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Sars tonic for F&P Healthcare

By Jock Anderson

Friday 2nd May 2003

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Demand by Sars-besieged Asian hospitals for Fisher & Paykel Healthcare's leading-edge respiratory products signals good news for investors.

But if some alarming website predictions are correct the company could be hardpressed to keep up with demand.

Fisher & Paykel Healthcare chief executive officer and managing director Michael Daniell said the company was dealing with several inquiries from Asian hospitals ­ particularly Chinese ­ following the rapidly spreading severe acute respiratory syndrome (Sars) outbreak.

F&P Healthcare is a leading designer, manufacturer and marketer of heated humidification products and systems for use in respiratory care.

"Clearly our humidifiers and breathing circuits are being used to help people who have Sars and who end up in intensive care," Mr Daniell said.

"We have begun to see signs of hospitals in Asia buying extra equipment to ensure they are well set up should they need to treat these people," he said.

Mr Daniell said that while Chinese hospitals were adding to their equipment because of Sars the business was so far small in relation to F&P Healthcare's overall business.

The company's products are used in about 90 countries and it is estimated they are involved in the treatment of several million people each year.

Mr Daniell said earlier this week that of about 5000 people worldwide so far known to be infected by Sars about 10% ended up in hospital and 300-400 were possibly in intensive care.

An American Sars statistics website relying on World Health Organisation data,has predicted that, unchecked, there could be 100,000 cases worldwide by early August, a million cases by late October and 10 million by early next January.

The site calculated the number of reported cases would double every 23 days while deaths due to Sars would double every 12 days.

The World Health Organisation listed 5663 reported cases, 2470 reported recoveries and 372 deaths to April 30.

Twelve days earlier, on April 17, WHO listed 3389 reported cases, 1597 reported recoveries and 159 deaths.

The World Health Organisation formally issued its worldwide alert about Sars on March 14, when F&P Healthcare shares were at a seven-month low of about $9.20 on the New Zealand Stock Exchange.

Since March 31 shares have surged to about $10.70 on April 21 and closed at $10.75 yesterday.

Mr Daniell, who doubted if the April share rise was linked just to Sars, said he had received a number of inquiries from investors asking about the demand for product as a result of Sars.

He said it was hard to work out what drove share prices up or down but markets had generally moved up.

The company recently reported a record $26.2 million third-quarter profit from strong product growth and currency gain.

In November 2001 Fisher & Paykel Industries was separated into two companies ­ Fisher & Paykel Healthcare Corporation and Fisher & Paykel Appliances Holdings.

F&P Healthcare also trades on the Australian Stock Exchange but terminated its Nasdaq listing in February.

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