Diagnostic imaging is one of the fastest growing segments of the medical industry, but professionals in the field are worried about a dwindling supply of certain contact agents.
This is where Voyageur Pharmaceuticals (TSXV:VM) is set to stand out from other healthcare stocks. Not only does the team have access to a rich source the industry needs, it has the means to extend its reach beyond Canadian borders.
The Calgary-based healthcare company has marked a significant milestone by signing its first international distribution agreement, accompanied by a C$2.6 million sales commitment over the initial three years of commercialization. This agreement, made with a company specializing in the sale of radiology products in Latin America, grants the distributor marketing and sales rights for SmoothX 2% in two countries.
Voyageur Pharmaceuticals: An overview
Voyageur Pharmaceuticals is an innovative healthcare company focused on the development and commercialization of radiology products. Leveraging its wholly owned barite quarry, the company ensures high-quality production of barium sulfate contrast agents, which are essential for medical imaging, particularly in computed tomography (CT) scans.
SmoothX 2%: A game-changer in CT imaging
SmoothX 2%, a flagship product of Voyageur Pharmaceuticals, is a contrast medium (used to increase the contrast of structures or fluids within the body in medical imaging) designed for use in CT imaging of the gastrointestinal tract. Barium sulfate, the active ingredient in SmoothX 2%, is crucial for providing high-quality imaging with reproducible results, which are vital for accurate diagnosis and image comparison. Clinical tests have shown that most patients prefer the taste of SmoothX over the current products used in CT imaging, highlighting its potential to become a preferred choice in medical imaging.
Strategic objectives and vertical integration
Voyageur’s main objective is to launch its line of barium contrast drugs, utilizing barium sourced from its barite quarry. This vertical integration strategy not only ensures quality control and supply chain efficiency, but it also lays the foundation for a robust product line. The company aims to reach revenue exceeding C$65 million from barium contrast media sales.
Building on this strategy, Voyageur plans to expand into iodine production by extracting iodine from iodine-rich brine fields in the United States. This move demonstrates the company’s commitment to diversification and innovation, aiming for revenues from iodine contrast media to exceed $200 million. This expansion will further solidify Voyageur’s position in the competitive medical imaging market.
Recent developments and international expansion
The recent distribution agreement is a significant step for Voyageur Pharmaceuticals, marking the beginning of its international expansion. The Latin American distributor will handle the costs and responsibilities for product regulatory approvals and commercialization, enabling Voyageur to launch SmoothX in the region. This event sets the stage for the rollout of Voyageur’s complete range of barium sulfate contrast medium products for medical imaging.
In an exclusive interview with The Market Online, the company’s chief executive, Brent Willis, called this move “very strategic.”
“With our sales, we now have the data to prove feasibility and move [our Francs Creek] Project forward. It is a big step forward; we have multiple pending contracts in other countries that we are moving forward, as well,” Willis said.
Click the video below to watch the full interview.
Confidential contract details and market strategy
Given the highly competitive and monopolized nature of the barium contrast industry, further details of the contract remain confidential. The estimated contract value is based on management’s sales volume expectations over the contract term. Voyageur’s strategy involves introducing its barium contrast media product line and systematically expanding to offer a full suite of imaging products, aiming to diversify the medical imaging market in Canada and internationally.
Market analysis
The global radiology contrast drug market is valued at US$6.2 billion and is expected to grow at a compound annual growth rate (CAGR) of 7.28 per cent, reaching US$12.5 billion in 10 years, according to Markets and Markets data. Iodine contrast injectables represent a significant US$4.2 billion share, while the barium contrast market is valued at US$600 million. Currently dominated by Chinese production, Voyageur Pharmaceuticals aims to capture 8 per cent of the barium market within three years, generating US$60 million annually from barium contrast products. Over the next five years, the company targets total sales to exceed US$200 million annually for barium and iodine contrast media, representing a 6.6 per cent share of the global market.
Future prospects and innovation
Voyageur is also advancing its fullerene drug development program to create new, safer, and higher-performing advanced contrast agents. These agents have the potential to displace current X-ray, CT, and MRI drugs within the global market. With projections indicating that the contrast media market is set to double over the next decade, Voyageur’s strategic initiatives are well-positioned to address critical industry challenges concerning contrast agent availability.
Investment corner
Investors are encouraged to follow Voyageur Pharmaceuticals at voyageurpharmaceuticals.ca to stay updated on the company’s progress and developments. With its strategic initiatives and innovative products, Voyageur Pharmaceuticals is poised to make significant strides in the global radiology contrast drug market.
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(Top photo: Voyageur Pharmaceuticals Ltd.)