Last close As at 05/08/2026
—
— 0.00 (0.00%)
Market capitalisation
—
Research: Healthcare
BioPorto managed to continue sales growth for its NGAL research-use only (RUO) product in 2020 despite the headwinds of COVID-19. Sales of the product increased 28% over the prior year (DKK13.4m from DKK10.5m) despite the disruption. We are encouraged to see this growth as we expect physicians with exposure to the test to become the first customers after the launch of the approved NGAL Test for clinical use.
Written by
BioPorto Diagnostics |
Continued growth in 2020 despite headwinds |
Financial update |
Healthcare equipment |
22 March 2021 |
Share price performance
Business description
Next events
Analyst
BioPorto Diagnostics is a research client of Edison Investment Research Limited |
|||||||||||||||||||||||||||||||||||||||||||||||||||||
BioPorto managed to continue sales growth for its NGAL research-use only (RUO) product in 2020 despite the headwinds of COVID-19. Sales of the product increased 28% over the prior year (DKK13.4m from DKK10.5m) despite the disruption. We are encouraged to see this growth as we expect physicians with exposure to the test to become the first customers after the launch of the approved NGAL Test for clinical use.
Year end |
Revenue (DKKm) |
PBT* |
EPS* |
DPS |
P/E |
Yield |
12/19 |
26.6 |
(71.1) |
(0.39) |
0.0 |
N/A |
N/A |
12/20 |
23.2 |
(61.5) |
(0.28) |
0.0 |
N/A |
N/A |
12/21e |
32.2 |
(74.9) |
(0.25) |
0.0 |
N/A |
N/A |
12/22e |
179.3 |
64.5 |
0.21 |
0.0 |
26.2 |
N/A |
Note: *PBT and EPS are normalised, excluding amortisation of acquired intangibles, exceptional items and share-based payments.
Selling costs down in 2020 but expected to rise
The increase in NGAL sales was in spite of significant disruption to the company’s ongoing efforts to promote the product. This was reflected in a reduced cost of sales (DKK20.8 from DKK39.3m), which brought down BioPorto’s operating expenses as a whole (DKK76.9m from DKK91.6m). We expect this to turn around in 2021 as the company gears up for the commercial launch of the paediatric clinical NGAL Test (DKK387.9m cost of sales).
Guidance: DKK30m sales, DKK73m EBIT loss
BioPorto provided initial guidance for 2021 of DKK30m sales and DKK73m EBIT loss, which is the same guidance it provided for 2020 initially. Based on this guidance and the company’s recent clinical update, we are pushing back our timelines for the submission of the de novo application for the paediatric NGAL test to late summer 2021 (from Q221 previously). This has pushed back our forecasts for the expected clearance for the paediatric test to the end of 2021 and submission of the adult 510k application to 2022.
COVID-19 test clinical results expected imminently
With BioPorto’s earnings announcement, it reiterated the timeline for submitting an emergency use authorization (EUA) to the FDA for marketing clearance of its COVID-19 dipstick test in Q221. It additionally expects to submit a filing for CE marking in Europe at the same time. The company is continuing to collect patient samples and it is evaluating expanding to additional sites in Europe.
Valuation: Reduced on longer timelines
We have reduced the valuation for the NGAL and research products to DKK908.5m or DKK3.41 per basic share from DKK941m or DKK3.53 per basic share. We are not valuing the company’s COVID-19 test before the release of clinical data. The lower valuation is driven by the adjustment to the clinical timelines described above.
NGAL continues upward trajectory
BioPorto reported revenue of DKK23.2m in 2020, of which DKK13.4m was from sales of the NGAL RUO product, growth of 28% over the prior year (DKK10.5m, or 15% y-o-y growth if DKK1.2m of additional non-product sales-related NGAL revenue in 2019 is included). This is in spite of the obvious headwinds associated with COVID-19. On a quarterly basis, NGAL revenue for Q420 was down slightly over the previous year (DKK3.6m versus DKK4.3m), although we attribute this mostly to lumpiness in the sales pattern (Exhibit 1). We are encouraged to see the continued growth in NGAL sales, because we believe it is indicative of future interest in the clinical use of NGAL test products. As a whole, total revenue for 2020 was down compared to 2019 (DKK26.6m), due to the company’s strategic decision to focus its sales efforts on NGAL. This being said, Q420 sales of the company’s non-NGAL products were the strongest they have been in a year and a half (DKK3.9m).
|
Exhibit 1: NGAL RUO sales |
|
|
Source: BioPorto reports |
Operating expenses were down significantly in 2020 (DKK76.9m from DKK91.6m in 2019), primarily due to a reduction in sales expenses (DKK20.8 from DKK39.3m). We expect these sales expenses to increase significantly in 2021 (DKK38.7m) and 2022 (DKK51.7m) as BioPorto gears up for the launch of the paediatric and adult NGAL products.
