REDEYE RESEARCH NOTE:
Biovica: Secures the first larger direct commercial hospital agreement
Biovica has signed the first direct commercial client bill agreement with a larger healthcare provider operating more than 30 hospital laboratories, primarily located in Arizona. This is positive as it opens up for commercial and clinical DiviTum sales towards the end of this calendar year. This agreement is also based on a similar premium price as the earlier US provider network contracts introducing DiviTum to the private insurance segment. Biovica has an ambition to secure up to ten of these direct contracts by the end of April 2024.
Johan Unnerus
The earlier commercial agreements with network providers placed DiviTum as an option for several private insurance networks. This latest direct commercial agreement sets DiviTum as a clinical option in more than 30 hospital laboratories, mainly in Arizona. In our view, this is a more extensive network as it involves more than 30 hospital labs, and we would expect that Arizona has some 175-200 hospital labs based on population (pro-rata).
As a result of this contract, these hospitals and hospital labs could start using DiviTum after a shorter run-in period, possibly over some 4-8 weeks. Biovica referred to a pipeline of additional direct contracts that the calendar year-end could conclude. By securing this contract, Biovica has delivered on the ambition to complete the first direct contract by Biovica’s Q2 (ending in late October).
This important milestone is also welcome as Biovica assesses alternatives to secure growth capital driving the US launch, which is necessary over the next six months. During the last call, Biovica also confirmed that it is considering different alternatives besides a traditional equity dilutive alternative. The next value trigger is the publication of the PLA code, the following direct contract and the establishment of an individual price for DiviTum by the US CMS. Our Base Case is SEK 27 (Bull SEK 60 and Bear SEK 5).
Biovica presentations:
https://biovica.com/investor-relations/events/
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.
Fit Investment Ideas 