PolyNovo Share Price in Reverse upon New Funding (ASX:PNV)
Shares in Melbourne-based medtech company Polynovo Ltd [ASX:PNV] have slid for a fifth consecutive day.
Today’s dip in the PNV share price comes on the back of new funding for clinical trials of its proprietary NovoSorb regeneration solution.
Shares in the medtech giant are trading lower at the time of writing, dropping 0.86% or two cents, to trade at $2.32 per share.
The ASX health care sector is down 104.5 points or 0.3%, while the broader ASX 200 is also down 0.32%.
New funding not bad news
The PNV share price appears as if it is being pulled down with others on ASX’s health care sector.
However, today’s announcement is a relatively positive one.
PNV has secured US$15 million from Biomedical Advanced Research and Development Authority (BARDA) to support the clinical trial program of NovoSorb BTM.
BARDA is part of the US Department of Health and Human Services.
The trial is intended to gather data on the effectiveness of NovoSorb BTM in the treatment of full thickness burns.
PolyNovo said it would make a modest co-funding and ‘in kind’ contribution to the trial with the final budget to be announced after US FDA approval.
Should the trials be a success, we could see a similar reaction in share price like we did in April.
Record US sales
Last Friday PNV announced June 2020 was a new record sales month in the US.
Since April, the company has opened seven new hospital accounts in the country.
Throughout FY2020 there has been a 67% increase in hospital accounts in the US.
PNV said they have had success opening new accounts and achieving record sales, despite the impacts of COVID-19.
Sales have also been ticking upwards in Europe and have just commenced in the UK.
PNV echoed its previous guidance that product sales for FY20 are likely to at least double FY19.
With sales in the June quarter up 33% from the March quarter in FY20.
So, why the fall in share price?
PNV has had an incredible run up in over the past five years, passing the $3 mark just before the crash in March.
Since starting out as a speculative microcap stock, PNV now has a market cap of $1.55 billion.
The thing with larger-capped stocks is they tend to move with the market, more than their smaller-capped peers.
Which could explain the slump in share price despite the encouraging news.
However, continued successful trials in the US could help the share price edge higher.
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For Money Morning