Last year Biovica was last year one of the “biggest looser” positions. We believe Biovica has the potential to become one of the biggest winners. Pareto in its research stated:
… By no fault of its own, the flood of COVID-19 diagnostics has stalled Biovica’s submission for over 1.5 years, causing a continuous decline in the share price ….. As we believed in 2020 that DiviTum will reach FDA approval based on the produced clinical evidence and that it will reach significant sales due to the clear value proposition within a clear patient population (treatment monitoring), we continue to do so today.
We are of the same view. We have doubled our stake in Biovica through the capital raise and subsequent purchases.
Highlights of Pareto Securities research report on Biovica:
Long and tough road behind
By no fault of its own, the flood of COVID-19 diagnostics has stalled Biovica’s
submission for over 1.5 years, causing a continuous decline in the share price.
With the FDA approval finally obtained in July 2022, the market conditions dictated a strong discount for autumn 2022’s rights issue while causing a 37.5% dilution – beating the share price down to the current low levels.
Clear value in HR+ metastatic breast cancer & strong sales team
DiviTum is the odd outlier among many blood-based tests, it works and delivers the most critical information obtained from imaging techniques such as CT scans and MRI, if a tumor is growing or not, easier, cheaper, and earlier.
Sales estimates While we modelled a slow ramp up, we expect the company to become profitable in 2025 and exceed USD 100m in sales by 2029. We were very conservative this time and there is a good chance that the company will beat our estimates.
Clinical data strenght
The topline conclusion from DiviTum’s clinical data within MBC is that it can predict whether a patient is not progressing within the coming 30 days (treatment is working) with 96.7% accuracy and the coming 60 days with 93.5% accuracy. This indicates that frequent testing allows for a sort of “live monitoring” of what the cancer is doing. That this is not common is
supported by the fact that it is the first such blood-based biomarker approved by the FDA.
Key points and 2023 outlook
CLIA lab certification granted with sales to start this month
On 8 February, Biovica announced that the company’s laboratory in San Diego has received the CLIA certification from California Department of Public Health. The certification allows the lab to handle human blood samples and marks the final milestone before DiviTum’s US market launch.
Early adopters call (KOLs) expected within three months after launch
As part of Biovica’s market launch activities, we expect the company to hold a KOL / early adopters call within three months after launch. This will provide insight to the interest in DiviTum and help with gauging its market potential.
Capital Markets Day expected in 1H 2023 with update on commercial launch progress
Besides the Q3 2022/2023 report on 16 March 2023, we also expect Biovica to hold its Capital Markets Day in the first half of 2023 with focus on providing an investor update on how the commercial launch in the US is going as well as potentially laying out the strategy for Europe.
Disclosure:
The goal of the blog is to provide investment ideas for further research. I/we have a beneficial position in the shares discussed above either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article. The article does not represent investment advice. Please do your own research before making any investment action.
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