Backed by many of the world’s best biotech scientists, entrepreneurs and university graduates, alongside a significant backlog of elective procedures after the pandemic, the US has all the ingredients for a booming healthcare sector.

However somewhat surprisingly, several ground-breaking medical device stocks have lagged the broader market this year, despite delivering strong growth and signing numerous flagship contracts with blue chip partners.

Take Belluscura (BELL), a developer of next generation portable oxygen concentrators (POCs) that are used to treat patients with CPOD & acute respiratory conditions, as a case in point. 

After proving clinical efficacy and obtaining FDA approval, the firm has since educated the industry, obtained US insurance cover, set up robust supply chains, promoted its products, and raised fresh capital to fund the business until it becomes cashflow positive in 2025.

Additionally, today it's announced that it had signed up another major American partner, this time McKesson Medical-Surgical (US: MCK), a $54bn market cap subsidiary of world's largest drug distributor. This deal will enable Belluscura’s X-PLOR POC to be sold to McKesson's customers via their online catalogue.

I would hope that assuming things go to plan, then McKesson would also be very interested in taking Belluscura's revolutionary new DISCOV-R device, which is scheduled for full commercial launch in Q3'23, weighs 50% less than comparable dual flow POCs, produces nearly 3 times the oxygen by weight, and won the prestigious Silver Award in the Best New Product category at the Medtrade conference earlier this year.

VP of Global Sales Bob Fary commented: “We continue to expand the distribution of the X-PLOR throughout the US, and this exciting agreement will extend our reach to patients seeking access to best-in-class devices."

CEO Bob Rauker, added: "We are very pleased that McKesson, one of the largest distributors of pharmaceuticals and medical devices in North America, has chosen the X-PLOR to be offered through their catalogue. This significant distribution agreement will mean that more Americans can purchase our devices throughout the country, broadening our product distribution and making supplemental oxygen more easily accessible."

In terms of the numbers, the shares appear to be materially undervalued, too, trading at 35p versus Dowgate Wealth’s 100p a share target price. Dowgate's target price is predicated on unit sales of 6,250 (which would deliver revenues $7.5m), 20,000 ($28.8m), and 40,000 ($62.8m), respectively, between 2023-25, and Belluscura closing December 2023 with net funds of +$2.3m (versus $2.0m last year).

Time to be patient.