LiDCO (LON:LID), the blood flow monitoring device company, is expecting big things of its new LiDCOrapid monitor product this year.
Billed as the world’s first integrated multi-parameter monitor that allows the monitoring of high-risk surgery patients for fluids non-invasively, management regard it as “a game changer”.
Adoption of the monitor by the healthcare industry could see the disappearance of a lot of those tubes and lines that you often see patients hooked up to; the tubes and lines may look dramatic on TV medical soap operas, but “those lines can cause infection,” LiDCO chief executive Terry O’Brien told Proactive Investors.
Launched in January/February of 2012, the product has been well received and the company has “sold quite a few already,” O’Brien said.
Chief financial officer Paul Clifford chipped in to note that the company has joined a fairly exclusive band of UK medical device companies establishing a footprint in Japan – the second biggest market in the world for blood movement monitoring in the world.
LiDCO’s is only the second technology to achieve cardiac output reimbursement in Japan – essentially, a US$420 a pop financial incentive from the government to encourage use of the monitor – and, with the backing of its Japanese distribution partner, Nihon Kohden, notched up a few sales at the fag-end of 2012.
“Obviously we’ll get a full year of sales this year,” O’Brien noted.
On the subject of reimbursement, that seems to be a favoured method of medical authorities worldwide in encouraging healthcare agencies to adopt useful new technology.
LiDCO, which works on the razor manufacturs' principle of selling the razors very cheaply and making up the margin on the blades - for razors and blades, substitute monitors and high margin surgical disposable devices - saw surgical disposables revenue storm ahead by 79% in the UK in 2012, helped by NHS England providing payment incentives aimed at increasing the number of patients receiving fluid monitoring.
“We really started to see that making a difference around the November, December, January time,” O’Brien revealed.
Curiously, it is only the NHS in England that is paying these incentives; NHS Scotland and NHS Wales go their own way on these matters, but are sure to be monitoring how the English initiative is working out, and O’Brien sounded confident NHS Scotland, at least, would follow suit.
One place where things have not gone as smoothly as they might for LiDCO is the USA, its largest export territory. The group’s US distribution partner, Covidien, was not pushing LiDCO’s technology as much as the UK company wanted.
Although LiDCO is still working with Covidien on an original equipment manufacturer licensing relationship, LiDCO took the decision to reassume direct responsibility for sales of LiDCOrapid stateside, and bought back the unsold inventory.
“This caused a bit of a hiatus in the second half of the year, but will lead to stronger sales for the rest of this year,” O’Brien predicted.
Revenues for the 12 months to the end of January 2013 rose to £7.21mln from £7.12mln the year before, despite the absence this time round of £540,000 of licensing revenues received in fiscal 2011/12, and a £390,000 dip in US sales because of the aforementioned “bit of a hiatus”.
Loss before tax widened to £259,000 from £45,000 the previous year. Adjusted underlying earnings (EBITDA) were virtually unchanged at £0.60mln from £0.61mln a year earlier.