Stocks’ Details

Imagion Biosystems Limited

Appointment of Company Secretary: Imagion Biosystems Limited (ASX: IBX) is involved in the development of a new non-radioactive and safe diagnostic imaging technology. The market capitalisation of the company stood at $189.68 million as on 18^th January 2021. Recently, the company announced that Ms Jovanka Naumoska has resigned from the position of Company Secretary of Imagion, which became effective on 8^th December 2020. Further, IBX has appointed Mr Geoff Hollis as the new Company Secretary. The company has finished an oversubscribed placement and raised $6 million, which was strongly supported by institutional investors. IBX would use these funds to ramp up its development plans as well as for the beginning of the investigation in manufacturing scale-up of its nanoparticle technology.

Financial Highlights: During the quarter ended 30^th September 2020 (Q3 FY20), the company recorded cash outflow from operating activities of $1.8 million. IBX also raised $4.7 million through placement, which was supported by existing domestic and overseas institutional and sophisticated shareholders. For the half-year ended 30^th June 2020, IBX recorded revenue and other income of $117,093 as compared to $300,674 in 1H FY19. In addition, loss for the half-year amounted to $1,705,332 against $1,035,084 in 1H FY19.

Cash Flow (Source: Company Reports)

Outlook: The company expects FY21 to be one of the most exciting and important years of its history. IBX has attained significant progress in commencing the first-in-human study for HER2.  

Stock Recommendation: The company closed the Q3 FY20 with the increased cash balance of the company $8.3 million. In the last three and six months, the stock of IBX has surged 134.17% and 255.76%, respectively. As a result, the stock is inclined towards its 52-week high level of $0.200. In addition, the stock is trading at a price to book value multiple of 63.8x against the industry median (Healthcare Equipment & Supplies) of 5.3x on TTM basis. Thus, it seems that the stock is overvalued at the current trading level. On a technical analysis front, the stock has a support level of ~$0.125 and a resistance level of ~$0.190. Therefore, considering the steep price movement in the past few months, current trading level and valuation on TTM basis, we are of the view that most of the positive factors have been discounted at the current trading level and give an “Expensive” rating on the stock at the current market price of $0.180 per share, down by 5.264% on 18^th January 2021. We further suggest investors to wait for a better entry-level.

PainChek Ltd

Approval from Health Canada: PainChek Ltd (ASX: PCK) is engaged in the development and commercialisation of mobile medical applications. The market capitalisation of the company stood at $85.63 million as on 18^th January 2021.  On 19^th November 2020, the company has received regulatory clearance from Health Canada and received a licence for manufacturing Class I Devices for Distribution. The clearance from Health Canada allows the company to enter $5 billion in-home health and support services market in the country. For the quarter ended 30^th September 2020, the company recorded revenue amounting to $750K, out of the receipt of $1.25 million for second quarterly license milestone as per the government-funded licenses grant. As on 30^th September 2020, the company had 795 Residential Aged Care (RAC) Facilities and 66,887 approved beds under annual PainChek® license, which reflects a rise of 10% and 9%, respectively.

Approved Beds (Source: Company Reports)

Outlook: Looking forward, the company would continue with the commercialisation of the PainChek® technology in Australia and the UK as the priorities. In addition, the company would also assess global opportunities.

Stock Recommendation:  Following the receipt of FY20 R&D Tax Incentive of $979,621, the company is in a decent cash position of around $13 million. The stock of PCK has corrected 5.06% and 28.57% in the last one and three months, respectively. As a result, the stock is trading towards its 52-week low level of $0.061, offering decent opportunities for accumulation. Also, the company has maintained a trend of nil debt to equity in the span of the past few years. On a technical analysis front, the stock has a support level of ~$0.061 and a resistance level of ~$0.105. Hence, considering the decent performance in September 2020 quarter, regulatory clearance from Health Canada, healthy balance sheet, current trading level and key risks associated with the business, we give a “Speculative Buy” recommendation on the stock at the current market price of $0.074 per share, down by 2.632% on 18^th January 2021. 

