Shares in Perth-based Eastland Medical Systems Ltd have climbed over 12 per cent today after announcing it had concluded a supply contract and received its first substantial export order for 5 million ClipOn "Safe" needle devices.
Shares in Perth-based developer and manufacturer of injection, infusion and blood-drawing devices, Eastland Medical Systems Ltd, have climbed over 12 per cent today after announcing it had concluded a supply contract and received its first substantial export order for 5 million ClipOn "Safe" needle devices.
The company said the contract order took place following the recent visit to Australia by two senior executives from UK based Response Medical Equipment Ltd, a 100 per cent owned subsidiary of International Medical Devices Plc, to inspect Eastland's manufacturing facility and Australian operations.
The company said ClipOn was a "safe" hypodermic needle designed to replace standard Luer needles on syringes, making it more cost effective and functional than other current safe retractable syringes.
Eastland said it was initially targeting the 3ml and 5ml syringe markets for ClipOn with the segment representing more than 60 per cent of the total market for hypodermic needles.
Earlier this month, the company announced it would acquire 100 per cent of Westcoast Surgical & Medical Supplies.
The purchase, through its subsidiary Eastland Medical (WA) Pty Ltd, includes a payment of $850,000 in cash together with the issue of 5.67 million of fully paid ordinary shares in Eastland at 15 cents per share. There is a deferred payment of $504,000, based upon performance of the business, which will be paid in three annual amounts of $168,000 by the issue of Eastland shares.
Westcoast is a medical products distributor in WA and Eastland expected it to continue its rate of year-on-year growth at 20 per cent on current turnover of approximately $4.5 million, operating from its purpose-built facility in Canning Vale.
At market close, shares in Eastland were up 1.5 cents to 13.5 cents.
Below is the full announcement:
Eastland Medical Systems Ltd (Eastland) have concluded a supply contract and received their first substantial export order for 5.0 Million ClipOn "Safe" needle devices.
Following the recent visit to Australia by two Senior Executives from the U.K. based Response Medical Equipment Ltd (Response), a 100% wholly owned subsidiary of International Medical Devices Plc, to inspect Eastland's@ high tech component manufacturing facility and Eastland's Australian operations, Response proceeded to place a contract order for the entire annual production of Eastland's pilot plant.
ClipOn is a "safe" hypodermic needle designed to replace standard Luer needles on syringes, making it more cost effective and functional than other current safe retractable syringes.
Eastland is initially targeting the 3ml and 5ml syringe markets for ClipOn and this segment represents more than 60% of the total market for hypodermic needles.
As a consequence of further discussions on supply of ClipOn for the European and South African markets, Eastland has revised their South African project by increasing the capacity of the proposed production facility from 50.0 Million units to 100.0 Million units annually. With the introduction of mass production and automated assembly lines, Eastland is confident that their ClipOn "Safe" needle will be the most competitive product in the world safe needle market while retaining industry standard profit margins.
Mr Don O'Sullivan, Eastland's CEO said, "The commissioning of the Pilot plant has proven up the mass production systems and allows Eastland to implement it's key facility in South Africa with state of the art production that will reduce the cost of the product to levels we did not expect.
Eastland are confident of securing a major share of the world market for safe needles and inquiry for ClipOn "Safe" needle from overseas is now placing production pressure on the company. As a result of the 5.0 Ml order we now have no product available for the Australian and Asian markets until our next stage of production commences later this year. Eastland intends to proceed with its regularity approvals for Clip-On. Based on current inquiry for ClipOn from overseas, it appears that the production capacity of the proposed South African facility will be fully committed by the time the facility is commissioned.
