A good start to the year

bioMerieux reported healthy Q1 23 sales, with organic sales witnessing high single-digit growth. As expected, robust momentum was witnessed for the non-COVID-19 businesses. Management also reiterated its 2023 guidance. Overall, considering that non-COVID-19 testing tailwinds are expected to remain resilient, along with sustained innovation and expansion into point of care testing, our positive recommendation is maintained.

Decent end to 2022; innovation remains at the fore-front

bioMerieux released in line Q4 sales numbers, with healthy growth being witnessed across the board. Importantly, the recent spike in influenza infections, respiratory syncytial virus and higher COVID-19 infections resulted in strong demand for respiratory panels. While COVID-19 testing tailwinds are expected to further moderate in the coming quarters, the 2023 guidance remains unchanged, reflecting a healthy outlook for the non-COVID-19 offerings. Overall, considering a slew of launches accompan

Healthy non-COVID business momentum + improved 2022 guidance

bioMerieux’s Q3 sales came in ahead of both AV and consensus expectations. While COVID-19 testing sales continued to weaken (also a sector-wide trend), healthy developments were witnessed in the non-COVID space. Moreover, management also (marginally) improved its 2022 sales growth guidance. Considering that non-COVID testing tailwinds are expected to remain resilient and the re-emerging M&A rumours – given the material sell-off over the past couple of months – our positive recommendation is reit

Strong Q2; guidance upgrade

bioMerieux reported strong Q2 22 sales. Positive momentum was witnessed in Molecular Biology, Microbiology and Industrial Application. Moreover, the recent spike in COVID-19 cases and higher flu market opportunities in the US resulted in strong demand for respiratory panels. Management also (marginally) improved its 2022 guidance. Add on top, notable progress in offering innovation terms and promising testing market dynamics, the sell-off in recent months is worth capitalising.

A slow start to the year

bioMerieux reported weak Q1 22 sales, with organic sales witnessing a mid-single-digit decline. As expected, COVID-19 testing sales moderated while positive momentum was witnessed across the Microbiology and Industrial segments. Management also reiterated its 2022 guidance. While our estimates should reset marginally lower, the MedTech sell-off in recent months has reinstated the attractiveness of the likes of bioMerieux, especially considering the long-term non-COVID testing market business opp

Healthy 2021; weak 2022 guidance, but it isn’t an investment case spoiler

bioMerieux ended 2021 on a healthy note, with impressive sales and profitability, driven by promising dynamics across segments. This also resulted in impressive dividend growth. While 2022 guidance was on the weaker side – due to fading COVID-19 testing tailwinds, and increasing costs (partly also due to post-pandemic normalisation), it wasn’t a big surprise. While our estimates could reset marginally lower, the sell-off in recent months opens an attractive opportunity, also with respect to M&A

Healthy Q3 prompts 2021 guidance upgrade

bioMerieux reported healthy Q3 results, with growth across the board. Interestingly, both COVID-19 and routine businesses were beneficiaries in varying degrees. As a result, management upgraded its FY2021 sales growth and profitability guidance. Besides these results reinforcing our positive stock recommendation, they are also an important read-across for testing firms, wherein their ability to withstand erosion in COVID-19 testing via a recovery in routine areas has been a comforting developmen

Q2: recovering routine business plus some (temporary) profitability tailwinds

Despite further normalisation in FilmArray, bioMerieux witnessed recovery/ healthy momentum in most other routine areas. Although, as expected, group-wide sales growth moderation was evident. Importantly, profitability came in ahead of (consensus) expectations due to temporarily lower costs. While the worsening COVID-19 situation, especially in the US, may render some near-term support to FilmArray, the rebound in routine businesses is a major promising signal. Our positive stock recommendation

COVID-19 tailwinds fading away

Organic sales growth decelerated in Q1 21 as demand for FilmArray’s respiratory panel slowed in the US towards the end of the quarter. As the health situation improves in the US, demand for PCR-based testing could decline in the coming quarters. Ergo, FY21 sales guidance has been slashed. The entry of Roche in the syndromic testing space, through GenMark, is also a threat, though the recovery in the routine testing business provides some respite.

Another quarter of double-digit growth; full-year targets exceeded

Benefitting from sustained demand for COVID-19 testing solutions, bioMerieux reported another quarter of double-digit growth in Q4 20. Interestingly, the FY20 targets were exceeded, both on the sales and profitability front, and management has proposed a dividend of €0.62 per share (vs. FY18: €0.35). The FY21 guidance is also encouraging and growth is likely to be front-end loaded. bioMerieux is banking on its menu-expansion strategy to bolster growth for FilmArray once COVID-19 subsides, but so

Momentum accelerates in Q3; FY20 targets instilled

The Q3 outperformance was led by the FilmArray product line which benefited from exceptional demand for molecular-based COVID testing and increasing instrument placements. The Industrial applications segment also returned to growth. Although the routine testing businesses saw an improvement, it continues to trade in the red and, as hospital traffic remains subdued, uncertainty remains with respect to a full recovery. Nonetheless, the FY20 guidance implies that organic sales growth could reach a

Profitability beat in H1

Despite lower revenue in the microbiology and immunoassays businesses due to a decline in routine testing, bioMerieux reported double-digit organic revenue growth in H1, led by robust demand for COVID-19 tests in the molecular biology business. The resulting operational leverage, favourable product mix and lower selling expenses led to a profitability beat in H1. The favourable sales trend witnessed in H1 should continue in the second half, though the same trend cannot be extrapolated to FY21 ac

