PolyNovo Faces Profit Pressure Amid FDA Prep and R&D Lab Fire

Strong Commercial Momentum Despite Challenges

PolyNovo Limited (ASX: PNV), the Australian medical technology company specialising in biodegradable wound care products, has delivered a solid first half in fiscal 2026. The group reported total revenue of A$75.0 million, a 25.2% increase on the prior corresponding period, fuelled by a 26% rise in commercial sales to A$68.2 million. The U.S. market remains a key growth engine, with sales up 25.3% to A$51.7 million, and the advanced wound care product NovoSorb MTX nearly tripling its sales to A$6.2 million.

These results underscore the growing clinical adoption of PolyNovo’s proprietary NovoSorb technology platform across multiple geographies, including North America, Europe, and Asia. The company’s synthetic dermal matrices continue to gain traction in burns, reconstructive surgery, and chronic wound care.

Profitability Impacted by One-Off Events and Strategic Investments

Despite the encouraging top-line growth, PolyNovo’s net profit after tax for the half-year plummeted to a negligible A$3,000, down 99.9% from A$3.3 million in the previous period. This sharp decline was primarily due to a temporary reduction in manufacturing output as the company prepared for a critical FDA premarket approval (PMA) filing for NovoSorb BTM in full-thickness burns. Additionally, a fire at the company’s standalone R&D laboratory in November 2025 caused an impairment charge of A$4.4 million, reflecting the write-off of damaged equipment.

Chief Executive Officer Bruce Peatey, appointed in December 2025, emphasised that these were short-term setbacks within a broader strategy to sharpen execution and scale operations. The company also completed construction of an additional manufacturing facility in Port Melbourne on time and within budget, positioning it for future growth.

Regulatory and Market Developments Signal Future Growth

PolyNovo is advancing its regulatory milestones with the FDA, targeting submission of the PMA application for NovoSorb BTM by June 2026. This approval would align the U.S. market with other regions where the product is already cleared, potentially unlocking significant commercial opportunities. Meanwhile, NovoSorb MTX has expanded its FDA clearance to include thicker matrices and new indications, with a U.S. market launch planned for late FY26.

The company is also navigating evolving reimbursement dynamics in the U.S. outpatient setting, submitting clinical evidence to support Medicare coverage and preparing for new billing codes. These efforts aim to enhance market access and accelerate adoption among healthcare providers.

Innovation Pipeline and Investor Engagement

Beyond wound care, PolyNovo continues to invest in R&D projects including hernia repair meshes under the NovoSorb SynTrel brand and reconstructive device products under NovoSorb SynTrix. Collaborations with Beta Cell Technologies on a beta cell implant for Type 1 Diabetes highlight the company’s ambition to leverage its polymer platform into new therapeutic areas.

To improve transparency and shareholder engagement, PolyNovo launched a new interactive investor hub offering real-time updates, reports, and multimedia content. This platform aims to deepen investor understanding of the company’s clinical value proposition and strategic direction.

Outlook

With strong sales momentum, a new CEO at the helm, and a manufacturing base ready to support expansion, PolyNovo enters the second half of FY26 with cautious optimism. The upcoming FDA PMA submission and evolving reimbursement landscape in the U.S. will be critical catalysts to watch.