Deltex Medical shares up on positive interims, on track to be cash neutral in 2010

Deltex Medical Group (LON:DEMG) said sales in all key markets improved year-on-year and that progress had been made towards the goal of establishing the use of the CardioQ-ODM system as a standard of care in the management of patients undergoing major surgery.

Shares in the company rallied 7.5% on the news.

Total sales increased 12% to over £2.9 million in H1 2010, making Deltex upbeat about the remainder of the year, in which it said it would achieve cash neutrality even assuming “only modest levels” of sales growth.

UK operations were bolstered by an increased demand for probes for use during surgery. Deltex’ directors said the business was “strongly positioned” to benefit form the new policy initiatives to deliver better quality care at lower cost through the introduction of innovative evidence-based technologies, which have been backed by the new UK government.

In the US, the company’s largest single hospital account has placed a standing order worth at least US$33,000 per month and has so far been ordering at this level. Deltex stated that it has developed a number of new customer relationships with an aim of demonstrating the value of system-wide adoption of CardioQ-ODM (oesophageal Doppler monitor) in preparation for the future roll-out.

Deltex has also reported new probe orders from the second and third of the five hospitals participating in a major government led evaluation of CardioQ-ODM in Spain, while also reporting “good progress” in markets where the CardioQ-ODM products are sold through third party distributors.

“Deltex Medical approaches the remainder of 2010 with considerable confidence. Sales are growing in all our key markets, costs are under tight control and we are on track to achieve cash neutrality even assuming only modest levels of continuing sales growth,” said Chairman of Deltex Medical Group Nigel Keen.

The company added that the budget deficits in many developed health economies, which have resulted from the global recession, were likely to accelerate the system-wide adoption of its products.

Last month, Deltex announced that CardioQ-ODM would become one of the first products to be reviewed by the newly established UK Medical Technologies Advisory Committee (MTAC) after today being selected by the National Institute for Health and Clinical Excellence (NICE).

The clinical evidence submitted to NICE includes the health technology assessment on ODM published by the National Institute for Healthcare Research in January 2009 and “Doppler guided intraoperative fluid management” published by the NHS in January 2010.

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