As another gauge of the poor economic climate, even ‘best-in-class’ immuno-diagnostics firms like Oncimmune ONC are experiencing elongated sales cycles.
Equally though, you can’t keep a high quality business like ONCI down forever, as the Board reports FY'22 revs +3.7% to £3.9m vs £3.7m LY with new orders for its world-beating ‘ImmunoINSIGHTS’ platform starting come through signing 18 new contracts in FY’22 (vs 9 LY & 3 FY’20), but also increasing penetration into the top 15 global Biopharma groups.
Not an insignificant achievement, given their extensive procurement and onboarding requirements, where typically only the very best suppliers make the cut.
Better still, ONC’s pipeline is climbing by £0.75m/month and presently stands at £11.0m. In turn, providing >40% revenue cover for FY'23 - including £1.8m within the execution phase, an est £2.3m for Q1 & a further £2.5m in Q2.
Elsewhere ONC’s EarlyCDT Lung cancer test has received Medicare coverage in the US, at c.10x its current selling price (re royalties from partner Biodesix, Inc.). Plus, as another excellent endorsement of the technology - Philips plans to incorporate the data from Biodesix’s tests into its lung cancer patient management system.
WRT the balance sheet, gross cash closed June at £2.53m (vs net debt £8.16m) with liquidity further bolstered by the renewal of the IPF Partners banking facility in August.
Together, the Board believes this will provide sufficient funding to convert the pipeline into signed contracts, revenue & cash. What’s more, the EarlyCDT division has been restructured (£0.5m annualised savings) & is now EBITDA profitable.
CEO Adam M Hill commenting: "Whilst the market conditions over the past 12 months have been undoubtedly challenging, we are encouraged by the momentum of ImmunoINSIGHTS. The importance of our autoantibody profiling service is evident in the growing list of blue-chip clients.”
"Furthermore, the £11m pipeline is growing at £0.75m a month, & the Board has confidence in FY23 being an inflexion year for the group."
View from Vox
With M&A a distinct possibility, Oncimmune clearly has an exciting future ahead and we suspect many new investors may feel the current depressed share price may present an attractive entry point.
Follow news and updates from Oncimmune here