Shares in hospital disinfectant medical device business Nanosonics Ltd. (ASX: NAN) have lifted 3% to a record high of $2.53 this morning after the Scottish National Health Service released new guidelines supportive of the use of Nanosonics' disinfectant products.
The company sells devices for the disinfectant of ultrasound probes with some $15.5 million worth of sales in the US market for the six months ending December 31 2016. It has also now delivered consecutive quarter-on-quarter sales growth for the past four quarters after deciding to sell its products in North American markets directly rather than via wholesale distributors.
In response the share price has lifted 42% over the past year as sales momentum builds and the company's global horizons expand, with today's news from Scotland a boost to potential sales growth.
The company is also waiting on potential new guidelines from national health services in England, Wales and France, with large healthcare markets in Asia like Korea and Japan other potential targets.
For the most recent six-month period the firm posted a net loss of $3.2 million, although it has $42.6 million cash on the balance sheet to fund marketing, research and product development.
It also has a management team that can draw from the success of blue-chip medical devices businesses on the ASX like Cochlear Limited (ASX: COH) and ResMed Inc. (CHESS) (ASX: RMD).
Notably, Nanosonics' CEO is a former employee of Cochlear's Global Marketing division. While its Head of Global Marketing is a former employee of both Cochlear and ResMed, which suggests the company could follow a proven path to blue-chip success.
For growth-oriented investors willing to take on some extra risk the business ticks all the boxes except perhaps valuation, which is high given the market capitalisation around $725 million. Evidently the market is expecting strong sales growth and some blockbuster success, which is possible, but far from guaranteed at this stage in its development.
