Strips torn off PolyNovo

SHARES in skin-graft biotech PolyNovo have dived more than 13 per cent after the company confirmed a delay in approval from the US Food and Drug Administration for its marquee NovoSorb product.

The biotech warned forecasting US sales would be “challenging in the near term”.

But managing director Paul Brennan (inset) said the medium-term outlook was strong.

“We continue to see surgeons using and referring Nov oS orb BTM to their peers,” Mr Brennan said.

PolyNovo was one of the ASX’s bestperforming stocks of 2020 with its share price more than doubling.

The stock slumped 44c to $2.95 on Tuesday.

Chairman David Williams said the company had “experienced a few bumps from COVID-19”.

He said December sales had exceeded budget forecasts in the US, New Zealand and Taiwan, after slower than expected sales in October and November.

Meanwhile, revenue from its partnership with the Biomedical Advanced Research and Development Authority (BARDA) was lower than expected, with the company citing a delay in FDA approval.

BARDA injected $US15m ($19.5m) into PolyNovo last July to support a trial of its synthetic dressing, NovoSorb BTM, and the product receiving FDA approval.

Outside of the US NovoSorb BTM is already approved for use on full thickness burns.

Mr Williams said the trial had been delayed, with recruitment of patients now scheduled for late in the third quarter of this financial year, and “will be reflected in increased revenue”.