Osteopore Ltd books improvement in gross margins as it eyes a strong pipeline of post-COVID sales opportunities
Health & Biotech
Health & Biotech
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Despite the considerable disruption COVD-19 has caused global healthcare systems, Osteopore expects revenue to gradually return to its pre-COVID levels with increased momentum as global vaccinations rise and the pandemic eases.
Osteopore Ltd announced operational results for the September quarter this morning, booking $182,871 in revenue.
Among the result highlights was a robust improvement in gross margins, which rose to 74.9% — up from 52.7% in Q3 2020.
Osteopore (ASX:OSX) also ended the quarter with more than $5.9m cash on hand, giving it the flexibility to continue its growth strategy and take advantage of the expected increased activity in elected surgeries.
Commenting on the update, OSX chief executive officer Khoon Seng Goh identified a gradual trend towards pre-pandemic business activity, and is confident that the company will resume its sales growth trajectory by Q1, 2022.
“Prior to COVID-19, Osteopore’s revenue trajectory was accelerating,” he said.
“We have seen clear signs of a gradual return to business activity in all markets in which we are active. “
“Given our investment and efforts in providing distributors with virtual training and support in the techniques required to apply our products over the past six months, we are confident that sales will recover to pre-COVID levels by the first quarter of 2022.”
The Singapore-based company highlighted in its latest report for the quarter ending September 30 that it continued working towards maintaining and improving margins.
It said a gross margin of 74.9 per cent of sales revenue was achieved in Q3, reflecting an encouraging improvement over the 52.7 per cent achieved in Q3, 2020.
Osteopore believes that its cost effective and high margin manufacturing process will ultimately become a major contributor towards the Company achieving profitability as revenue scales.
Recently appointed chairman and non-executive director Mark Leong said: “While we acknowledge that sales revenues in the third quarter are significantly below expectations, we are starting to see a global effort to manage and live with the COVID pandemic.”
“We remain cautiously optimistic about the steady return to pre-pandemic levels of activity coupled with the emergence of new potential opportunities and we will sharpen our focus to resume Osteopore’s growth path.”
The company continues to be included as an “essential service” in Singapore, allowing it to remain open and operational while executing its growth strategy.
Osteopore believes the company is well-positioned to grow sales as demand for elective surgeries increases following the decline of COVID-19 infections and reduced pressure on hospital systems globally.
It says this increased access to hospitals and surgeons is expected to drive sales in the near term, and the resumption of in-person medical trade shows, most recently at the Congress of Neurosurgery in Austin, Texas, will help Osteopore continue its engagement with healthcare decision makers.
In anticipation of growing demand, the company is working with current distribution partners to ensure its leading off-the-shelf products are stocked in hospital inventory systems in key markets.
Osteopore is also leveraging early adopters (surgeons and hospitals) to achieve product sales momentum in their territories, initiating targeted sales and marketing campaigns and ramping up training programs to ensure distribution partners are educated and supported to drive adoption and sales.
This article was developed in collaboration with Osteopore, a Stockhead advertiser at the time of publishing.
This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.