Immuron Limited

IMC Details

Meeting with FDA for Guidance on Two Phase 2 trials: Immuron Limited (ASX: IMC) is a biopharmaceutical company which is focused on oral immunotherapy treatments using dairy-derived antibody products for humans relating to gastrointestinal health and liver diseases. As on 10 June 2020, the market capitalization of the company stood at $14.71 million. The company has recently announced that Naval Medical Research Center (NMRC) has requested a Pre-IND meeting with the U.S. Food and Drug administration regarding its new investigational drug which treats moderate to severe campylobacteriosis and ETEC infections.

Global Sales Up by 60%: For the third quarter ended 31 March 2020, worldwide product sales witnessed a YoY growth of 60% to $983K, up from $616K in Q3 FY19. In the same time span, sales of Travelan® increased by 35% in Australian market to $475K and the growth trajectory increased by 50% in the US to $412K. During the 1H20, revenue of the company went up to $1.55 million from $978k in the pcp and gross profit increased to $1.12 million from $746k in 1H19.

 
1H20 Financial Highlights (Source: Company Reports)

Impact of COVID-19: A consumer awareness campaign, which was launched in the USA in mid-February for the publicity for Travelan® was cut short due to the COVID-19 pandemic. The international travel restrictions are being implemented in all the markets where Travelan® is sold, and hence is likely to impact on Travelan® sales in Q4 of FY20. However, the company is taking steps to increase overall revenues to help mitigate the anticipated decrease. The company has taken significant cost reductions measures to preserve its cash position.

Stock Recommendation: The sales of Travelan® has witnessed a significant increase in the past few months. However, the increasing spread of the COVID-19 and the travel restrictions are likely to impact the sales in the fourth quarter. As per ASX, the stock of IMC gave a negative return of 40.71% in the past six months and a negative return of 1.19% in the last one month. The stock is also inclined towards its 52-week high of $0.450 and thus seems a little overvalued. Considering the current trading levels, volatile returns in the past six months, and the probable impact of COVID-19 on the sales trajectory, we suggest investors to wait for the price correction, hence, we have a watch stance on the stock at the current market price of $0.300, up by 261.446% on 10 June 2020.


IMC Daily Price Chart (Source: Refinitiv, Thomson Reuters)    

Wellness and Beauty Solutions Limited

WNB Details

WNB Receives Follow up Purchase Orders for Elle and Micro19 Portfolios into Asia: Wellness and Beauty Solutions Limited (ASX: WNB) is a non-surgical medical aesthetics services company that provides anti-aging cosmetic and body-sculpting treatments. As on 10 June 2020, the market capitalization of the company stood at $7.56 million. The company has recently announced that The Giving Brands Company Pty Ltd, has received additional purchase orders for $600k for the sale of its brands into Asia. The purchase orders range from ELLE Makeup, ELLE kids, ELLE Baby and MICRO19 for retailers in Singapore and Hong Kong.

Quarterly Highlights (For the Period Ended 31 March 2020): For the third quarter ended 31 March 2020, cash receipts of the company stood at $3.058 million. This result reflects the challenging retail environment because of bushfire crisis in Australia, which was compounded by the COVID-19 pandemic. For the quarter, the company reported a reduction of 11.3% in net operating cash outflows to $2.12 million.


Quarterly Cash Used in Operating Activities (Source: Company Reports)
 
WNB Raises $1.3 Million in a Placement: The company has raised $1.3 million in a Share Placement wherein it issued ~163 million ordinary shares at $0.008 per share. The funds raised will be used for working capital for sales, distribution, and marketing across the GBCo brand portfolio, including MICRO19. The company has also entered a Deed of Variation with the remaining holders of unlisted convertible notes to extend the term of the notes, with a principal value of $1.62 million to 15 October 2021. 

Stock Recommendation: As per the COVID-19 regulations of the Government, the clinical spa will remain close for the duration of Q4'20. However, the company is confident about the strong consumer demand for hygiene products into the future. As per ASX, the stock WNB gave a negative return of 40% in the past six months and a negative return of 33.33% in the last one month. The stock is trading very close to its 52-weeks’ low level of $0.006 but holds a limited potential for growth. Considering the current trading levels, and uncertain outlook due to the increased spread of COVID-19, we suggest investors to keep an eye on the business activities and have a watch stance on the stock at the current market price of $0.006 on 10 June 2020. 

 
WNB Daily Price Chart (Source: Refinitiv, Thomson Reuters)

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