Verici DX announces it's well placed and funded to build on excellent progress to date
One ‘golden rule’ when investing in healthcare, is to buy ‘best in class’ technology targeted at large addressable markets & providing substantial unmet patient needs.
If you do this consistently, then ultimately any temporary price weakness simply becomes noise longer term, as the shares rise on fundamentals.
Here ticks all the right boxes. Developing a ‘next generation suite’ of blood/AI & RNA based immunodiagnostics used by doctors to greatly improve a patient's pre/post kidney transplant response/acceptance.
This is a TAM worth >$700m, & underpinned by c.300,000 people globally on waiting lists, with only 100,000 such operations performed annually. Moreover, existing tests are beset by inaccuracies, leading to est. 37%-50% failure rates costing $10bn+ pa.
Ok, so how much better is Verici Dx’s science vs rivals?
Well, last week the company said that after an extensive 15 month blinded trial involving 14 sites. Its post surgery test (Tuteva) had demonstrated a “significantly higher Positive Predictive Value (PPV) for acute rejection (incl ‘below the surface’ organ degradation ie sub-clinical) than currently available blood tests across a broad population.” With detailed statistical data being released at an industry conference in June.
IMO, this is hugely significant on numerous fronts.
Firstly because it means VRCI remains on track to launch the product in the US later this year.
Next the findings are particularly impressive given that the validation study utilised a generalised 'all-comers' population, rather than a specific subgroup. Reflecting the wide clinical applicability of the test for comprehensive commercial adoption in a real-world setting.
And lastly - with the underlying efficacy of the ‘Platform’ now ‘proven’. These results should hopefully open the door to similar favourable outcomes for its other 2 tests. Clarava, a pre-transplant prognostic for identifying early acute rejection (results soon). Followed by Protega, a liquid biopsy that aims to predict the risk of fibrosis and long-term graft failure.
Plus due to the quality & depth of Verici Dx’s patented technology (exclusively licensed from Mount Sinai). There’s even scope to sell this RNA signature/profiling data (eg histopathology imagery & the analysis of whole transcriptome) to outside 3rd parties for research (eg auto-immune) & therapeutic development (eg clinical trial stratification) purposes, &/or monitoring patient studies post approval.
Wrt the numbers, house broker Singers forecast 1st revenues this year ($0.2m), climbing rapidly to $2.7m & $8.4m between 2023-2024. And have a 76p ‘risk adjusted’ target price vs 27p today.
CEO Sara Barrington adding: “The positive headline data from our international validation study for Tuteva was a significant milestone, as it demonstrated the significantly higher PPV of Tuteva vs currently available blood tests. Paving the way for a US commercial launch later in 2022."
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