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There are two key rules when investing in smallcaps. Firstly 'buy when there’s blood on the streets', & secondly ‘skate to where the puck is heading’.
Both of these apply to expert immunodiagnostics firm Verici Dx (Mrkcap £10m), who today announced a potentially break-through global licensing partnership with healthcare giant Thermo Fisher Scientific (Mrkcap $177bn) to exclusively develop an assay for pre-transplant kidney testing.
Here house broker Singer Capital Markets reckons the deal refers to Clarava. #VRCI’s 1st-in-class, blood test that allows doctors to identify those patients (pre graft) most likely to require increased monitoring - including adjustments in the type, dose & duration of immunosuppressants. Especially important when handling deceased donor parts which provide >60% of all organs.
Elsewhere the agreement also grants Thermo Fisher the sole right (but not obligation) to manufacture, distribute & sell the prognostic worldwide. Alongside providing it with access to a portion of #VRCI’s proprietary urine samples – further highlighting the value stored within its treasure trove of research assets.
In return Verici Dx will receive an upfront fee, augmented by staged payments dependent on operational deliverables (eg tech transfer & publications). Which in aggregate (assuming things go to plan) should equate to c.$5m over the next year with further instalments & ongoing royalties thereafter.
So what does this mean?
Well to me, the agreement not only represents another major endorsement of Verici Dx’s top notch science by an industry behemoth. But also the anticipated $5m should extend #VRCI’s cash run-way until at least the end of 2024 (source Singer Capital Markets), reduce costs and provide the Board with the option of perhaps moving deeper into this type of science-rich, capital-lite licensing model.
Which if adopted, would leverage the sales forces & supply chains of similar 3rd parties. Whilst equally enabling #VRCI to focus entirely on its unique IPR to drive better patient outcomes & material shareholder value.
In fact, this hypothetical arrangement would not be too dis-similar to Bioventix’s already successful licensing model, that is used to commercialise its monoclonal antibodies across the diagnostic sector.
CEO Sara Barrington commenting: “We are incredibly proud of our advancements in transforming potential outcomes for kidney transplant patients. By collaborating with Thermo Fisher Scientific, we believe we can accelerate the development of our technology, helping ensure that it reaches those who need it the most.”
Finally wrt the financials, Singer Capital Markets have replaced the revenues previously anticipated from Clarava with the above licensing fees.
As such FY23 turnover is now forecast to come in at $0.3m, climbing to $8.6m in 2024 (vs $4.9m B4) & generating an adjusted EBITDA of $0.1m, while ending Dec'23 with net cash of $0.1m. Plus they have a BUY
Nice Jv bringing in $5m with further benefits.
For me this only has to be the start of the money rollercoaster that VRCI are going to create.
Literally they are taking the urine!
'In addition, Verici Dx has granted Thermo Fisher a non-exclusive license for access to a portion of the Company's urine samples, demonstrating the additional value in the Company's data and sample assets for research.'
They were already fully funded until mid 2024 so no placings ahoy!
GL.
A little late LOL but at last it's out there.
An idea in take up numbers would be ideal in the near future but has great potential as a decent revenue stream.
Awaiting funds (which are delayed) for my top up but hopefully will add soon.
GL.