Creo Medical (CREO.L): Sterilisation tool against COVID-19 | Omega Diagnostics (ODX.L): Indian approval for COVID-19 antibody test
Companies: Creo Medical Group Omega Diagnostics Group
Omega Diagnostics (ODX): Corp COVID-19 update – ELISA test approved in India
Companies: Omega Diagnostics Group
KRM22 (KRM): Corp | Morses Club (MCL): Corp | Omega Diagnostics (ODX): Corp
Companies: ODX MCL KRM
ANGLE (AGLE.L): Corp | Omega Diagnostics (ODX): Corp | Surface Transforms (SCE): Corp | Touchstone Exploration (TXP): Corp | Trifast (TRI): Corp
Companies: ODX SCE TRI AGL TXP
Omega has conditionally raised £8m alongside an Open Offer up to £3m, to scale manufacturing, expand its lateral flow portfolio of global health tests and exploit the opportunities for COVID-19 testing that arise from its partnerships within the UK. We argue that the Food Intolerance business largely underpins the current valuation, given imminent Chinese approval, with upside derived from VISITECT and COVID-19 opportunities. Modelling the potential impact of a COVID-19 test with any degree of confidence at the moment is not possible; however, we provide a COVID-19 capacity model and a SOTP analysis that points to a valuation that is substantially in excess of the current market capitalisation.
Avacta (AVTG.L): Corp | Europa Oil & Gas (EOG): Corp | Omega Diagnostics (ODX): Corp | Redcentric (RCN): Corp | Telit (TCM): Corp
Companies: AVCT EOG ODX RCN TCM
Further to its announcement on 20 April that it had signed a Material Transfer Agreement (MTA) to provide manufacturing capacity for Mologic’s COVID-19 first generation ELISA diagnostics and CE marking on 27 April, Omega has signed a 3-year supply agreement for the ELISA tests as well as extended the collaboration to include the manufacture of an ELISA antigen test and two point-of-care (POC) lateral flow tests – both antigen and antibody tests – that are being developed by Mologic. We have made changes to FY 2021 forecasts to reflect the short-term disruption to Food Intolerance revenues, but are encouraged by first orders for the ELISA COVID-19 antibody test.
Further to the announcement on 9 April of Omega’s participation in a UK Rapid Test Consortium (UK-RTC), a point-of-care COVID-19 antibody test programme, the UK-RTC confirmed today that it is on track to reach a design freeze in June, following early results from 66 samples, which indicated the test to be in line with design requirements. Omega stands ready to mobilise both people and facilities at Alva, Scotland, to produce tests for the consortium. We are leaving our base forecast unchanged (reflects the non-COVID business only), but placing target price under review given the difficulty of forecasting potential COVID-19 related sales with any degree of accuracy.
ANGLE (AGL): Corp Progress report since COVID-19 lockdown | NAHL (NAH): Corp Navigating change in difficult markets | Omega Diagnostics (ODX): Corp VISITECT CD4 supply agreement with CHAI | Proactis (PHD): Corp Reset of banking facility | STM (STM): Corp Transitioning into new markets from a robust base | Universe Group (UNG): Corp Strong FY19 trading update, strong FY20 order book
Companies: ODX PHD STM UNG AGL NAH
Novacyt S.A. (NCYT.L): Supply contract with UK Department of Health and Social Care | Omega Diagnostics (ODX.L): Group performs CE-marking of Mologic Ltd’s COVID-19 antibody test | RenalytixAI (RENX.L): Utah Commercial Laboratory Facility Achieves ISO 13485 Certification | Faron Pharmaceuticals Oy (FARN.L): Inclusion of Traumakine in the WHO SOLIDARITY trial
Companies: NCYT ODX RENX FARN
Alumasc (ALU): Corp | Byotrol (BYOT): Corp | Lok'nStore (LOK): Corp | Omega Diagnostics (ODX): Corp | Quartix (QTX): Corp
Companies: ALU BYOT LOK ODX QTX
NAHL (NAH): Corp | Omega Diagnostics (ODX): Corp | Proactis (PHD): Corp | Wameja (WJA): Corp
Companies: WJA ODX PHD NAH
Companies: SYS DDDD CCS ANGS ODX RENX YGEN FUM BARK ENET
Avingtrans (AVG): Corp Covid-19 update | Chariot Oil & Gas (CHAR): Corp Restructuring to last | Omega Diagnostics (ODX): Corp COVID-19 antibody test – part of consortium
Companies: AVG CHAR ODX
Companies: AVCT FLO ODX TRCS KRM
Research Tree provides access to ongoing research coverage, media content and regulatory news on Omega Diagnostics Group.
