Nanosonics limited

Adoption of Trophon 2 – A catalyst for future growth: Nanosonics Limited (ASX: NAN) had registered sales of $60.7Mn, a fall of 10% on a Y-O-Y basis. This fall was due to the reason of customers delaying their purchases in anticipation of the release of Trophon 2 in the Q1 FY 2019. This fall was partially offset by accelerated adoption of the Trophon in the UK. It clocked a Gross profit of $45.3 Mn, resulting in a fall of 10% on a YoY basis. This was on the back of lower sales of base units, i.e., capital equipment, which was partially offset by higher consumable sales.


NAN’s Financial Snapshot (Source: Company Reports)
 
Growth from Trophon to Support NAN: Going further for FY 2019, the firm expects an ongoing growth in the Trophon installed base capacity in their key markets. In FY 2019, the primary focus of the company would be on successful introduction of the trophon2 technology.  Also, adoption in Europe is going to rise driven by the MES (Management Equipment Service) program in the UK which may lead to robust growth in the FY 2019. Moreover, the new guidelines & introduction of Trophon 2 in Germany & France will act as a catalyst for the broader adoption.

Meanwhile, if we look at the past six months’ performance, the stock has receded by 7.65% as on 18 January 2019. However, considering broader adoption of Trophon 2 gaining traction in the FY 2019 & the due upgradation of ERP units, we maintain our “Hold” recommendation on the stock at the current market price of $3.020.
 

OncoSil Medical Ltd

Anticipated commercialization of OncoSil and encouraging clinical study results: OncoSil Medical Ltd (ASX: OSL) had registered a net loss post-tax of $8,539,542 for the FY 2018 vis-à-vis the net loss for the FY 2017, was $7,016,079. This rise in the loss was predominantly on account of the increase in the research & development expenditure during the year.
 

 
OSL’s Oncosil Commercialisation Steps (Company Reports)
 
The company has made strong footholds in research and they are performing to cure pancreatic cancer. For the quarter ended 30 September 2018, the firm has got highly encouraging results from the intermittent analysis done on the PanCO study. The cash balance for the quarter ended was recorded at $16.1 Mn.  On the financial parameters front, for FY 2018, the company’s other income had risen from the levels of $3.75 Mn to $4.59 Mn which was on account of the rise experienced in the R&D tax incentive accrued to them measured at the fair value.

Strategic Partnerships Licensing Agreements Might Support OSL’s Growth Momentum: The company had managed to tap the licensing agreements and it had entered into partnerships which would underpin the company’s growth prospects moving forward. Additionally, the company might also benefit from the large global commercial opportunity. The global pharmaceutical players are also getting inclined towards the broader sector. Meanwhile, the stock price has fallen 19.05% over the past six months as on 18 January 2019. Hence considering the anticipated commercialization of OncoSil and encouraging clinical study results, we maintain our “Speculative Buy” recommendation on the stock at the current market price of $0.170.
 

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