ASX:BTC
BTC Health Ltd
Investment Summary
The fund managers believe that BTC Health Ltd is on the cusp of a transformative period following recent strategic developments. The appointment of three new strategic investors, accounting for a 15% stake, combined with the recent acquisition of exclusive distribution rights for critical medical devices, positions BTC to capitalize on emerging opportunities in the Australian market. In their opinion, BTC's recent contract to supply ECMO equipment to the Melbourne Royal Children’s Hospital marks a pivotal milestone, demonstrating its ability to win tenders for life-saving equipment. This opens doors for further contracts, given the substantial ECMO market within Australia. Additionally, the establishment of a partnership with Corcym will enhance BTC's offerings in the cardio device space, fostering opportunities for organic growth. Despite past challenges, the fund managers assert that BTC now possesses the necessary components to expand through ongoing tender success and potential mergers, thus signaling a significantly brighter future for the company.
Commentary From The Managers
Naos Asset Management
31 Mar 2025
Unknown
- BTC Health Ltd. has experienced a significant share price increase over the last 12 months.
- Naos Asset Management highlights BTC's recent contract win for critical care ECMO machines at a tier-1 hospital in Q1 FY25.
- Followed by an exclusive distribution agreement with Corcym, an Italian cardio-focused medical device manufacturer.
- Corcym's distribution program in Australia and New Zealand valued at ~$3.6 million p.a. will now be managed by BTC Cardio Pty Ltd..
- This collaboration aligns with BTC's strategy to expand its cardio division with complementary products.
- Naos Asset Management believes there are further organic growth opportunities as BTC builds relationships with key hospital decision-makers.
- The importance of executing on recent wins by providing timely and quality service to clients is emphasized.
- If BTC can maintain high service levels, the potential to in-license more devices will increase, attracting medical device manufacturers.
Naos Asset Management
30 Sept 2024
$0.07
- BTC produced the most complete result since Naos Asset Management became shareholders.
- Despite being a subscale business, BTC now appears to have the platform for significant growth.
- Group revenue increased by 5%, although the business reported a small loss at the NPAT level.
- In September, BTC secured a $5 million contract over 5 years to supply ECMO equipment to the Melbourne Royal Children’s Hospital.
- This equipment is vital for life support in critical heart or lung conditions.
- The contract includes capital equipment supply, ongoing maintenance, and essential consumables.
- This is a critical milestone for BTC, providing significant potential over the next 12-24 months.
- Credibility has been established by succeeding in public hospital tenders for life-saving equipment.
- The ECMO market in Australia is substantial, with 26 hospitals utilizing these machines.
- If BTC fulfills and exceeds this tender, it may win additional tenders within 6-24 months.
- Additional tenders could be material compared to BTC's FY24 revenue of approximately $8 million.
- ECMO machines are costly, generating recurring revenue from necessary consumables.
- A sizable fleet rollout could enhance organic revenue growth in the medium term.
- Naos Asset Management believes BTC has components in place for organic growth through further tender wins and potential accretive M&A.
Naos Asset Management
30 Sept 2023
Unknown
- Naos Asset Management has noted a significant turnaround for BTC Health Ltd after a challenging 3-year period.
- BTC welcomed three new strategic investors, collectively holding a 15% stake in the company.
- A related party has been appointed as the new Head of Finance for BTC.
- The new investors operate within the medical device space, creating opportunities for partnership and commercialization in Australia.
- Historically, BTC faced challenges in scaling through acquisitions and licensing medical products.
- The partnership provides BTC access to various medical devices with no upfront cost.
- This arrangement includes an equity ownership and a royalty agreement that converts to BTC shares.
- If BTC can successfully market these devices, it could restore confidence in management and the business.
- The recent announcements include commercial deals for exclusive rights to distribute neuro-spinal products.
- BTC also secured an exclusive sales and distribution agreement for Rhythm infusion pumps in Australia.
- These deals are considered important steps towards expanding BTC's product verticals.
Please note: The completeness, accuracy or current status of the investments referenced are not guaranteed.