Medical Developments sets cracking pace at market debut

Medical Developments International (ASX:MVP) floated on the ASX on Monday at AUD$0.495 -- almost double its IPO placement price of $0.25.

With more than a million shares changing hands, the share price reached $0.52 before closing at $0.465.

MVP also had one of the shortest offer periods seen in Australian biotechnology -- the IPO closed oversubscribed after just two days after opening on November 24.

According to chairman David Williams, the popularity of the company is due in part to media exposure it has had for its pain-relieving device, which delivers analgesic methoxyflurane directly to patients via a distinctive green whistle, the Penthrox Inhaler. The device is widely used by paramedics and ambulance services in Australia, as well as by the Australian defence forces and extreme sporting teams for pre-hospital or emergency pain relief.

Last year, the company, which also has a business producing anaesthetic and resuscitation equipment and devices for medical and veterinary use, brought in $5.5 million in revenues, with $2.1 million in earnings before tax.

The IPO has raised $8.3 million, in addition to $3 million debt from Westpac, of which $9.5 million is being used to acquire the original business, Medical Developments Australia, founded by Dr David Komesaroff in 1972.

The remaining capital will be used by the company to obtain regulatory approval for the product overseas, and to market the product internationally.

Williams said the initial focus would be to get the product on the market in New Zealand, where registration has already been obtained. Canada and South Africa are also showing strong interest in the product, he said.

The company is also targeting defence forces around the world, which often don't require the same regulatory approval of products.