BioPorto ended the year with DKK107.9m in cash, after its Q420 rights offering of DKK93.6m. We believe this should be sufficient to finance the company until after the approval of the NGAL test for both paediatric and adult indications, at which point we expect BioPorto to achieve profitability.
Company guidance and timelines
BioPorto provided financial guidance for 2021, with expectations of DKK30m in revenue and DKK73m in EBIT losses. The majority of these sales are attributed to sales of the company’s existing products, with a small contribution due to sales for the paediatric NGAL test at the end of the year (although the company did not give any details). Based on this guidance and the recent pipeline update from the company, we are revising our expectation for the timing of the approval of the paediatric and adult NGAL tests. The company is continuing to experience delays in recruitment due to COVID-19 for its study of critically ill (hospitalized) paediatric patients, although significant efforts have been made to mitigate this. Eight sites are enrolling patients in the US and it is evaluating potential sites in Europe. We have pushed the expected regulatory submission of the paediatric test into late summer 2021, with a clearance decision at the very end of the year. The current plan is to submit a 510k application for the adult test, using the paediatric test as the predicate device, but we no longer expect this to occur in 2021 based on the above guidance. Based on these combined delays, we have reduced our expected 2021 revenue estimates to DKK32.2m from DKK79.9m.
Valuation
We are continuing our policy of valuing BioPorto’s NGAL and research products separately from its COVID-19 test programmes. We are withholding the valuations for all COVID-19-based diagnostic products before clinical data are available. We have reduced the valuation for the NGAL and research products to DKK908.5m or DKK3.41 per basic share from DKK941m or DKK3.53 per basic share. This reduction is driven by the above adjustment to the timeline for the launch of the paediatric and adult NGAL tests. Additionally, we have adjusted for lower cash at the end of Q420 (DKK107.9 from our previous pro forma estimates of DKK118.1m). Additionally, our valuation is moved slightly lower due to adjustments in the run rates for the research products. Otherwise, our models are unchanged.
Exhibit 2: Valuation of BioPorto
Program |
Market |
Probability of success |
Peak revenue ($m) |
Valuation (DKKm) |
The NGAL Test |
ICU |
50% |
176.6 |
594.2 |
ED |
30% |
167.1 |
299.7 |
|
Post-surgery |
30% |
54.1 |
85.6 |
|
Research |
100% |
3.8 |
6.3 |
|
Paediatrics |
50% |
15.4 |
14.8 |
|
Other products |
Research |
100% |
1.5 |
2.5 |
Unallocated costs |
-202.7 |
|||
Total |
800.6 |
|||
Net cash and equivalents (Q420) (DKKm) |
107.9 |
|||
Total firm value (DKKm) |
908.5 |
|||
Total shares (m) |
266.6 |
|||
Value per share (DKK) |
3.41 |
|||
Dilutive warrants (m) |
4.6 |
|||
Total diluted shares |
271.1 |
|||
Value per diluted share (DKK) |
3.40 |
|||
Source: BioPorto reports, Edison Investment Research. Note: ED, emergency department.
In lieu of a valuation for the company’s COVID-19 gRAD test programme, we are presenting a contingency analysis, which remains unchanged from our previous report. This analysis assumes commercialisation in the US, UK and EU, and assumes testing rates will remain relatively similar to current values throughout 2020 (roughly 3.7m tests a day). BioPorto has guided to completion of clinical testing in Q221, at which time we expect to present a formal valuation based on the results of the study.
Exhibit 3: COVID-19 valuation analysis
Valuation (DKKm) |
Penetration |
||||
PoS |
2% |
4% |
6% |
8% |
10% |
1% |
7.60 |
15.20 |
22.80 |
30.40 |
38.00 |
5% |
38.00 |
75.99 |
113.99 |
151.99 |
189.98 |
10% |
75.99 |
151.99 |
227.98 |
303.97 |
379.96 |
15% |
113.99 |
227.98 |
341.97 |
455.96 |
569.95 |
20% |
151.99 |
303.97 |
455.96 |
607.94 |
759.93 |
Source: Edison Investment Research. Note: PoS, probability of success. $10 per test, 50% net profit margin, 3.7m tests a day in US+UK+EU, for one year.
