Article published online by Stockhead , 21 August 2020
The COVID-19 pandemic left a lot of medical device companies scrambling to keep up with the unprecedented disruption. And when we caught up with Micro-X (ASX:MX1) CEO Peter Rowland earlier this week, he said the main challenge was presented by bottlenecks associated with getting the end product into customers’ hands. The medtech company’s core product is its Nano mobile x-ray unit, which was originally built and developed by Hydrix (ASX:HYD).
The x-ray’s lightweight model proved to be well suited to chaotic hospital environments. But for Rowland, the main priority was all about distribution. “I don’t think I’ve ever seen an industry transformed so quickly or fundamentally,” he said. “I imagine for the respirator industry it’s been similar but it’s just been huge, and I think the speed of that requirement was what took everyone by surprise. “All in all I think the COVID-19 response has been very good, and we’ve worked out the answer to that (demand) is to have a very high level of readiness.”
Inventory management
Prior to the pandemic, sales orders would typically come through predictable funnels where a hospital customer would express interest 90 days in advance and ask for indicative pricing. But at the height of the COVID-19 crisis, “24 hours before receiving an order we had no clue where it was coming from”, Rowland said. “Now when someone wants a batch of 10 or 20 units they want it next week, not in two months like they used to request. And most x-ray manufacturers around the world have had exactly the same experience.”
The end result of that frenetic activity was a relatively strong June quarter, as Micro-X sold $2.1m worth of Nano units to a customer base spanning Australia, Europe, the US and Asia. “I think that momentum’s continuing,” Rowland said. “If you think about it conceptually, we got a lot of orders through February, March and April and we were scrambling to produce them. “So there was sort of a lag and we had an order backlog. Now we’ve worked through that and we’re building next units for almost immediate delivery.”