Biocartis « Terug naar discussie overzicht

quote:

nat1966 schreef op 2 februari 2020 12:48:

05-03
Jaarresultaat 2019 Biocartis NV
allee heb je een beeetje gelukkiger gemaakt denk ik toch

quote:

Hans90 schreef op 1 februari 2020 09:37:

Hi Flatlander,

I see you often refer to Cepheid as a succes story for MDx. I had a quick look at their early days and do see some differences with Biocartis:
- Cepheid was able to grow from 5 to 85 M$ in 6 years (2000-2005), Biocartis is currently on a slower growth trajectory
- Cepheid made an average loss of 15 M$/year (2000-2005), the average loss for Biocartis is around 50 M$/year, hence Biocartis needs more cash to grow
- Cepheid had a gross margin of 40-50% when they hit 20 M$ revenue and was able to sustain this margin, gross margin for Biocartis is currently below 20%, I see this as one of the biggest risks as it is a strong contributer to the high cash burn, I'm reluctant to belief that the new production line alone will get gross margin above 40%
- Cepheid had a major revenue growth from 18 M$ in 2003 to 53 M$ in 2004, do you know the underlying reason, something similar in the pipeline for Biocartis? I'm again a bit reluctant to belief that FDA approval alone will result in this type of stepchange for Biocartis, any thoughts on quantifying the impact of FDA approval?

I strongly belief in the MDx market and see the added value of Biocartis. I'm however still a bit skeptical about their ability to lower cash burn significantly in 2020-2021.

quote:

brightlight schreef op 1 februari 2020 16:32:

[...]
Hans90,
let me address your points one by one:

Concerning revenue growth:
Revenue at Biocartis is expected to grow in 6 years from 12M Euro (2016) to 174M Euro (2022), so 14 times 2016 revenue (Cepheid came in at 17 times, so not that much difference).

Concerning the loss making:
1. It is useless to compare loss figures of companies in different stages of their development. Cepheid’s growth acceleration has already happened, Bcart’s still has to begin.
2. You shouldn’t compare absolute loss figures, but relative loss figures.
3. Every company is different in the way they approach their business model. One company may have better metrics than the other concerning certain aspects of their business model, That does not mean they can’t both be successful and be fabulous growth stories in their own way. But as I said in point 1, Bcart and Cepheid are at a different stage of their development so it is pointless to compare the two at this moment in time.

Concerning gross margins:
Hans, you really should read the posts that are out there. I already pointed out that your gross margin figures are wrong. Flatlander did so too. Here are the correct figures: 2019: 43.96%est; 2018:44.81%; 2017: 58.62%; 2016: 52.88%; So they are perfectly in line with the Cepheid margins.

Concerning the growth drivers for the foreseeable future:
Growth drivers for Bcart are: Entry in the Japanese and Chinese markets; Full approval for the U.S. market; Continued growth in Europe and the rest of the world; 11 new tests in the pipeline; higher margins due to higher sales prices when more products are sold (supply demand balance shifting); more cost efficiencies due to better production line utilization. Probably Flatlander can add some more.

Concerning cash burn:
Nobody said cash burn would be lower in 2020-2021. Maybe it will, maybe it won’t. As I already said before, cash burn is an inherent part of investing in biotech. Bcart is no different. It is something you have to accept as a biotech investor. You get a better company in return (besides no new cash is needed in approximately the next two years, that really is a luxury as a biotech investor!). Amazon had the same business model (loss making from 1995 till 2002 and even some years after that). Nobody is complaining now after the stock went up roughly 20 times in 10 years. Sometimes you need a little bit of VISION as an investor. That is something which is distinctly missing on this forum.

