Syringe maker sticks it out Article from: Herald Sun
John Beveridge
August 12, 2009 12:00am
FIVE years ago there were so many ASX-listed companies developing retractable safety syringes they could have supported their own index.
The ranks have since thinned dramatically, but one of the survivors, Occupational & Medical Innovations or OMI, is confident it faces a bright future.
Chief operating officer Glenn Smith said the company's big advantage was that it had a simple product that was selling at the right price point to ensure sales growth.
"We could have gone down the path of designing a syringe that was the absolute best in the world and won a few awards," said Glenn.
"The problem with that is that nobody could afford to buy it so it would never be used."
Since listing in 2000, OMI has tramped the usual troubled and potholed path so well-worn by small medical device companies in Australia.
Glenn said the combination of an efficient and motivated Chinese manufacturing plant with distribution rights in its home market and a strong US sales and marketing partner in Cardinal Health was finally ramping up sales.
Revenue has been doubling each year to reach $2.2 million last year and the company now had clear aims to turn cash flow positive and then profitable.
As the syringes become better known and marketed around the world, Glenn said the sales growth potential was very strong.
Reaction to the spring-loaded product had been very positive, particularly among healthcare workers who liked the way the needle retracted automatically and painlessly once the dose was delivered.
To stay competitive, the needles are priced around the same level as mid-range manual safety syringes, which use covers to protect against needlestick injuries.
Glenn said that meant OMI's syringes provided significant cost savings to hospitals because of the virtual eradication of expensive and dangerous needlestick injuries and to a reduction in the volume of sharps waste.
While the retractable syringe is OMI's main product, it also sells safety scalpels and is working to fill other product niches such as valves.
OMI shares closed steady at 18.
ICU Price at posting:
17.5¢ Sentiment: LT Buy Disclosure: Held