Molecular biology to the rescue as situation worsens in other businesses

Q2 sales were slightly ahead of expectations led by continued demand for molecular biology product lines used in COVID-19 testing. However, the momentum decelerated compared to the previous quarter as the situation worsened in the microbiology and immunoassays businesses – due to less patient traffic in hospitals and the resulting decline in routine testing. Though the company witnessed an improvement in these businesses during the last few weeks of Q2, returning to pre-COVID levels could take t

Despite an exceptionally strong Q1, FY20 targets suspended

Q1 sales were significantly ahead of expectations fuelled by increasing demand for FilmArray’s respiratory tests amid the ongoing COVID-19 pandemic. While respiratory and recently-developed COVID-19 tests should bolster growth going forward, the number of patients seeking consultations for other diseases is falling substantially. This could result in a slowdown in the routine laboratory business and, in turn, bioMerieux’s immunoassays and microbiology segments (the impact was visible in the last

In line Q4 19, overshadowed by cautious outlook for FY20

Q4 19 was largely in line as the pick-up in sales in microbiology, driven by equipments, made up for the slowdown in FilmArray, due to rising competition. However, the guidance for FY20 signals a sales deceleration with China, held back by the Coronavirus being the main drag. Lower sales could also affect profitability in FY20. While bioMerieux plans to introduce a test to detect Coronavirus by Q2 20, it is still behind rival Qiagen in terms of test development.

Initial Equity Trading Comments - 15 May 2023

LIBERUM: Aptamer* - Prelims supports growth projections

Kromek - Placing raises £7m with Open Offer of up to £1m

Kromek raised £7m (with up to £1m via an Open Offer) to strengthen the balance sheet and provide the working capital for the CT programme to bridge the gap before supply agreements with recently announced Tier 1 and Tier 2 OEMs commence in earnest. As the only independent commercial scale manufacturer of the next-generation detector (CZT) for use in CT and SPECT imaging systems, Kromek is actively engaged with 9 OEMs (both Tier 1 and Tier 2), with 3 agreements having now been signed (FC estimate

LIBERUM: Aptamer* - Initiation - Build better binders

Hybridan Small Cap Feast - 19 May 23

19th May 2023 @HybridanLLP Status of this Note and Disclaimer This document has been issued to you by Hybridan LLP for information purposes only and should not be construed in any circumstances as an offer to sell or solicitation of any offer to buy any security or other financial instrument, nor shall it, or the fact of its distribution, form the basis of, or be relied upon in connection with, any contract relating to such action. This document has no regard for the specific investment objectiv

Oxford BioDynamics+ (OBD, House Stock, 17p) - Expanding applications

Funding the opportunity in medical imaging

On 18 April Kromek announced a major seven-year agreement with a Tier 1 OEM to develop and incorporate its CZT-based detectors in the OEM’s advanced medical imaging scanners, and further deals have since followed. In order to fund these opportunities, on 5 May the Group announced a fund-raise of £8m (gross). It is our assumption that the Tier 1 OEM segment targeted is the CT scanner market. This was worth an estimated US$6.7bn in 2022 and, at a 5.6% CAGR, is expected to reach US$9.92bn by 2029.

NetScientific - FY 2022 results, portfolio value increases 35%

NetScientific, an investment and commercialisation group with an international portfolio of innovative life science, sustainability, and technology companies announces its FY 2022 results demonstrating a 35% increase in portfolio value to £41.8m across an expanding portfolio of 24 companies. NSCI reports that its portfolio has raised c. £70m. In line with its capital light investment strategy, NSCI/EMV have supported these fund-raises selectively through £3.2m of direct investments and loans, an

Destiny Pharma plc (DEST) - House Stock at 35p - Stars aligning

Initial Equity Trading Comments - 10 May 2023

Avon Protection - Termination of coverage

Edison Investment Research is terminating coverage on Avon Protection (AVON), Osirium Technologies (OSI), IQE (IQE), Kopy Goldfields (KOBY) and RhoVac (ROHVAC). Please note you should no longer rely on any previous research or estimates for this company. All forecasts should now be considered redundant.

ReNeuron Group - Full steam ahead with CustomEx

ReNeuron’s FY23 results provide a recap of financial and operational highlights from the period. Following the restructuring announcement in January 2023, the company’s focus rests on its proprietary stem cell-derived exosome platform, CustomEx. In vivo animal studies to validate the platform’s capabilities are ongoing, and ReNeuron plans to release readout data in H2 CY23, which we anticipate could be a key catalyst and generate traction for partnerships. Due to the macroeconomic environment, m

Morning Note – 19 April 2023

FY22 results disappointing – outlook offers promise

FY22 was something of an annus horribilis for Abingdon due to factors largely outside of its control. As the pandemic has subsided, legacy issues have been resolved and management has cleared the decks for a reset of activities, focussing on a range of Contract Development and Manufacturing opportunities. The settlement with the DHSC has been resolved and £6.4m in cash received post-period end. Management therefore expects there to be no current funding requirement as it moves towards cashflow b

Positive preclinical data, interims and funding

Nuformix focusses on the development of NXP002, a patented novel form of tranilast. In a key step forward, completed preclinical studies support its future development. Most importantly, these studies indicate that tranilast, as prepared by Nuformix, can be dissolved and delivered to the lung by a nebuliser. Tranilast may be able to treat idiopathic pulmonary fibrosis (IPF, lung scarring) but needs to be in the lung in a higher dose than can be achieved orally - so direct lung delivery is crucia