Biovica: The Most Disruptive Company Among Scandi Pharma

Biovica has the potential to change the way the Breast Cancer is treated and newly also change the way cancer drugs are developed.

Biomarker testing is the future of the Cancer treatments. Biovica is the global pioneer and is leading the company in the area. It has the first FDA-approved cancer biomarker test for Breast cancer. The product launch is in full speed.

Biovica´s breast cancer test has great utility for the patients as well as the costs of the treatment costs. Biovica biomarker breast cancer test can detect cancer progression at least 60 days earlier than imaging. And 3-10 times cheaper.

Great progress in the last 12 months:

• FDA Approval secured in July 2022
• Medicare reimbursment PLA code (needed for Medicare reimbursement) obtained last quarter – Medicare covers 50% of US breast cancer patients. The reimbursements using this code will start on 1 October 2023.
• Three private insurance companies contracted that cover millions of US patients signed up this quarter.
• The first US sales recorded this quarter.
• The first reimbursements from Medicare were processed in the quarter.

Why Q1 call result in 20% share price drop:

• The market expectations were too high.
• The market expected higher revenues and possibly the first hospital contract announcement

What the market did not hear?

• There were very strong statements by the CEO, the head of the US sales, and the head of the pharma projects
• “We will sign the first hospital contract in the very near future during this quarter”
• “We will sign at least 10 hospital contracts during this year. Our hospital contract pipeline supports this”
• “The hospital contracts often mean contracts with hospital chains with 15 hospitals or so.”
• “We expect US sales to pick up in our third quarter”
• “During the second half of the year, I also expect to see a major contribution to our sales from Europe”
• “We are working with pharma companies. that are developing new cancer drugs. During the summer, we signed yet another agreement with a new customer and started up several new projects. We are anticipating higher revenue from that already during this financial year.”
• “A great deal of work has gone into securing good funding over the summer, and we have several alternatives that we are in the process of finalizing. The significant progress we have made in the various commercial areas in recent months is certainly a positive contributor to this process.”
• “We are not paying for the Yale study. We should receive a payment for this.” – The University is testing how taking more medications affects treatment effectiveness – Yale is using Biovica´s TKa to measure the effects.

Valuation

In my experience, past trading range indicates share price potential. To illustrate – if a stock had a trading range of USD10 – USD100 and is now trading at USD 20, you have based on the historical trading range USD10 downside and 80 USD upside. This means 8:1 profit/loss potential.

Biovica is making great progress. It is in the best position it ever has. Despite that, it is trading at the bottom of its historical trading range. See the below graph of the market capitalization to illustrate. The graph shows 5 times upside potential and limited downside.

Strong catalysts ahead

There are strong catalysts ahead:

• Announcement of the first hospital contract – this would be a major confidence rubber stamp for the company. The same way Medicare was this quarter.
• PLA Coder reimbursement – 1St October 23
• Start of the US sales 3Q23
• European sales – second half of 2023
• Securing of funding – second half of 2023

What is the market missing

The market is not appreciating the importance of pharma collaborations. Pharma companies are contracting with Biovica to provide them with specific essays that the pharma companies will be using to test their new cancer medications. It has three important implications for the company and its investors:

• Biovica will change the way cancer treatments are developed – the costs for the development will be reduced and the testing will be faster
• It is a great vote of confidence in Biovica´s product. Pharma companies will be using Biovica for testing their new products. What stronger rubber stamp could anybody want?
• Material revenue stream – per unit costs of those tests must be materially higher than tests for the public. The company says that it has 18 projects with Tier 1, 2, and 3-sized pharma companies. Biovica predicts this will be a material revenue stream for the company already this year.

Despite the above, no analysts have focused much on the above. It is not reflected in the share price.

Summary

Biovica is disrupting the way breast cancer is treated. It has achieved significant progress. Material catalysts ahead. The sell-off over the last two days is unjustified. We are buyers.

Resources

Link to the presentation, Webcast, and Q2 Report

Biovica International AB – Financial reports

Other news

Pyrum Innovations, one of the most interesting German companies announced a webcast. The company is commissioning its second plant right now. The webcasts should include an update.

Monday, 18 September 2023
Start: 10.00 a.m. (CEST)
Duration: 60 minutes
Language: English
Registration link for participants: https://bit.ly/3PaTkh7

Pyrum Innovations is active in the attractive recycling market for end-of-life tyres with its patented pyrolysis technology.

Pyrum’s pyrolysis process is largely energy self-sufficient and, according to the Fraunhofer Institute, saves significantly more CO₂ emissions than today’s standard recycling processes for end-of-life tyres – especially compared to incineration in cement plants – and produces new raw materials such as pyrolysis oil, gas and recovered carbon black from the waste used as input materials. In this way, Pyrum closes the recyclable material loop and pursues a completely sustainable business model.

As a pioneer, Pyrum Innovations AG was the first company in the end-of-life tyre recycling sector to receive REACH registration from the European Chemicals Agency (ECHA) for the pyrolysis oil it produces. This means that the oil is recognized as an official raw material that can be used in production processes. In addition, Pyrum has received ISCC PLUS certification for the pyrolysis oil and the recovered carbon black. Both products are thus considered sustainable and renewable raw materials.

These achievements have also been recognized by international experts in the tyre industry. For example, Pyrum won the Best Tyre Recycling Innovation category at the inaugural Recircle Awards and has been nominated for the “Grand Prix Mittelstand” (“Großer Preis des Mittelstandes”) from the German state of Saarland.

Recommend the last two blog posts with new investment ideas that may be worth to analyze.

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.