Within the month of November 2017, NetScientific portfolio companies had a series of announcements reflecting increased adoption of their products. ProAxsis announced increased sales of its research kits and guided to over £1m in sales in 2018. Wanda’s partner Health Resource Solutions announced that it would be expanding the deployment of the app to all of its applicable patients. Finally, Vortex announced the first commercial sale of its VTX-1 liquid biopsy platform.
ProAxsis announced that it had tripled the number of orders for its Active Neutrophil Elastase Immunoassay (NEIA) kit in H217 over H117, partially as a result of a high number (75%) of repeat orders, and is on a run-rate to surpass £1m in sales in 2018. Outside of the near-term revenue, this is encouraging for both the adoption of further research kits and for the company’s point of care neutrophil elastase assay, NEATstik, which was CE marked in September 2017.
The decision of Health Resource Solutions (HRS) to expand the deployment of Wanda was made based on an analysis of the product that revealed that it reduced the rate of rehospitalisation of patients using it by 72% (to 4.5% overall). The product had a 74% compliance rate, and HRS stated that it enabled the company to improve its quality of care without increasing workload for clinicians. This is strong evidence of the utility of this product in the commercial setting
Vortex has been in the process of a soft launch of its VTX-1 liquid biopsy device through placements with opinion leaders. This has resulted in increased awareness of the product and inclusion in peer-reviewed publications, and recently culminated in the first commercial sale. This is an important milestone, but there remains a high degree of uncertainty regarding the commercial viability of the device.
We have increased our valuation of NetScientific to £62.1m or 90p per share, from £57.3m or 83p per share. We have increased the value of ProAxsis and Wanda, offset by a reduction in Vortex, based on the commercial updates. Otherwise, our valuation remains unchanged. The companies still require additional financing (recorded as a £16m shortfall) and NetScientific has announced ongoing financing efforts for Glycotest, PDS, Vortex and ProAxsis, which are expected to close in 2018.