Two years ago Osprey Medical shares dropped 72 per cent in a single day after a clinical trial failed to live up to expectations.

The 2015 trial was supposed to measure three things. It proved two but the lack of the third torpedoed the stock.

The company’s share price is yet to fully recover, closing Thursday at 43c — a long way from the 84.5c it reached in 2015.

Osprey’s (ASX:OSP) technology reduces acute kidney injuries (AKI) during heart surgery by reducing the amount of toxic dye injected into patients for X-rays. About 25 per cent of heart surgery patients are vulnerable to kidney injuries.

Chief Mike McCormick says the trial was intended to demonstrate how the device reduced the amount of dye needed without affecting the image quality. It also was intended to show a reduction in the number of patients who suffered from the kidney injury ‘contrast-induced nephropathy’ (CIN).

Osprey did not achieve the latter. But it had already achieved FDA approval for its main use, reducing the amount of dye needed by around 40 per cent — for which it’s still the only option in the market today.

“I keep telling people that the most important claim is dye savings. [Preventing] AKI is great but dye savings is most important,” he told Stockhead. “Cardiologists care about dye savings tremendously.”

First-half sales growth

Mr McCormick says Osprey has had 12 consecutive quarters of sales growth — they’re averaging 52 per cent year-on-year — and have expanded the sales team to 18 people.

First half sales growth of the DyeVert and DyeVert Plus units was up 238 per cent to $US697,000 ($871,000) compared to the same period last year.

Bell Potter analyst John Hester did note that the company was unlikely to hit his estimate of sales of 12,000 in 2017, however.

The new generation DyeTect technology, which actively manages dye administration during operations, is also now on the market.

Yet the share price has remained stubbornly stuck under 50c.

Shaw & Partners analyst Darren Vincent compares Osprey to medical technology company Nanosonics (ASX:NAN), which took off at a similar period in its evolution.

Osprey’s lack of upwards trajectory may be due to a lower risk appetite among investors, he says.

And the trial results are irrelevant, he says. The aim for medical devices companies is proving they can get sales and market adoption — which Osprey is doing.

“There is little question about the future,” he told Stockhead. “The big questions have been answered. It’s fast emerging from being a speculative company.”’

Mr McCormick says institutional investors are listening.

About 80 per cent of support for an oversubscribed $32.5 million capital raising that was wrapped up last week was from institutions.

“I agree with you, our price is not the same price as it was then. Do I believe that’s a reflection that we don’t believe that investors think there’s opportunity with Osprey? No.”

Mr McCormick likewise says the Australian market “handsomely rewards” health companies that become cashflow positive — a target he says Osprey will hit by 2020, or once they reach $20-25 million in sales.

If the US medical industry continues to adopt the technology at the same rate as it currently is, and if sales continue to rise as expected, there will soon be no excuse for a still-plateauing share price.