GCIAll the pieces are falling into place for Oncimmune
Executing successful corporate turnarounds is notoriously tricky - often costing more and taking longer than originally anticipated.
However there are exceptions. being one, having hit all its key milestones in double quick time, since the new management team under CEO Martin Gouldstone took the helm in Aug’23.
Indeed trading at this niche life sciences firm – that provides proprietary autoantibody profiling services to the drug development industry – continues to go from strength to strength.
Its cutting edge ImmunoINSIGHTS platform has secured a slew of new orders. Which not only more than doubled revenues in year 1, but is also on track to repeat the feat in Aug FY25.
The latest 3 contracts being signed with top 10 global pharmaceutical groups, covering new therapeutic areas &/or hard to profile autoantibodies (eg Immunoglobulin type E, IgE). The latter being a technological breakthrough for #ONC and the wider industry, underscoring the firm’s scientific expertise. All told, 8 contracts worth £2.14m have been signed over the last 3 months alone.
Sure FY25 guidance might not have been upgraded. Yet this is simply because its still early in FY25 - whilst the improved visibility further underpins Cavendish’s (house broker) turnover and adjusted EBTDA targets of £6.9m (>40% revenue cover already) & £0.7m respectively. The former being >140% higher than Est FY’24 revenues of £2.8 LY, which itself is another 140% above FY’23 levels (£1.15m).
This impressive progress hasn’t been lost on capital providers either. You see last month, the group raised £2.3m (gross) in a placing at 15p, alongside converting €4m of its €6m IPF debt into equity at 15p. Meaning now #ONC has the fire-power to accelerate its growth trajectory and become cashflow positive over the next 12 months.
So where are we now?
Well as at Aug’24, ONC had a £3.2m sales pipeline of which 72% related to new clients. Plus “in the medium term, Oncimmune aspires to grow revenues to more than £20m by 2029”. Finally wrt valuation at 15p (£15.6m Mrkcap),the stock trades on a modest EV/sales multiple of 2.6x. Cavendish have a target price of 50p/share.
CEO Martin Gouldstone commenting: “Following the fundraise, and successful debt recapitalisation of the business announced on the 18 Oct’24, I am pleased to see that our relentless focus on the commercial side of the business continues to bear fruit. These new wins with existing Top 10 Pharma customers keeps us on track to be a profitable business in FY’25.”
Momentum is building.
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