Motley Fool Money Stock of the Week: Nanosonics (ASX:NAN), November 24, 2021
Nov 24, 2021
Andrew Leggett, a Motley Fool analyst covering healthcare and med-tech, discusses Nanosonics and its Trophon high-level disinfection system. He explains how the device cleans ultrasound probes and why probe sterilisation matters for preventing hospital infections. Conversation covers Trophon adoption, the razor-and-blade consumables model, pandemic effects on sales, market position and competition, and regulatory and concentration risks.
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Trophon Automates Ultrasound Probe Sterilisation
- Nanosonics leads in high-level disinfection by automating ultrasound probe sterilisation with the Trophon device.
- The Trophon system cleans probes using a disinfectant process that reduces hospital-acquired infection risk and is widely adopted in major centres.
Pandemic Hurt Near-Term Sales But Boosts Long-Term Demand
- COVID initially hurt device sales as hospitals deferred non-COVID purchases despite heightened focus on disinfection.
- Leggett expects the pandemic to increase long-term demand as sterilisation standards tighten in healthcare.
Installed Base Unlocks High Margin Consumables
- Nanosonics uses a razor-and-blades model: sell devices to build an installed base, then sell high-margin consumable disinfectant per procedure.
- About 26,000 machines installed now vs a >100,000 addressable opportunity, driving repeat consumable revenue.