GCIBelluscura reports record sales and strong outlook ahead of full DISCOV-R launch
After a brutal few years, the tide finally seems to be turning for early-stage healthcare stocks. Here costs have been cut to the bone and priorities refocused in order to accelerate the path to profitability.
Sure, this exercise has been painful. Yet equally, many businesses are approaching breakeven, have become far more resilient, and are run by battle-hardened management teams who are even hungrier for success.
Plus, the long-term fundamentals of aging populations, attractive unit economics, science-rich products, and Himalayan patient waiting lists, mean the cheap valuations provide a supportive backdrop for investor bargain hunting.
Take () , a developer of cutting-edge portable oxygen concentrators (POCs) that treat debilitating respiratory conditions like COPD. Its shares have amazingly declined >90% from a high of 150p in Jan'22 to 11p, despite posting strong MoM sales growth this morning following a recent £1.9m capital injection.
Here the company delivered "record" revenues in July of $708k vs $521K in June and $450k May, with the Board anticipating this positive trend to continue on the back of increasing adoption of the X-PLOR and the Q4'24 release of its new groundbreaking DISCOV-R device.
In fact, demand for the DISCOV-R is literally off the charts. It's only just been soft launched in the US, but has already sold out thanks to its lightweight (2.75kg) portable nature, medical benefits, and ability to produce more oxygen by weight than any POC on the market.
As such, now requires another top-up fundraise in order to finance this increasing customer demand (eg working capital). Exactly how much is difficult to gauge - albeit I would guess $5m should do the job given the Board are guiding towards FY24 turnover of $8m-$10m (vs $825k LY), alongside annualised revenues entering 2025 at between $14m-$16m and the group becoming EBITDA positive in Q1'25.
Finally, in terms of the numbers, house broker Dowgate Capital has a 35p/share target price vs 11p currently (mrkcap £18.5m), based on turnover climbing from $9.0m in 2024 to $30m next year and adjusted FY25 EBITDA and EPS of $4.0m and 0.8c respectively.
The Board adding: "We are delighted with the growth in sales and distribution over the past six months for both the X-PLOR and DISCOV-R portable oxygen concentrators."
Whilst it has taken time to bring both products to market, we now have two leading lightweight portable oxygen enrichment concentrators that meet the stringent requirements of the FDA and look forward to the remainder of 2024 and 2025 with a real sense of confidence".
shares soared 46% on the announcement.
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