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A number of REITs have the ability to thrive in current market conditions and thereafter. Not only do they hold assets that will remain in strong demand, but they have focus and transparency. The leases and underlying rents are structured in a manner to provide long visibility, growth and security. Hardman & Co defined an investment universe of REITs that we considered provided security and “safer harbours”. We introduced this universe with our report published in March 2019: “Secure income” REITs – Safe Harbour Available. Here, we take forward the investment case and story. We point to six REITs, in particular, where we believe the risk/reward is the most attractive.
Companies: AGY ARBB ARIX BUR CMH CLIG DNL HAYD NSF PCA PIN PXC PHP RE/ RECI SCE SHED VTA
Laboratory Services Contracts Signed
Companies: Open Orphan
The announcement announced today highlights the potential breadth of the KidneyIntelX platform, opening up new routes to expand data inputs and test utility, and create opportunities alongside pharmacological therapy as a companion diagnostic. The first agreement with the University of Michigan adds an additional 800 chronic kidney disease (CKD) patients (adding to Mount Sinai’s 1,500 patients and the University of Groningen’s 3,500 patients) to analysis the performance of KidneyIntelX in different settings. This will ultimately carry additional sway with healthcare centres, regulators, and payers. The option to exclusively license a new urinary biomarker, urinary Epithelial Growth Factor (uEGF), shows the potential to add additional biomarkers and body fluids into the platform to further enhance the prognostic performance of KidneyIntelX. We understand there is a relatively immaterial upfront payment to access this new biobank, and a similar immaterial cash payment to gain the biomarker license option with additional milestones and standard tiered royalties payable if exercised. The second data sharing agreement with a major undisclosed pharma partner highlights KidneyIntelX’s potential use as a companion diagnostic (e.g. for SGLT2 inhibitors) and the potential to use the test multiple times to monitor drug response. This builds on work being conducted in Groningen with data expected H2 CY’20. Ultimately, pharmaceutical collaborations could drive additional long-term value creation and may open opportunities for lucrative licensing and M&A deals. At this juncture we make no changes to our forecasts and eagerly await further updates. We reiterate our positive stance on Renalytix.
Companies: Renalytix AI
Today Ergomed held its annual general meeting (AGM). As expected, no new financial details were provided, although the executive chairman released a statement with a general business update. Q120 trading was good with ‘solid overall growth in revenue’ and cash generation ‘remained strong’. In Q220, Ergomed continued to grow the order book across the business and maintained its ‘revenue growth trend’. Its staff successfully adapted to remote working conditions and no employees were made redundant or furloughed. The H120 trading update will be released in July 2020 as usual, but Ergomed stated within its AGM update (June 10) that it is confident the results will be ‘in line with current market expectations’.
Renalytix’s US IPO filing document went live overnight (having previously been filed confidentially). Whilst there are no details on size of offering, but the document is rich with details of the use of proceeds which we encourage UK investors to read. We are doing the same and will update our views in due course. Associated with the US filing document, another release this morning announces the publication of a circular, and outlines details for a new General Meeting on the 13 July 2020 to approve the issue of new shares, as well as board changes if the US IPO goes ahead. Namely, Julian Baines (Non-executive Chair) and Richard Evans (NED and Audit committee Chair) are stepping down from the board, Christopher Mills will assume the role of interim chair whilst a search for a successor is conducted.
Cambridge Cognition ("COG") has provided a trading update for the 6 months to 30 June and presented its growth strategy at an excellent Capital Markets Day. The Group continues to build on an impressive H1 2020, announcing additional contract wins that take the order intake to £4.9m (+88% vs H1 2019). COG is currently 'seeing unprecedented demand' for its solutions which enable pharmaceutical companies to continue clinical trials even while participants are unable to physically visit clinical trial sites.
Companies: Cambridge Cognition
With CHF13bn ($14bn) annual sales, Roche is a dominant force in the global diagnostics market. Interestingly, in recent years, most diagnostics majors have witnessed material re-ratings – also a function of increased M&A euphoria. Now, in the backdrop of COVID-19, Roche has also emerged as a prominent player on the testing front. With big pharmas moving away from (low-growth) non-pharma offerings, is it time for Roche to consider unlocking value from Diagnostics?
