---Adds broker comment from Arden Partners---
Only days after a positive National Health Service (NHS) report, Deltex Medical’s (LON:DEMG) CardioQ-ODM received another endorsement.
The company said today that the National Confidential Enquiry into Patient Outcome and Death (NCEPOD) supported recommendations of CardioQ-ODM made by the National Institute of Health and Clinical Excellence (NICE) earlier this year.
This report addressed a number of deficiencies in care commonly experienced by high risk surgical patients and made recommendations to improve fluid management before, during and after surgery.
Deltex noted that it specifically called for the implementation of NICE’s medical technology guidance that recommended CardioQ-ODM in NHS patients undergoing major surgeries and for certain other surgical patients.
“NCEPOD's recommendation that the NICE guidance on CardioQ-ODM be implemented provides powerful clinical backing to the accelerated adoption of our products in the NHS,” said chief executive of Deltex Medical Ewan Phillips.
On Monday, chief executive of the NHS said he intended to instruct the organisation to implement fluid management during surgery using oesophageal Doppler monitoring (ODM) technology as a priority.
The chief executive’s review of innovation in the NHS noted that ODM is a “minimally-invasive technology” used in surgery to assess fluid status in patients.
Phillips said the NHS report “should mark the end of the market creation phase in the UK” for the CardioQ-ODM product and herald the start of the accelerated growth phase for the firm. He told Proactive Investors that this was a firm statement of intent by the NHS that they would adopt it.
He added the organization will launch “a national drive to get full implementation of ODM, or similar fluid management monitoring technology, into practice across the NHS”.
Shares in Deltex traded at 22.5 pence this morning, down 1.1 percent from Thursday’s close, giving the company a market cap of £31.3 million.
In a note to clients today City firm Arden Partners issued a ‘buy’ note on the company.
“The market’s focus has been on Deltex's transition to profitability but should now start to shift towards the longer-term growth opportunities,” said analyst Chris Thomas.
“With gross margins of over 80% on direct sales, small variances on revenues have a disproportionate impact on profitability and we believe that the combination of these two reports should result in a more rapid adoption of CardioQ-ODM by the NHS, which could quickly transform the profitability of the company.”