Actinogen Medical Limited

Company exceeds patents target, 186 patents enrolled into phase II trial: Actinogen Medical Limited (ASX: ACW), formerly known as Actinogen Ltd is an Australian based biotechnology company. The company is engaged in the treatment of age-related neurodegenerative diseases and Alzheimer.Recently, the group disclosed its 1HFY19 results wherein revenue and other income de-grew by 68.6 per cent and amounted to $ 79,829 in 1HFY19 as compared to the prior corresponding period (PCP). Resultantly, Net loss after tax came in at $7.13 Mn in 1HFY19.Even though the company posted lower revenue and increased loss over the corresponding period, ACW increased its R&D expenses to $6,268,096 in 1HFY19 vs. $3,026,577 in 1HFY18 an increase of 107.1%. The company is aggressively investing in its R&D capabilities which might turnaround top-line growth in the long-run.

 
1HFY19 Income Statement (Source: Company Report)

On the other hand, the company was able to raise $7,846,350 from issue of fully paid equity shares. Of this, $690,000 was raised in the proceeds from the exercise of options during the period; whilst the remaining $7,156,350 was through the Private Placement and Share Purchase Plan. Moreover, the company has received a R&D tax rebate of $3,158,000 for 2017/2018 financial year, and this aided the cash position of the company. Over the past six months, the company has initiated additional studies of XanADu and the results of the same is expected in May/June of 2019. This could lay foundation for the next stage of Xanamem’s development, add to its data package and defining the effectiveness and safety of Xanamem in Alzheimer’s treatment. During 1HFY19, a number of new independent studies lent strong support to the Company’s cortisol hypothesis, which underpins Xanamem’s development. Two studies published in scientific journals validate the evidence supporting the association between stress and age-related cognitive deterioration. Xanamem is designed to block the production of cortisol in the brain and hence these studies validate and support the development of Xanamem.

Moreover, the company declared a test involving dose increase safety study of Xanamem in healthy ageing volunteers in February 2019. XanaHES is designed to assess the safety of higher doses of Xanamem. The results are expected in Q2 2019, around the same time phase II XanADu Alzheimer’s study results will be announced. These results are major catalysts for the business over the next six to 12 months. From the analysis standpoint, current ratio significantly increased from 6.35% in FY17 to 17.62x in FY18 with nil debt. It reflects a healthy balance sheet which will support to execute growth plans of the company in years to come.

In the meantime, the stock has generated a YTD return of 13.33% but it has fallen about 12.07% in the past one month (as at March 05, 2019) and the volatile trend is continuing. Given the mix of scenario, we presume that the fundamental triggers are dependent on the anticipated test results. Hence, considering the speculative nature, we have a watch stance on the stock at the current market price of $0.053 (up 3.922% on March 06, 2019), as we await further growth catalysts that can mitigate the prevailing volatility.
 

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