American beauty : strategy on track
​Deltex Medical manufactures and markets haemodynamic monitoring technologies: ODM is the only technology to measure continuously blood flow in the central circulation in real time. Randomised, controlled trials using Doppler have demonstrated that early fluid management intervention will reduce post-operative complications, reduce intensive care admissions, and reduce the length of hospital stay.
Interim results showed strong progress in the key US market. For the first time probe sales in the US, at £848k, exceeded those in the UK. That represents 39% growth in the region compared to H1 2015. Sales post-period were reported as growing at an even higher rate, giving a run rate nearing 1200 probes per month. Furthermore, signing up marquee platform accounts continues apace: in H1 the total number rose from 17 to 24 substantial hospitals, and has further risen to 27 at the time of writing.
In the UK there was little surprise that UK probe sales fell 36% from H1 2015 to £752k, albeit the company did state that performance subsequently improved in July and August (declines of c. 10%). Deltex has restructured its UK sales to best leverage the unique clinical merits of their ODM product and new TruFlow probes were launched in May to a positive reception.
Medical trials continue to be very supportive of Deltex efficacy: Spanish results in June were excellent, highlighting the significant clinical and economic benefits from ODM usage, and a similarly positive outcome came from UK trials (St Thomas Hospital) which compared ODM to competitor technology.
We are encouraged by overall momentum and expect further good news in the US (sales and platform wins) but deem it wise to see whether the slightly better summer performance in the UK is extended before changing forecasts.Therefore we also retain our fair value target of at least 8p / share.
Deltex Medical Group is engaged in the manufacture and marketing of oesophageal Doppler haemodynamic monitoring systems used in surgery and intensive care. Through its subsidiaries, Co. is engaged in the manufacture and marketing of medical devices in the United States, Spain and Germany; and the provision of employee services. Co.'s product, CardioQ-ODM enables doctors to fine-tune a patient's cardiac performance during surgery using a technique known as Doppler-guided fluid management. The CardioQ-ODM directly measures central blood flows, the indicator of potentially harmful changes in haemodynamic status that are common to all patients having surgery.
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