Medical Developments International Limited (MVP) Earnings Call Transcript & Summary

Thank you very much, and welcome, everyone, to the webex this morning. I'm joined by Anita James, who will say a few words shortly. But as you're probably aware, we announced an important leadership change at Medical Developments this morning via the ASX. And the news is that Brent MacGregor, who has been CEO of Medical Developments for the past 6 years, has decided to return to North America, where his family is based. And that move will take place effective immediately, although Brent will be available in an advisory capacity until mid-November to ensure an orderly handover. The Board has decided to appoint Anita James in an interim role as interim CEO. Previously, Anita was the CFO for Medical Developments, having done that role for just over 4 years. So we believe the company is in very safe hands with Anita. She knows the business very well. No doubt you're familiar with her from previous webinars. And I look forward to working with Anita as we search for a permanent CEO going forward. You would have also seen our quarterly results, which were also released today. And we are very encouraged by the overall performance of the business. We are focusing on 3 areas. The first is continued performance of our existing business, both in Australia and with our international partners. You'll be aware that we achieved a pediatric label approval across Europe, which was finalized just some months ago. This plus the recently published health economic data, which shows a real benefit for Penthrox in terms of overall cost savings in the emergency department, is also being executed in Australia and of relevance to our international partners. And we have also committed to working more closely with our existing partners to grow the business. Secondly, we are looking to further expand the geographic footprint of Penthrox with a particular focus on Europe and some of the larger markets there. You will also have seen that we have changed partners for our Middle East and North Africa business to the company Labatec, who also manages Penthrox on our behalf in Switzerland. And we're also investigating other non-European, i.e., rest of world partnership opportunities. The third area that we're focusing on is operational efficiency, good cost management. But overall, we're very happy with the direction and performance the company is undertaking at the moment. And we see this leadership transition as not being of concern, particularly in Anita's hands. The strategic direction of the company remains unchanged, and we believe we're in a very good position for future growth of the company going forward. So with those words, I will hand to Anita, congratulations, Anita, to say a few words.

Thank you, Mark, and thank you for those kind words. I'm feeling very privileged and honored for the opportunity to step in as Interim CEO. It does come at a really good time in the company's journey. Those that have followed the story, obviously, the last couple of years have been quite a journey of rebuild and stabilization of the business. And internally, we feel really proud about where the business is at. Our FY '26 results, I think, really demonstrated the fruits of a lot of that hard work, both from a financial perspective with the balance sheet in really good shape, achieving profitability in FY '26, but more importantly, from a strategic sense. And Mark touched on some of those things to reach those strategic milestones, particularly the pediatric label and the health economic publication in FY '26 was incredibly pleasing. And we've got a good runway of initiatives to continue that journey through FY '27. So I think Brent has obviously been part of that journey. I know he feels incredibly proud of having achieved what we did in FY '26, and I think with that as a backdrop, it certainly was an appropriate time for him to step down at this point. So, yes, I'm looking forward to the year ahead and feeling quite excited about what the company can do.

Good. Yes. My thanks as well on behalf of the Board to Brent for his service to the company over 6 years. As Anita has said, particularly the last couple of years, the performance of the business has really turned around. A lot of effort to do that. And thank you, Brent, and all the best for your time back with your family in North America. So with that, I think we'll hand over to the Q&A session. So Anita, what do we do now? Okay. I think our moderator will now provide instructions. Thank you.

[Operator Instructions] Your first question today comes from [ Marie Hewitt ]. This reads, Mark and Anita, can you please confirm if Anita is a potential candidate for permanent CEO role?

Very good question. We will be considering both internal and external candidates in the search for a CEO. So absolutely, Anita will be considered.

[Operator Instructions] Your next question comes from Jason Phillips. This reads, can you please explain how the significant in-market growth in Penthrox Europe is converting to revenue? Is there a lag, i.e., European partners working through inventory?

Yes, that's a great question. Not so much this year. You will recall last year we had the big inventory build. So we've got stocks where they should be at right now. I think what you're thinking really is when we look at it year-on-year, we will still have that quite significant PCP that we're cycling, which will be a tough comp. But now -- from our perspective now, FY '27 should be a reasonably clear year in terms of end market demand being more closely aligned to sales volume.

And if I can just add, I was actually at a meeting in Europe last week with -- and met with some of the partners there who are really encouraged about the opportunities for Penthrox, particularly with the pediatric label being recently added. So I think that certainly explains some of the very strong performance in market demand performance in Europe, which we hope will flow-through once the pipeline fill issues work their way through the system.

The next question comes from Paul Higgins. This reads, why only a 1-month transition when usual fee is 6 months? Is Brent being paid for the 6 months?

So I'm not exactly sure what we communicated to the market, but we have some obligations from Brent's payment, which, kind of, meet the ASIC requirements from a termination perspective. So no, he's not being paid for a 6-month notice period. He has received a termination payment.

And look, I'll just add to that. It's -- I think we are at a good place from a leadership team point of view. Brent certainly has expressed a want to get back home to his family. And certainly, the Board and the leadership team are really supportive of that. He's available if needed. His termination arrangements are detailed in the Rem Report for anybody that wants to look at what his termination benefits are. And I think it's probably easiest for the organization to move forward for Brent to be available if needed. But otherwise, the rest of us, sort of, roll our sleeves up and get the job done.

Yes. From experience over many years, these kind of transitions are best being done fairly quickly. And the handover has largely been done and any remaining handover can be done in the coming weeks. So I think it's a sensible position to make that change as of today. So Anita now takes full responsibility for the company.

Next question comes from Stephen Agnew. This reads, how will your strategy into the new markets differ or align with current market strategy into U.K., France, et cetera?