Osprey confirms deal with GE Healthcare to cap 300pc rally in July
Health & Biotech
Health & Biotech
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Biotech company Osprey (ASX:OSP) has announced a strategic alliance with GE Healthcare, striking a four-year deal to expand its distribution platform.
The deal will see GE Healthcare become the exclusive distributor of Osprey products through its global network into Europe and other jurisdictions, including the Middle East and Africa.
It’s also the result of a six-month partnership that weathered the disruption from COVID-19, after the two sides signed a non-binding agreement to explore distribution pathways last December.
Shares in OSP jumped by another 20 per cent at the opening bell to 5.5c, before easing back in morning trade. It caps off a big month in July, which has seen the stock jump more than than 300 per cent from post-pandemic lows of around one cent.
Osprey’s core product portfolio is based around its DyeVert technology used in coronary angiograms (blood vessel x-rays). The interventional angiogram procedure can increase the risk of acute kidney injury (AKI) for patients suffering from chronic kidney disease.
To build its path to commercialisation, Osprey established clinical evidence that DyeVert reduces the amount of contrast that reaches the kidney by an average of 40 per cent, with no reduction in image quality.
DyeVert is the only device in the market that has been cleared by the US Food & Drug Administration (FDA) for safely reducing patient contrast exposure.
Speaking with Stockhead following the announcement, CEO Mike McCormick said the partnership with GE comes at the ideal time in Osprey’s growth cycle.
“We’ve been primarily a US focused company and growth has been good. Last year we booked $5.5m in revenue and did that with around 15 sales territories, all in the United States,” he said.
“So obviously GE is a huge player in the space — they’re a $17bn group just in healthcare. And within the countries they’re going to distribute in, their sales team is about seven times the size of ours. So it really gives us great opportunity to expand across Europe.
The company is expects the deal will result in topline revenue growth, and said “necessary commercial terms have been discussed and agreed”.
McCormick added that the deal is seen as value-accretive by both companies, given the similarities in their product pipeline and the six-month partnership that preceded today’s announcement.
“They’re already the world’s largest manufacturer of die thats used in these procedures, and that’s the exact field where we have a leading product that limits the dangers for high-risk patients,” he said.
“So they see enormous benefit in that, and they’ve obviously reviewed our clinical literature and seen the traction we have in the US, so they see this technology as enormously beneficial.”
McCormick said GE already has a strong distribution position in the European market, where over 60 per cent of hospital customers that use die-based imaging technology already using GE products.
“GE Healthcare are already the world’s leading manufacturer, so it’s a great introduction pathway. It’s easy for them to convoy our product as part of their portfolio, which is a perfect opportunity for a company like Osprey.”