focusIR May 2024 Investor Webinar: Blue Whale, Kavango, Taseko Mines & CQS Natural Resources. Catch up with the webinar here.
@GMS. Sales have NOT been stagnant. They have sold 770 CiRT tests since the end of last financial year (Oct 31). On a monthly basis sales have grown by at least 20% per month since July last year and are probably sitting somewhere around 300 a month right now!
The company could easily cover ongoing costs by selling one of its pipeline tests to a third party. Indeed discussions are underway to licence tests already AND the growth of CiRT sales will transform the company to profit making this year.
Correct wombat.
I have simply assumed a 20% per month linear growth rate as we don't yet have enough data to do a curve fit. The reality is growth looks to be exponential which makes my forward projection on profitability very conservative.
Also worth remembering we had the December holiday season in that period so realistically that 770 has come in a bit less than 3 months!
I'll be buying more.
The potential of a licencing agreement with a big pharma organisation knocks it out the park!
If that brings a big pharma sales team to the table I'd be looking to have the push both CiRT and PSE tests on our behalf and against monetised performance guarantees. Potentially huge!
What is dissapointing about a sales growth rate that will bring about an annual profit this coming financial year?
If we maintain this growth rate (it will get hiĝher) then we hit about 1100 tests a month of £2 million MONTHLY profits by end FY 2024.
So in the 3.5 months since end of the financial year we have sold 770 CiRT tests which is more than in 2022 & 2023 combined. It equates to an average of 220 per month equivalent to a monthly growth rate of 20% since we were told we had reached 90 a month back in July.
If that growth rate is maintained (more likely it will be surpassed) we get above 400 tests a month by end April this year.
If the reimbursement rate is still £2000 per month we will bring in enough.money to become profit making this year.
Fantastic news!
It's all about the update on CiRT and to a lesser extent PSE sales.
Annual results will not be much different from last year and losses may even be a little higher due to inflationary pressures through 2023. That doesn't matter, especially if CiRT sales are greater than 200 per month as continued growth at that rate puts OBD on a path to profitability in 2024.
Whilst quick progress towards an estimated £4.4 million annual profit would be great, the other major benefit of the BUPA deal is that it will further validate the test and in doing so it will be a catalyst to the much larger UK market (~150,000 annual Cancer cases 'eligible' for immunotherapy). NHS reimbursement rate will no doubt be negotiable but remember CiRT will save the NHS way more than it costs! A course of immunotherapy for 1 patient is reported to cost more than £80,000.
Thought it would be interesting to try to get a feel for the potential of the deal with BUPA in the UK.
According to Google BUPA has just over 2 million UK customers, which equates to circa 3% of the UK population.
Recent data indicates that more than 40% of cancers are eligible for immunotherapy.
https://www.ncbi.nlm.nih.gov/pmc/articles/PMC6503493/
In the UK there are some 375,000 new cancer cases per year.
https://www.cancerresearchuk.org/health-professional/cancer-statistics-for-the-uk
In principle BUPA should insure 3% of those which is roughly 11 000 patients. If 40% of these are eligible for immunotherapy we would have 4400 patients per year that could benefit from a CiRT test! If I then assume the deal with BUPA gives them an early adopter discount that reduces our profit per test by 50% then the potential from the BUPA deal would be approximately £1000 x 4400 or £4.4 million per annum.
It is very early days for the BUPA partnership but it is a direct route to market and should grow towards its ultimate potential quite quickly. Remember it is based on just the 3% of the UK population that are existing BUPA customers.
Whilst our CSO is presenting at the Precision Medicine World Conference, our CDO Ewan Hunter is simultaneously presenting at the 2nd Annual Spatial Biology for Immuno-Oncology Summit in San Diego, where the company is attending as an Expertise Partner. He is discussing the linkage between the Tumor Micro Environment and blood profiling by 3D genomics. The conference is being attended by potential customers (hospitals) and potential partners (including big pharma).
Good to see an SME like our company getting so much attention for its input to a dynamic emerging,
and potentially huge, market!
Wonder if yellowstone advisory know something?
https://twitter.com/YstoneAdvisory/status/1744756350301671937?t=D7O26L5W8_XTIh8wPTPtLw&s=19
Hi Dibs,
Year end for OBD is end Sept. This is coincident with the launch of the PSE test and before the availability of a PSE reimbursement code in the US.
It is also only a month or two after the apparent acceleration in CiRT sales which started from a pretty low base level. Because of this my expectations for the formal year end results are low. We may have sold a few hundred CiRT tests in that timeline but I expect the profits from those may just about offset the negative impacts of inflation during the year. I'm expecting losses to little changed or probably a bit higher on a year on year basis.
The key takeaway next Wednesday will be the insights from the promised sales updates to be provided in the follow-up webinar on Wednesday afternoon. If CiRT sales have doubled ( to ~200 per month) since the last update they will be growing at an average rate of about 12.5% per month. If that was maintained we would hit 400 to 500 per month by the end of this fiscal year (Sept '24) and we will be well on our way to profitability. Of course we also have PSE now and an early indication of how sales are taking off will add to the interest. I'll be listening carefully for any hint that we are potential participants in the Transform trial for a national screening programme for prostate cancer. Not only do I think we would be prime canidates to become the chosen technology, but we should be reimbursed for tests done as part of that trial and that could be a nice boost to revenues.
It's more a case of looking forward to the year ahead rather than expectations of the results of the year gone by.
Not quite GMS. By stating Nov '22 I was trying to focus on the last year (more or less). You are however right to make the point about the placing (Oct '22) and if I extend the timeline back to then he would indeed have increased his shareholding as you indicate.
Fact is the value of his shareholding has increased substantially and if he thought he could invest it better elsewhere I imagine he'd have materially reduced his holding to raise funds. He hasn't which suggests he sees a lot of value to be gained from OBD.
Inevitably as the SP clubs we have the re-emergence of the Vulpes selling myth.
It's easy to check.
https://investing.thisismoney.co.uk/director-dealings/OBD
From Nov 22 through his last trade towards the end of last year Diggle bought just short of 1 million shares @ approx 15p and sold just over 1 million at approx 38 p.
He continues to own about 13% of the company and whilst the number of shares he holds is down by a tiny fraction of his total holding, his investment in the company is worth more than double what it was 12 months ago.
Hardly a vote of no confidence in the company as some would like us (for some strange reason) to believe.
The growth potential is massive. Consider just the possibility that PSE becomes the basis of a nationwide prostate screening programme in the UK.
15.5 million over 60's in the UK. Let's say 40% male. That'd give roughly 6 million men. If testing frequency for them was every 3 years you would be looking at 2 million PSE tests per year in the UK alone. Even if at that scale the profit per test dropped to say £50 from the current £200, annual profit potential would be £100 million per year. That's before considering the much larger European. Asian and American markets.
The numbers are mind boglingly big so even partial success should see the mcap rocket in the next few years. Brokers already suggesting SP should be >£2 by year end.
A chunk.of that impact on mcap will co.e with the announcement that the PSE test is included in the national screening trial. That should come soon ('spring 2024' ). With PSE being more accurate and cheaper than the alternatives it has to be the preffered candidate.