It seems to me there is a concerted effort on this forum to bring the share price down. I don’t know who benefits, but frankly, I am getting a bit tired of having to address all the skepticism and correct the constant stream of misinformation. I think I'll just let the ignorance run its course.
BL
P.S. Nat, je mag dit vertalen.

quote:

brightlight schreef op 1 februari 2020 20:24:

Reply,
De verkoop op de Japanse markt is al gestart sinds november van vorig jaar (research use only).
Het vertrek van de CFO stoort iedereen, of laat me zeggen de ongelukkige timing ervan. De CFO had beter een maand gewacht met zijn ontslag, dan had het op de persbabbel van 5 maart deftig kunnen uitgelegd worden. Nu slaat iedereen aan het gissen. Het is echter niet de eerste keer dat de communicatie van Bcart beter had gekund. De vraag is nu of het aandeel al niet genoeg is afgestraft op basis van iets wat uiteindelijk evengoed een storm in een glas water kan blijken. De paniek in aanloop naar 6 januari bleek uiteindelijk ook ongegrond.
CGCDLR,
Bedankt voor de mooie woorden.
BL

quote:

Flatlander schreef op 2 februari 2020 20:02:

[...]

BL

I also responded to Hans before I read your post. You had a very similar take away "that the margins are not completely comparable at this stage of development".

The only area I differ is that I would caution about creating an environment that keeps dissenters from bringing legitimate concerns to light. If a board becomes too positive and self reinforcing it can lose value. I want to know as many facts as possible about my investments. Even if it is something I overlooked. That said posting derogatory information without backing it up without facts and appropriate discussion does not provide value. It can be a difficult balance to maintain.

FL

quote:

Flatlander schreef op 2 februari 2020 19:41:

[...]

Hi Hans
I went back and reviewed Cepheiid's performance during the period you discuss. The system GeneXpert system that I consider roughly analogous to Idylla did not launch until 2005. Before that they had a anthrax test that sold 8 million units in a few years based on the anthrax mail scare in the U.S. Apparently, the military filled large orders on fear of a biologic attack. Ebola sales also ramped slightly later. One huge difference between the two companies is that rapid infectious disease tests do not appear to languish with a RUO for as long a time as oncology related MDx assays. As we see with the current corona virus, infectious diseases are considered a health care emergency. These emergencies lead to rapid approval of diagnostic tests. Because incubation periods for viruses are often short, PCR tests are one of the few solutions that provide timely results.

This is all important because in my estimation, the research market probably represents less than 5% of the overall oncology IVD market. Because much of the efforts in the US are now based on placing units to get the user community to publish their experiences, I don't think the margins represent the long term potential of the platform. Rather their are inducements being given to garner the testimonials that lead to future growth. In my opinion, the money is definitely in first line diagnostic market. Cepheid was able to crack into that market much quicker because of the emphasis on infectious disease. Again, it would be great if BCART would break out the sales numbers geographically. Several assays have full EU marking for diagnostic use and BCART indicates that consoles are being deployed in front line diagnostic applications at a pace ahead of there projections. I'm not sure how this translates into margins.

Cepheid also had the benefit of launching out of the US, where healthcare reimbursement costs are much higher than the ROW. I would suspect that BCARTs European margins are likely lower due to lower reimbursement rates in the EU, The positive side of that is that a huge tailwind is likely to occur with full diagnostic approval unlocks the ability to exploit the POC market. However, as I pointed out recently, the release of proprietary content of our partners GHDX and ImmunExpress will likely result in accelerated console deployment but lower margins as these assays garner royalties rather than the profit margins built into the proprietary assay content. While I'm very optimistic about these new assays, I think we need to temper expectations since we do not know the royalty specifics. In the pharmaceutical industry high single digit to low double digit royalties are the norm. I'm not sure if that is the case here. Seems like a premium is justified given the amount of technology that is required.

So in answer to your question I don't think you can compare margins until BCART can sell into the POC markets in the US and the larger Asian markets.

FL

quote:

nat1966 schreef op 2 februari 2020 21:28:

wie kan mij helpen in het Nederlands aub, met alle respect voor de mensen dat in het Engels posten