Dowgate's Small-Cap Focus: Belluscura

18 January 2022


According to the World Health Organisation, the Omicron variant of Covid-19 is on track to infect more than half of Europeans. In the first week of 2022, Europe saw more than seven million newly reported cases. Evidence is emerging that omicron causes milder symptoms than previous variants, but it can be very serious for the unvaccinated and those with underlying health issues. There is also the issue of long Covid which still affects many affected by previous variants of Covid.

The use of oxygen concentrators is a cornerstone treatment for Covid-19, but the pandemic has highlighted a global shortage of supply, as witnessed by the terrible scenes for India last year as people scrambled to acquire supplemental oxygen for family members struck down by Covid.

The sad fact is, that even before the onset of Covid-19 there was a growing need for respiratory care devices, principally to treat the growing number of sufferers from Chronic Obstructive Pulmonary Disease (COPD) as well as Pulmonary Fibrosis and Cystic Fibrosis.

The global respiratory care devices market is estimated to be worth $23.4 billion in 2021 and is expected to reach $28.6 billion by 2024. Within that, the supplemental oxygen therapy devices market is expected to exceed $4 billion, growing by 6% per annum. The impact of the Covid-19 pandemic could see this growth rate doubling.

Sadly, the figures for those affected by all respiratory diseases are staggering and include conditions such as Emphysema, Chronic Bronchitis and Asthma. Most of those affected are middle aged or older adults who smoke. The WHO estimates that 328 million people globally have COPD, of whom have moderate (stage 2) or severe (stage 3) symptoms. Smoking is the cause of 90% of COPD cases.

In addition to COPD, 5 million adults in the US and Europe use supplemental oxygen to alleviate the symptoms of pulmonary fibrosis, cystic fibrosis and other respiratory diseases.

The majority of sufferers are supplied with supplemental oxygen via oxygen tanks, which can be bulky, restrict the patient’s mobility and impair quality of life. By contrast, oxygen concentrators are devices that ‘purify’ ordinary air into a high concentration of oxygen. They are lightweight and portable and enable people to leave their home. This increased mobility greatly increases their quality of life.


Given the size and growth in the market, it is not surprising that many well-known names are active in the market. Prominent in the oxygen cylinder market, for example, are Air Liquide, Linde Group, Praxair and Invacare. Respironics, part of Philips Healthcare, have a strong market share in both the stationary and portable oxygen concentrator markets, as does NASDAQ listed Inogen. None of these well-known names has a dominant market share, some have ageing products and recent production issues. This, plus the continued growth in the market means there is plenty of opportunity for a new entrant to make an impact in the market…


…which is exactly what Belluscura is seeking to do. Listed on the AIM market in May 2021 it raised £17.5m at 45p to launch a family of products to support the treatment of COPD disease progression. The first of their 3 novel oxygen concentrators was launched in October in the US, which quickly attracted the attention of several distributions. The launch was deliberately slow and cautious, but unit sales are expected to expand rapidly as 2022 progresses. Known as the ‘X-PLOR™’, it is smaller, lighter and quieter than competitive products. Above all it is the world’s first modular portable concentrator. This means that the patient can increase the oxygen output simply by changing the active module. This means that as his disease progresses, he can access additional oxygen without the need to acquire a bigger device to provide the extra oxygen he needs.

By the autumn, it is hoped the X-PLOR™ will be joined by two further products: the X-PLORex, expected to be the world’s first wearable continuous flow portable oxygen concentrator, and the X-PLORdx, expected to be the only 2 litre carriable continuous flow concentrator available (weighing 5.95lbs). Both new products will be Bluetooth enabled.


It is early days, but the initial signs are good. Anecdotally, it looks as though demand will be strong. Not yet approved for use outside the US, a recent investor show in the UK saw a constant flow of attendees to the Belluscura trade stand. And as many were looking to buy the product as they were the shares! The shares have also done well too. They are currently trading at 132p-140p (17/01/22), having reached a high of 148p following a positive trading update.

There is a long way to go, and Belluscura is up against some big brands, but it believes it has a premium product that will do well in a market that is sadly growing and there is room for an exciting new entrant to make a splash.

Such are the opportunities in the treatment of COPD and other respiratory diseases that this is also an area that could see increasing M&A activity. Recently, Apria Healthcare Group Inc announced it had rejected a $918m takeover approach from Transworld Healthcare Inc. Apria provides home respiratory therapy for 1.5m customers in and around California. Before Covid-19, the scourge of COPD was not exactly unknown, but because of it, respiratory diseases are certainly in the spotlight. As is Belluscura.

Written by Mark Chadwick

Dowgate Wealth’s holding in the above stock, BELL: 6,645,159 shares across the whole of DGW including XO, advisory and discretionary (reported on 17/01/22)

The person that has written this also has a personal holding of 402,900 shares (reported on 17/01/22)