Nanosonics To Benefit From FDA Review

This story features NANOSONICS LIMITED. For more info SHARE ANALYSIS: NAN

-FDA to review cleansing protocols
-Trophon proven to kill HPV
-Key use in ultrasound devices
 

By Eva Brocklehurst

Nanosonics ((NAN)) has some compelling fundamentals underpinning its product, Trophon, for the disinfection of ultrasound probes. The US Food and Drug Administration has convened an advisory committee to review the reprocessing of medical equipment and Canaccord Genuity believes the findings and recommendations will have ramifications for the monitoring and adherence to reprocessing protocols for all medical devices.

The FDA is worried about duodenoscopes, in particular, following an outbreak in both California and North Carolina of a drug-resistant superbug. The outbreak appears to have stemmed from a lack of thorough cleansing. Duodenoscopes are intricate and very hard to clean. The FDA does not regulate the practice of medicine but its guidance is considered important in the drafting of any specific regulations.

Nanosonic's hydrogen peroxide, non-nebulant technology, Trophon, does not provide a solution to the challenges of cleaning duodenoscopes. What the incident and subsequent FDA review has highlighted is the need to fully review procedures for all medical equipment. There appears to be shortcomings in procedures in reprocessing medical devices with high contamination rates because of inadequacies of the current procedures and poor adherence to the protocols.

Of most significance for Nanosonics are results from a study presented to the Society for Healthcare Epidemiology of America which showed Trophon was the only high-level disinfection system that has been proven to kill human papilloma virus. HPV is one of the most common sexually transmitted infections and ultrasound is a key imaging tool used by obstetricians and gynaecologists. High risk strains of HPV are responsible for nearly all cases of cervical cancer and are the leading cause of several other cancers. Standard chemical disinfectants are unable to destroy the virus.

Why is Nanosonics set to benefit? Trophon provides a simple, automated and effective solutions for the reprocessing of ultrasound transducers. The broker believes the data may help drive adoption of Trophon by clinics. Trophon is fully automated, self-contained system and there is little operator involvement in the disinfection process. The product provides a clear audit trail with each disinfection electronically recorded. Alternative methods of cleaning ultrasound probes are via soaking in liquid disinfectants, which is labour intensive and, if done properly, can take up to 25 minutes.

The broker points to several recent publications, which have highlighted sub-optimal practices in relation to the use of intra-cavity ultrasound transducers (ICUTs). Most sterilisation procedures for critical devices involve high temperatures and are not suitable for equipment such as ICUTs. Hence they are classified as semi-critical devices that, if not able to be sterilised, must be disinfected at a high level.

Canaccord Genuity maintains a Buy rating for Nanosonics and a $2.20 price target.
 

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