Medadvisor Limited

MDR Details

MedAdvisor Limited is a medical technology company providing software platforms to manage prescription medication use. Its cloud-based product connects pharmacies and other healthcare professionals. Its products include MedAdvisor App and the PlusOne pharmacy platform.

3QFY22 Update:

• MDR posted a 96.1% uptick in operating revenues reaching $49.9 million for the nine months period ending March 31, 2022, with customer receipts hiked by 84.4% to $18.2 million. It had realized $7.4 million in revenues from the U.S., mainly led by COVID-19 awareness programs, which went live, and revenue to be recognized in Q4FY22.
• NZ roll-out is going as per the plan, and the company migrated with 54% of Green Cross Health’s pharmacy network.
• Australia and the rest of the world market delivered a 70.4% topline growth in Q3FY22, aided by a contract with Australian Pharmaceutical Industries that had seen an increase in network capacity.
• Net operating cash inflows stood at $3.5 million in Q3FY22 and $2.3 million during YTD for nine months ending March 31, 2022.
• It had closed the period with a cash balance of $8.8 million. It had over $5.3 million available under credit facilities.

Revenue Split for Nine Months Period (Analysis by Kalkine Group)

Key Risks: Increasing regulation in the healthcare market, changing population demographic, intensified competition in the Healthcare IT is some of the near-term headwinds.

Outlook: MDR to leverage from the recently acquired Adheris to enhance its digital healthcare offering with a leading pharmacy network in the U.K. market. The company is targeting revenue of $72-74 million in FY22 and a gross margin of ~53-54%.

Valuation Methodology: Price-to-Sales Multiple Based Relative Valuation (Illustrative)

 Source: Analysis by Kalkine Group

*% Premium/(Discount) is based on our assessment of the company’s NTM trading multiple after considering its key growth drivers, economic moat, stock's historical trading multiples versus peer average/median, and investment risks. 

Stock Recommendation: The stock of MDR has been corrected by ~42.67% in the past three months. The stock reached a new 52-week low price of $0.215 as of May 2, 2022. The stock has been valued using a Price-to-Sales multiple-based illustrative relative valuation and arrived at a target price of low double-digit upside (in % terms). The company can trade at a slight premium to its peers, considering a 96.1% uptick in operating revenues for nine months ending March 31, 2022. For the purpose of valuation, peers such as Doctor Care Anywhere Group PLC (ASX: DOC), Ansell Ltd. (ASX: ANN), and ImExHS Ltd. (ASX: IME) have been considered. Considering the scalability benefits from the acquisition of Adheris, healthy ARR growth of 24% in Q3FY22 in Australia and the rest of the world market, decent cash balance, upside potential as indicated by the valuation, and key risks associated with the business, we recommend a ‘Speculative Buy’ rating on the stock at the closing market price of $0.215, as of May 02, 2022, down ~14%. Markets are trading in a highly volatile zone currently due to certain macro-economic issues and geopolitical tensions prevailing. Therefore, it is prudent to follow a cautious approach while investing.

MDR Daily Technical Chart, Data Source: REFINITIV 

Bionomics Limited

BNO Details

Bionomics Limited operates as a clinical-stage biopharmaceutical company developing drug candidates for the treatment of central nervous system disorders.

Material Business Updates:

• BNO received licensing revenue of $263.63k from its participation in the Cancer Therapeutics CRC (CTx). The CTx contract has a revenue potential of US$460 million.
• The company has initiated phase 2 clinical trials to evaluate BNC210 for the treatment of Social Anxiety Disorder. It is expecting to realize revenues by 2022-end.
• BNO secured US$23 million in funding through the issuance of 243,300 American Depository Receipts.
• For Q3FY22, BNO witnessed a 13.7% dip in R&D spending on the ATTUNE and PREVAIL studies.
• It had incurred $3.65 million in operating cash outflows. BNO closed the period with a cash balance of $39.58 million as of March 31, 2022.

Cashflow Summary for Nine Months Period Ending March 31, 2022 (Analysis by Kalkine Group)

Key Risks: Increasing regulatory scrutiny may delay the completion of trials. BNO is a clinical-stage company with nil revenues, delay in drug development may drain cash resources.  

Outlook: BNO is progressing on BNC210 clinical studies for the treatment of Social Anxiety Disorder and chronic treatment of Post-Traumatic Stress Disorder. The company believes that it has adequate cash and liquidity to fund clinical studies.

Valuation Methodology: Price-to-Sales Multiple Based Relative Valuation (Illustrative)

 Source: Analysis by Kalkine Group

*% Premium/(Discount) is based on our assessment of the company’s NTM trading multiple after considering its key growth drivers, economic moat, stock's historical trading multiples versus peer average/median, and investment risks. 

Stock Recommendation: The stock of BNO has been corrected by ~30.33% in the past three months. The stock just recovered from its 52-week low price of $0.059. The stock has been valued using a Price-to-Sales multiple-based illustrative relative valuation and arrived at a target price of low double-digit upside (in % terms). The company can trade at a slight discount to its peers, considering negative operating cash flows in Q3FY22. For the purpose of valuation, peers such as Imugene Ltd. (ASX: IMU), Antisense Therapeutics Ltd. (ASX: ANP), and Pro Medicus Ltd. (ASX: PME) have been considered. Considering its participation in the Cancer Therapeutics CRC (CTx) program, recent fundraising, adequate cash balance, upside potential as indicated by the valuation, and key risks associated with the business, we recommend a ‘Speculative Buy’ rating on the stock at the closing market price of $0.062, as of May 02, 2022, up ~1.64%. Markets are trading in a highly volatile zone currently due to certain macro-economic issues and geopolitical tensions prevailing. Therefore, it is prudent to follow a cautious approach while investing.

BNO Daily Technical Chart, Data Source: REFINITIV 

Note 1: The reference data in this report has been partly sourced from REFINITIV.

Note 2: Investment decision should be made depending on the investors’ appetite on upside potential, risks, holding duration, and any previous holdings. Investors can consider exiting from the stock if the Target Price mentioned as per the Valuation has been achieved and subject to the factors discussed above.

Technical Indicators Defined: -

Support: A level where-in the stock prices tend to find support if they are falling, and downtrend may take a pause backed by demand or buying interest.

Resistance: A level where-in the stock prices tend to find resistance when they are rising, and uptrend may take a pause due to profit booking or selling interest.

Stop-loss: It is a level to protect further losses in case of unfavourable movement in the stock prices.

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