Expect bumper sales for new superbug technology

By Author Charlie Gibson Feb 13, 2006

1

Share with
friends:

Comments (0) Print this article

Decontamination expert Bioquell (BQE, 129p) has come “scorching back into fashion”, says Steven Frazer in Shares. Clinical trials in the US have shown that its technology is effective in fighting hospital superbugs, such as MRSA, VRE and Clostridium difficile, which is “reckoned to have killed nearly 1,000 people in England and Wales a couple of years ago”.

Bioquell uses a small computer-operated machine (a little like the R2D2 robot in Star Wars) to pump hydrogen peroxide vapour into a room without leaving a residue, and is effective within just four hours, says Philip Aldrick in The Daily Telegraph.

Initially, the principal applications will be in the US, where insurance companies are increasingly reluctant to cover hospitals against superbug infections. However, Britain’s Health Protection Agency has reported that “up to a third of English NHS trusts were failing to combat effectively the problem of unsatisfactory standards of hospital cleanliness”, which has given added impetus here as well, says the FT.

And because the firm sells its technology “as an ongoing service… acting as a preventive sterilisation measure”, rather than (as its US competitors do) in response to an actual outbreak, says Frazer, the prospects for “bumper” sales are very real. Early estimates suggest a tripling of sales, from £15m to £50m, “within three to four years”, while earnings for 2006 alone are expected to more than double to 6p a share. That about halves Bioquell’s p/e from in excess of 40 to closer to 22 times.

That’s not cheap, says Aldrick, and a glance at the chart opposite shows how much the shares have gone up in the last few weeks, something that will make those with a contrarian bent nervous. “But there are few products like this, and spending to counter infection will only increase. Buy.” Shares agrees – albeit with the proviso that Bioquell is still a firm with “a few ifs and buts”, and so not really appropriate for the risk-averse.

Comments (0)

Published in Tips & advice | More articles by Charlie Gibson

Share with
friends:

Related articles

Leave a comment

This will be the name displayed with your comment.

This helps us verify comments are genuine. It will not be displayed anywhere on the site and is stored confidentially.

Please keep your comment within 1,000 characters and relevant to the main topic. We encourage healthy debate, but we don't allow insults or bad language. Anything off topic or unpleasant, we'll remove. Enjoy the conversation! Thank you.

captcha To prevent spam-related comments please enter the characters shown in the 'Captcha' box to the left.

By leaving a comment you accept our terms and conditions.


FREE - MoneyWeek's daily investment emailJohn Stepek

Our free daily email, Money Morning, is an informative and enjoyable analysis of what's going on in the markets. Written by our Editor, John Stepek, and guest contributors.
Sign up FREE to Money Morning here.

>