Osprey Medical Inc

Decent Growth in Sales: Osprey Medical Inc (ASX: OSP) is involved in the development and commercialization of its proprietary DyeVert System. The market capitalisation of the company stood at $34.09 million as on 18^th January 2021. In the month of November 2020, the company has inked an Independent Sales Agency (ISA) agreement with BioCore Inc, wherein the sales reps of BioCore would be strategically deployed in 8 new states in the US in regions which are currently outside of Osprey’s existing direct salesforce coverage. During the September 2020 quarter (Q3 FY20), the company recorded sales revenue of US$379k, reflecting a rise of 68% over Q2 FY20. After the low sales volume in July 2020 due to COVID-19, OSP experienced a bounce-back in sales during August and September 2020 and recorded growth of 40% and 50%, respectively. As a result of cost reduction program, the company witnessed an improvement of 65% and 48% in operating cash outflows and net cash used in operations to US$2.9 million and US$2.7 million, respectively.

Cash Flows (Source: Company Reports)

Stock Recommendation: The company expects its direct salesforce to continue to penetrate existing regions in the years to come. In early 2021, the company has planned expansion of Independent Sales Agency.

Stock Recommendation: As on 30^th September 2020, the company had a cash balance of US$7.0 million. The stock of OSP has corrected 25.86% and 54.25% in the past three and six months, respectively. On a TTM basis, OSP has EV/sales multiple of 5.9x, which is lower than the industry median (Healthcare Equipment & Supplies) of 6.8x. In addition, the stock is trading at a price to book value multiple of 2.7x against the industry median (Healthcare Equipment & Supplies) of 4.6x on TTM basis. Thus, it can be said that the stock is undervalued at the current trading level. On a technical analysis front, the stock has a support level of ~$0.009 and a resistance level of ~$0.06. Hence, in light of the decent growth in sales, decent outlook, and key risks associated with the business, we give a “Speculative Buy” recommendation on the stock at the current market price of $0.024 per share, up by 14.285% on 18^th January 2021.

Comparative Price Chart (Source: Refinitiv, Thomson Reuters)

Disclaimer  

The advice given by Kalkine Pty Ltd and provided on this website is general information only and it does not take into account your investment objectives, financial situation or needs. You should therefore consider whether the advice is appropriate to your investment objectives, financial situation and needs before acting upon it. You should seek advice from a financial adviser, stockbroker or other professional (including taxation and legal advice) as necessary before acting on any advice. Not all investments are appropriate for all people. Kalkine.com.au and associated pages are published by Kalkine Pty Ltd ABN 34 154 808 312 (Australian Financial Services License Number 425376). The information on this website has been prepared from a wide variety of sources, which Kalkine Pty Ltd, to the best of its knowledge and belief, considers accurate. You should make your own enquiries about any investments and we strongly suggest you seek advice before acting upon any recommendation. Kalkine Pty Ltd has made every effort to ensure the reliability of information contained in its newsletters and websites. All information represents our views at the date of publication and may change without notice. To the extent permitted by law, Kalkine Pty Ltd excludes all liability for any loss or damage arising from the use of this website and any information published (including any indirect or consequential loss, any data loss or data corruption). If the law prohibits this exclusion, Kalkine Pty Ltd hereby limits its liability, to the extent permitted by law to the resupply of services. There may be a product disclosure statement or other offer document for the securities and financial products we write about in Kalkine Reports. You should obtain a copy of the product disclosure statement or offer document before making any decision about whether to acquire the security or product. The link to our Terms & Conditions has been provided please go through them and also have a read of the Financial Services Guide. On the date of publishing this report (mentioned on the website), employees and/or associates of Kalkine Pty Ltd do not hold positions in any of the stocks covered on the website. These stocks can change any time and readers of the reports should not consider these stocks as personalised advice.