Turnarounds are difficult even at the best of times. Hence, it's vital that the leadership team is experienced, capable and hungry - because invariably there will be challenges and tough decisions to make.
To me, leading autoantibody profiling firm Oncimmune (ONC) fits the bill.
Indeed, since taking the helm only 12 months ago, CEO Martin Gouldstone has refocused the business, slimmed down the cost base, and crucially re-energised the sales team - securing a series of contract wins with big pharma to help them discover, test, and further improve their drugs.
Today came more positive news, with the company saying that it had signed a $1.5m (£1.16m) deal with an existing top 10 group - after successfully completing a "breakthrough" pilot using its high throughput bead-based platform in order accurately profile Immunoglobulin E (IgE) autoantibodies in blood serum. This new contract is one of ImmunoINSIGHTS' largest ever - demonstrating its ability to secure significant follow-on work.
The agreement is scheduled to be completed over next 6 months, with the majority of the revenue helping to underpin Cavendish's (house broker) August FY25 sales target of £6.9m.
In terms of FY24 trading, the Board reiterated its revenue guidance of £3m (vs £1.2m H1'24 and £1.15m LY) and is aiming to become profitable (Cavendish £0.8m adjusted PBT vs -£3.2m FY24) in FY25.
Better still, given the turnaround is taking shape nicely - the next task is to reprofile its capital base. Here, ONC has commenced discussions with IPF Management about amending the terms of its €6m credit facility, with the goal of deferring repayments to enable greater organic investment.
At 11p, the stock trades on modest multiples of 1.7x FY25 EV/sales and 7.7x EV/EBITDA. Cavendish have a target price of 50p/share.
CEO Martin Gouldstone commenting: "I am delighted that our world-leading scientific team has managed to demonstrate our ability to measure IgE, which is much harder to detect in blood serum than other immunoglobulins, using our high-throughput platform. Not only did this enable us to win a major new contract with an existing long-term Top 10 Pharma customer, it also opens a new technological offering, in line with our strategic goals.
We are confident that, with this win and continued momentum of contracts, we are in a strong position to meet our targets for FY24 and beyond, with profitability expected in FY25."
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