(MENAFN - ProactiveInvestors - Australia) Diversified healthcare company Allied Healthcare Group (ASX: AHZ) has won a five year contract to supply an infusion management platform to a North Queensland hospital.
Sales revenue of up to 2 million is expected across the life of the contract with Mater Health Service North Queensland.
Allied currently generates around 7 million in sales annually from its range of unique cardiology and infusion products.
Allied has the sole license to distribute Swiss-made Arcomed's technology platform in Australia. MHSNQ is the first facility to introduce the infusion platform since it became available in Australia earlier this year.
Allied reported a strong 25% increase in revenue for the September quarter relative to the corresponding quarter, indicating continued strong growth in revenue for its sales and marketing division.
Lee Rodne, Group managing director, Allied Healthcare Group said the contract was the latest in a period of strong sales growth and it validated efforts to bring the technology to Australia.
"This robust and cutting-edge device represents the latest in infusion management technology, which is designed to improve both hospital efficiency and clinical outcomes for patients by using data management to ensure patients receive the correct medication at the correct time.
This five year supply contract also signals a growing recognition of Allied as a leading provider of innovative medical products and technologies, to Australian and New Zealand hospitals and healthcare facilities."
Strong progress
Recently, Allied received early access approval of its lead regenerative tissue product CardioCel via the Authorized Prescriber Scheme in Australia.
Allied anticipates receiving full regulatory approval of CardioCel in at least one jurisdiction in 2013.
Allied's sales and marketing division are also preparing for the launch of its lead regenerative tissue product CardioCel.
The company will leverage off its experience and infrastructure to sell CardioCel into a number of countries, including Australia and New Zealand once it is approved.
Allied anticipates the global launch of CardioCel to significantly increase revenue for the company once approved.
Momentum building
Allied has a specialist sales team that has a presence across all states of Australia and in New Zealand.
It is expecting strong growth from its existing product range.
Under the guidance of managing director Lee Rodne it plans to introduce a string of new technologies that will further expand revenue from the Sales and Marketing Division in coming years, with new products coming to market.
Analysis
Over the past 12 months Allied has continued to grow as an integrated healthcare company.
It has now completed the integration from the merger of Allied Healthcare Group Limited and Allied Healthcare Group Investments Pty Limited.
During the year to June 30, 2012, Allied took a non recurring impairment of goodwill charge of 5.4 million from the merger.
During the period Allied also invested 2.37 million to increase its holding in Coridon.
Coridon is a fascinating company founded by Professor Ian Frazer and developing next generation DNA vaccines. He is well recognised for his groundbreaking research that led to Merck & Co.'s highly successful cervical cancer vaccine, Gardasil.
Coridor's current product development is currently focused on herpes virus vaccines. Coridon is currently in the pre-clinical phase of evaluating a combined prophylactic and therapeutic HSV-2 vaccine with a view to commencing a clinical studies in 2012.
Considerable progress is considerable towards commercialisation of Allied's leading product CardioCel for the repair and treatment of heart defects caused by congenital heart disease in children.
With an initial marketing approval in at least one marketing jurisdiction in the next 12 months there is potentially strong growth ahead with CardioCel.
The Allied share price has picked up since July 2012.
With momentum growing in its sales, the current share price of 0.023 appears to significantly undervalue the company given growth from CardioCel and any breakthrough from Coridon with its herpes virus vaccines.
