Cyclopharm (CYC: $2.36) has seen its share price climb by 48% this month in anticipation of sales gaining traction in the US this year.
This week the company announced an agreement with Hospital Corporation of America (HCA) Healthcare which will see the deployment of its Technogas instrument at up to 169 nuclear medicine departments in the US that the group manages.
According to Cyclopharm, the agreement was prompted by HCA following several induvial agreements with its centres in the US. Cyclopharm also expects to gain traction with HCA's group purchasing organisation, HealthTrust Purchasing Group, which manages purchasing for 1,800 hospitals across the US.
At the end of last year, Cyclopharm had just 17 hospitals on board using its instrument in the US. Its target is to have a US installed base of 300 by the end of this year. The first patients were imaged with Technegas in the US in March last year. From larger sites, Cyclopharm expects to achieve revenue from consumables each year of around US$70,000.
In July the company received transitional passthrough reimbursement, which does not impact existing revenue the hospital or doctor receive. It is a classification that encourages the healthcare system to adopt new technologies.
Cyclopharm believes the market in the US is valued at US$90 million for lung imaging for pulmonary embolism detection alone. It is seeking to obtain 80% of that in the next four years, with the majority of the income expected to be from consumables sales.
Cyclopharm is capitalised at $256 million.
Bioshares recommendation: Speculative Hold Class A
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