
Daily chart of MVP (Source: Thomson Reuters)
A stock consolidating in a range with losing volume means the stock may show even less movement going forward due to lower participation and hence may stay in the range for long.
Currently, the stock is moving in a range and volume is also drying, so the chartist would eagerly wait for volume to pick up in the coming days.
The company has a market capitalisation of A$344.62 million, and the stock had touched a 52-week high and low of A$6.17 and A$3.48, respectively. The stock made an intraday high of A$5.30 closed the session at A$5.30, as on 4th June 2019. The last one-year return of the stock is negative 10.09%, and the YTD return stands at 23.47%.