RE: TF20 Sep 2018 19:27
Tw's latest
We have only been waiting three years for this and in the end it came as a complete surprise but a very pleasant one at that. At last Premaitha (NIPT) has settled its patent dispute with American bully boy giants Illumina. This bolt from the blue is great news and now means that a rapidly growing and profitable business will be, at last, valued on fundamentals and that will drive a re-rate which appears to be underway already.
The shares are now 13.75p-14.25p and are a buy at up to 15p with a target to sell of 25p+ by Christmas. The deal, covering Premaitha’s IONA non invasive pregnancy tests for Down’s syndrome sees Premaitha free to sell its test in the EU and UK – where there were patent issues but will pay Illumina a royalty under a license agreement. Premaitha has also agreed to develop an IONA test that runs on Illumina sequencing technology, to be launched in early 2020; and within nine months of signing the agreements has committed to submitting documentation to a notified body for obtaining CE-IVD certification in Europe for the Illumina-compatible IONA test.
Thereafter in the UK and in the Evil Empire Premaitha will work with its customers in the licensed territories to migrate to the IONA test based on Illumina sequencing technology. Premaitha will pay legal costs to settle all litigation to date. These have already been provided for are no more than £1 million.
In the Rest of the World where Premaitha is seeing the most exciting growth it is business as normal and that means that for the rest of the year we can expect to see many more contracts signed and with the company already at a break even run rate as at March of this year, huge operational gearing will see it move into profit in the year to March 31 2019 with a massive ramp up thereafter.
This stock will, given its sector and its growth potential (which is perhaps not potential but reality), be highly rated – easily mid to late teens – and as such the £54 million market cap today does not reflect the sort of profitability that will be achieved in a year beginning in less than six months time. BUY at sub 15p while you can.
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