inspirator schreef op 29 augustus 2016 18:15:
Based on NPV based valuation, we believe that MDxHealth is seriously undervalued at the current share price of EUR 3.46. We have increased our valuation from EUR 395 million (or EUR 8.72 per share) to EUR 495 million (or EUR 11.00 per share) due to a better outlook for Cologuard and expected stronger revenues from both ConfirmMDx and SelectMDxTM. This represents a substantial upside from the current share price.
For the six months ended 30 June 2016, revenue from continuing operations was up 65% to USD 12.9 million (2015H1: USD 7.9 million) with strong sales from ConfirmMDx®, that comprised 83% of the first half revenue. According to our estimates, Volumes of ConfirmMDx® in 2015H1 rose 65% to over 9,100 tests compared to 5,500 tests in 2015H1. In total, more than 45,000 ConfirmMDx® tests have been ordered since its launch in 2012. Net loss for the first six months of 2016 increased by USD 2.1 million to USD 7.6 million. The higher loss is attributed to inclusion of NovioGendix costs, build-up of international sales organization for non-US, non-recurring corporate develop project costs, and cotinued investment in sales and managed care.
MDxHealth also was successful in securing new reimbursement coverage for both ConfirmMDx and SelectMDx for Prostate Cancer with large healthcare providers like Priority Health and Cigna. Following the launch of SelectMDx for Prostate Cancer in the US, the company received reimbursement coverage from large healthcare providers like ACPN and Fortified Provider Network. We expect the first revenues from sales of SelectMDx to be generated in 2016H2.
The company’s cash position was USD 20 million as of June 2016. The average cash burn in the first six months of 2016 was USD 1.9 million per month. Combined with the increasing sales from ConfirmMDx® for Prostate Cancer, increasing royalty income from Cologuard and the near-term revenue potential from its novel non invasive tests SelectMDxTM for Prostate Cancer and AssureMDxTM for Bladder Cancer, we believe that the company has enough cash to further increase its sales and marketing efforts, and finance the further development costs of its product portfolio.
For 2016FY we expect revenues to amount to USD 28.2 million, which is somewhat above the guidance (increase in revenues up to 50%) that MDxHealth has provided. In the last few years, COGS that includes laboratory labor, material and overhead has decreased substantially from 77% in 2013 to 39% in 2015. COGS sold is expected to reduce further to 31-35% in the next few years. For the longer term, we expect the gross margin to improve further to 75%. Most important costs are associated with selling and marketing, which we expect to decrease in 2016 to 100% of total revenues and to be below 80% after 2017. We expect the company to reach near break even in 2018. For the longer term we estimate the company will reach an EBIT margin of 50-55%.
We have increased our valuation from EUR 395 million (or EUR 8.72 per share) to EUR 495 million (or EUR 11.00 per share) due to a better outlook for Cologuard and expected stronger revenues from both ConfirmMDx and SelectMDx. This represents a substantial upside from the current share price. We model sales and cash flow up until 2025. Our forecast includes sales of ConfirmMDx® for Prostate Cancer, SelectMDxTM and AssureMDxTM reaching revenues by 2025 of USD 200 million, USD 180 million and USD 40 million respectively, and reaching market shares in the subsequent markets of 8-12%.
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