Given the underperformance of UK smallcaps over the past 3 years, it's currently very difficult to please many battle-scarred investors. However, this morning's landmark news from Verici Dx (£16.5m mrkcap at 7.1p) should help at least put a small smile on the face of even the most beaten-down shareholder.
Why?
Well, today this specialist in kidney transplant diagnostics said that partner Thermo Fisher Scientific had officially launched its One Lambda Pre-Transplant Risk Assessment (PTRA) - which is powered by VRCI's patented pre-transplant blood test, Clarava.
The PTRA utilises an mRNA signature of 29 markers to stratify patients into high and low-risk categories. This is important because people with high PTRA scores are around 6 times more likely to experience early acute rejection than patients with low-risk scores, a statistically significant finding.
Chris McCloskey, Director Transplant Services at Thermo Fisher Scientific, commenting: "Our One Lambda PTRA is the first test of its kind to provide a risk score for early acute rejection based on a patient’s unique gene profile prior to transplant. Data from this test may help clinicians make more informed decisions about post-transplant management and better balance a patient’s risk of rejection against the adverse effects of over-immunosuppression".
To me, this announcement is not only another major endorsement of VRCI's cutting-edge proprietary technology by an industry heavyweight, but it should also allow the full $5.0m under its global licensing deal to be received as planned by Nov'24 - whilst similarly enabling further royalties to be paid as transplant tests are performed in TMO's labs.
Sure, VRCI is not yet profitable (H1 24 EBITDA - $1.1m), yet this is within sight. Based on estimated 90% gross margins and $9m of annualised fixed costs (ex D&A), Singer Capital Markets are forecasting sales to climb to $7.5m and $13.0m respectively for this year and next (vs $1.0m LY), with adjusted EBITDA coming in at $1.3m for 2025. Likewise, they have a target price of 20p/share.
Net funds closed June 2024 at $7.0m following a $8.2m placing at 9p/share in February, extending VRCI's cash runway into 2026.
CEO Sara Barrington adding: "I am delighted to see that the PTRA Assay is being launched to the clinical community so swiftly and look forward to seeing how it can help transform patient outcomes. Together with the successful transfer of technology, this demonstrates our Company's commitment to timely and effective collaboration when executing these types of agreements."
VRCI's technology is unique because the 'RNA signature' platform assesses (re 79% Positive Predictive Value for Tutivia) the risk of organ rejection BEFORE damage has actually occurred. In comparison, most (if not all) other rival tests rely on measuring 'debris' in the bloodstream - ie once organ damage has already occurred, which is frankly too late.
VRCI shares gained 8.6% on the announcement.
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