Companies: Roche Holding
AVO’s goal is to deliver an affordable and novel proton therapy (PT) system, called LIGHT, based on state-of-the-art technology developed originally at the worldrenowned CERN. Over the past two years, the project has been significantly derisked through important technical milestones. AVO is working on the verification and validation phase, prior to LIGHT being used on the first patients to support CE certification. A recent equity issue, new loan facilities and some commercial announcements earlier in 2020 highlight the increasing confidence that is building in AVO’s ability to achieve its goal to deliver LIGHT in the near future.
Companies: Advanced Oncotherapy
ReNeuron has released further follow-up data from the ongoing human retinal progenitor cell (hRPC) trial, which shows a robust sustained averaged response. This data set completes the six-month data on eight patients and extends, for one individual, to 18 months, who showed a good net gain. The next dose level, two million cells in nine patients, remains delayed due to COVID-19. A filing to start a pivotal study is expected in the second half of CY21. Our indicative value remains at £107m.
Companies: Reneuron Group
Hutchison China MediTech (HCM) is on the brink of global launches of two assets from its internally developed oncology portfolio. In 2022 we expect US launches of surufatinib (broad NET indication) two years earlier than forecast as well as savolitinib (NSCLC). Recently the FDA granted fast-track designation to fruquintinib in mCRC and we forecast global launch in 2023. In China, HCM has laid the foundations to capitalise on the slew of additional novel oncology drugs (expected by end 2021). HCM is well funded (following the recent $100m equity investment from General Atlantic, plus warrants granted for an additional $100m in 18 months) as it accelerates the global development of its unpartnered assets and expands its global commercial outreach. Beyond 2024 we expect sustainable profitability and margin expansion. Our increased valuation is $6.3bn.
Companies: Hutchison China Meditech
We are introducing our Best Ideas for 2019 and also review the performance of last year’s picks. We suggest ten solidly financed stocks with good business dynamics that ought to be considered for core portfolio holdings and six UK domestically focused stocks that our analysts believe should perform strongly in the event that uncertainties unwind. We also introduce a new style of research from N+1 Singer which presents a Company’s dynamics and metrics in a clear and concise manner and concentrates on the pivotal issues affecting that Company and an investment decision.
Companies: BCA CLIN CLG CBP DNLM EAH STU FCRM FUTR GTLY INS GLE NICL SDL SPR TRI
Hutchison China MediTech (HCM) is on the brink of global launches of two assets from its internally developed oncology portfolio. In 2022 we expect US launches of surufatinib (broad NET indication) two years earlier than forecast as well as savolitinib (NSCLC). Recently the FDA granted fast-track designation to fruquintinib in mCRC and we forecast global launch in 2023. In China, HCM has laid the foundations to capitalize on the slew of additional novel oncology drugs (expected by end 2021). HCM is well funded (following the recent $100m equity investment from General Atlantic, plus warrants granted for an additional $100m in 18 months) as it accelerates the global development of its unpartnered assets and expands its global commercial outreach. Beyond 2024 we expect sustainable profitability and margin expansion. Our increased valuation is $6.3bn.
Collagen Solutions (COS.L): Supply agreement with NovaBone
Companies: Collagen Solutions
Warren Buffett once said that as an investor, it is wise to be ‘fearful when others are greedy and greedy when others are fearful’. Fear is not in short supply right now.
Companies: OPM ALU ANCR BLV CONN CRC STU GATC HAT LEK MMH MCB MWE NXR NTBR NOG PAF PEG RFX SRC TEF TEG TPT VTU WYN XLM
We are initiating coverage on specialist pharmaceutical services provider Ergomed. We believe it should prove relatively resilient during the COVID-19 crisis and has the fundamentals in place to execute its growth strategy. Ergomed announced impressive audited numbers for FY19, with revenue up 26% to £68.3m and EBITDA up 5.5x to £12.5m. The FY19 announcement is effectively Ergomed’s fourth profit upgrade for FY19 and a small beat on recently reset FY19 expectations. Ergomed trades at a discounted EV/EBITDA of 10.1x vs the contract research outsourcing (CRO) sector average of 11.5x (FY20). We value Ergomed at £186m or 399p/share. Ergomed’s strong organic growth is benefiting from a clear strategic focus on high growth pharma sectors, margin control and order book growth (up 15% to £125m in FY19, giving 90% visibility to 2020).