Commercialising break-through medical science can often be frustratingly slow, even for major innovations. That's partly because, simplistically, there's a natural inertia built into the healthcare system. Doctors are inherently cautious and need time to familiarise themselves with and fully deploy the latest technology. Equally, US insurers & public bodies liek Medicare and Medicaid must also agree to pick up the costs. Then the hockey-stick growth begins and the product ultimately becomes the industry's de facto standard.

Unfortunately, however, both of these factors have impacted the initial pace of adoption of Verici Dx’s (VRCI) best-of-breed kidney transplant diagnostic Tutivia. Consequently at today’s interims, management reduced their near term revenue projections, but reiterated that the company’s mid-2024 cash runway should be unaffected thanks to higher research revenues.

Moreover, Tutivia test volumes are now accelerating, albeit from low levels, as more transplant centres come on stream. The company also expects to receive full Medicare reimbursement under Local Cover Determination by Q1 2024, which should similarly boost turnover.

On the R&D front, significant progress is being made as well, with its unique pre-transplant diagnostic Clarava on track for commercial launch in Q4 2023. Elsewhere, initial sales of its third test - Protega, which aims to predict the risk of kidney fibrosis and long-term graft failure - are slated for 2025.

CEO Sara Barrington commented: "The clinician response to our 1st product, Tutivia, following its commercial launch in Jan’23 clearly demonstrates how much they value the key benefits and recognise the strong differentiating features. We are also excited to have announced a 2nd successful product, Clarava following the recently completed clinical validation study showing excellent results. We also completed enrolment for the validation study on our 3rd product, Protega - which completes the end-to-end testing for the portfolio as we look ahead."

"Although the timing effects on early adoption are frustrating, we have been able to make savings in other areas and are focused on research collaborations to help build a solid platform for future growth. At the same time, we are continuing to deliver on our strategy of transforming kidney transplant patient outcomes, as we move further into commercialisation”.

So what does all this mean? Well, given Tutivia's “outstanding clinician feedback” I’m highly confident Verici Dx's suite of cutting edge kidney transplant diagnostics will eventually become a major success, and provide the board with several attractive options, both internal and external, to finance its growth trajectory for years ahead.

Broker Singer Capital Markets is forecasting FY23 turnover of $0.3m (from $0.9m previously) climbing to $4.9m  in 2024, and has a BUY rating with a forecast closing net cash positio at December 2023 of $0.8m.