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Hardman & Co

Genedrive plc First commercial sales in new focus area: bio-threats

Hardman & Co Report Report DownloadsGenedrive plc (LON:GDR) is a commercial-stage company focused on point-of-care (PoC) molecular diagnostics. Its Genedrive® molecular diagnostic platform is at the forefront of this technology, offering a rapid, low-cost, simple-to-use device with high sensitivity and specificity in the diagnosis of infectious diseases. Rapid analysis of patient samples greatly aids clinical and public health decision-making, particularly in remote areas of developing countries. Strategic progress in 2018 generated the first product sales in hepatitis C and in 1H’19 has delivered the first product sales in the Bio-threat market to the US Department of Defense (DoD).

Strategy: Now that the Genedrive technology platform has received CE marking, management has completely re-focused the company onto the commercialisation pathway for gene-based diagnostics in Hepatitis C, tuberculosis, Bio-threats, and antibiotic-induced hearing loss (AIHL), divesting its Services unit in June 2018.

Interim results: The mix of group sales in the period changed significantly vs. 1H’18, with a considerably greater contribution from product sales in 1H’19. 1H’19 was the first reporting period to include commercial product sales from the DoD, and it was the first full period without the Services business.

Sales: Product sales (consisting of Genedrive unit, HCV assay, and DoD sales in 1H’19) contributed £0.8m (£0.0m) to the £1.5m gross income in the six-month period. This included the first, unanticipated, commercial order from the DoD, of $0.9m/£0.7m. Combined, product sales were in line with forecasts.

Risks: The platform technology has been de-risked through the receipt of CE marking for its assay for detection of HCV infection. The main risk is commercial, given that it often takes time for new technologies to be adopted. However, partnering with major global and local experts reduces this risk.

Investment summary: Genedrive technology ticks all the boxes of an ‘ideal’ in vitro diagnostic that satisfies the need for powerful molecular diagnostics at the point of care/need. The hepatitis C market is a very large global opportunity, and the HCV-ID test has excellent potential, even in developing countries. With strong partners being signed for different countries, such as the NHS in the UK, and evidence of early sales traction, GDR is at a very interesting inflection point.

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