Australian pharmaceuticals company Medical Developments (ASX: MVP) is set to renew their international expansion targets with greater control having taken back the distribution rights from Mundipharma in both Europe and Australia for their flagship ‘green whistle’ pain reliever – Penthrox.
The decision to take back the European distribution rights to 27 countries was made in August while MVP has now confirmed they will take back control of Australian distribution too after restructuring at Mundipharma resulted in mass staff scalebacks.
“Our aim is to take an urgent and much more direct and proactive role in the commercialisation of Penthrox to capitalise on our global footprint of market authorisations. This is an exciting development and opportunity for the business,” said newly appointed CEO, Brent MacGregor.
For MVP, this will enable the company to capitalise on greater margins when distributing to wholesale users of Penthrox such as Ambulance and Defence services which are deemed “low touch” by MVP. For more active markets such as GPs and dentists, the company will look to appoint new distributors shortly for the product that provides rapid pain relief, twice as quickly as intravenous morphine.
The decision to cease their partnership with Mundipharama in Australia follows the same call made in Europe to give MVP more control over speed to market, in-market presence, pricing, margins and a direct interface with the health care professionals.
With a strong presence already in the United Kingdom and France, Pentrox was launched in Italy, the Nordics and Switzerland through FY20 where total European sales grew 15%.
Subsequently, MVP reported a 10.6% increase in revenue to $23.6m however net profit was down 63.5% to $0.37m.
Following a global search, MacGregor as CEO last month where he joins MVP after an exceptional three years in a senior role at vaccines company Seqirus which went from loss-making in 2017 to $150m EBIT by 2019.
Under McGregor’s leadership and having regained the distribution rights for Pentrox in Europe, MVP will set up a lean infrastructure with a focus on sales-drive cost management. Initial territories being targeted are Germany, Spain and The Netherlands.
Penthrox has also been given a makeover with a new inhaler design while MVP is deep in regulatory procedures to have the product approved in the United States, China and Russia where COVID-19 has stalled trials and meetings.
The United States remains the most attractive market where MVP is planning for FDA approval by 2023 while similar approvals in China are expected by 2022.
Alfred Chan is an Analyst at Emerald Financial, specialising in ASX-listed small cap companies.
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