Exhibit 4: Financial summary
DKK000s |
2019 |
2020 |
2021e |
2022e |
||
Year-end 31 December |
IFRS |
IFRS |
IFRS |
IFRS |
||
INCOME STATEMENT |
||||||
Revenue |
|
|
26,622 |
23,204 |
32,232 |
179,324 |
Cost of Sales |
(9,293) |
(9,865) |
(13,169) |
(26,468) |
||
Gross Profit |
17,329 |
13,339 |
19,063 |
152,855 |
||
Sales |
(39,268) |
(20,786) |
(38,924) |
(52,087) |
||
R&D |
(24,556) |
(28,125) |
(34,171) |
(15,089) |
||
Administrative |
(27,804) |
(28,018) |
(26,701) |
(26,701) |
||
EBITDA |
|
|
(68,333) |
(54,280) |
(71,423) |
68,289 |
Operating Profit (before amort. and except.) |
|
|
(71,190) |
(58,274) |
(75,417) |
64,295 |
Amortisation of acquired intangibles |
0 |
0 |
0 |
0 |
||
Exceptionals |
0 |
0 |
0 |
0 |
||
Share-based payments |
(3,109) |
(5,316) |
(5,316) |
(5,316) |
||
Reported operating profit |
(74,299) |
(63,590) |
(80,733) |
58,979 |
||
Net Interest |
52 |
(3,244) |
540 |
232 |
||
Joint ventures & associates (post tax) |
0 |
0 |
0 |
0 |
||
Exceptionals |
0 |
0 |
0 |
0 |
||
Profit Before Tax (norm) |
|
|
(71,138) |
(61,518) |
(74,877) |
64,526 |
Profit Before Tax (reported) |
|
|
(74,247) |
(66,834) |
(80,193) |
59,210 |
Reported tax |
4,605 |
5,272 |
4,974 |
(3,672) |
||
Profit After Tax (norm) |
(66,726) |
(57,702) |
(70,233) |
60,524 |
||
Profit After Tax (reported) |
(69,642) |
(61,562) |
(75,219) |
55,538 |
||
Minority interests |
0 |
0 |
0 |
0 |
||
Discontinued operations |
0 |
0 |
0 |
0 |
||
Net income (normalised) |
(66,726) |
(57,702) |
(70,233) |
60,524 |
||
Net income (reported) |
(69,642) |
(61,562) |
(75,219) |
55,538 |
||
Average Number of Shares Outstanding (m) |
170 |
205 |
277 |
291 |
||
EPS - normalised (DKK) |
|
|
(0.39) |
(0.28) |
(0.25) |
0.21 |
EPS - diluted normalised (DKK) |
|
|
(0.39) |
(0.28) |
(0.25) |
0.21 |
EPS - basic reported (DKK) |
|
|
(0.41) |
(0.30) |
(0.27) |
0.19 |
Dividend (DKK) |
0.00 |
0.00 |
0.00 |
0.00 |
||
BALANCE SHEET |
||||||
Fixed Assets |
|
|
8,218 |
15,506 |
12,827 |
10,148 |
Intangible Assets |
4,799 |
11,412 |
11,412 |
11,412 |
||
Tangible Assets |
1,710 |
2,448 |
(231) |
(2,910) |
||
Investments & other |
1,709 |
1,645 |
1,645 |
1,645 |
||
Current Assets |
|
|
34,464 |
124,780 |
61,439 |
125,579 |
Stocks |
4,155 |
3,165 |
4,329 |
8,702 |
||
Debtors |
5,695 |
6,886 |
3,974 |
22,108 |
||
Cash & cash equivalents |
18,122 |
107,943 |
46,350 |
87,982 |
||
Other |
6,492 |
6,786 |
6,786 |
6,786 |
||
Current Liabilities |
|
|
(14,858) |
(30,930) |
(34,814) |
(35,420) |
Creditors |
(3,237) |
(4,636) |
(8,520) |
(9,126) |
||
Tax and social security |
(2,306) |
(2,828) |
(2,828) |
(2,828) |
||
Short term borrowings |
0 |
0 |
0 |
0 |
||
Other |
(9,315) |
(23,466) |
(23,466) |
(23,466) |
||
Long Term Liabilities |
|
|
(2,502) |
(8,444) |
(8,444) |
(8,444) |
Long term borrowings |
0 |
0 |
0 |
0 |
||
Other long term liabilities |
(2,502) |
(8,444) |
(8,444) |
(8,444) |
||
Net Assets |
|
|
25,322 |
100,912 |
31,008 |
91,862 |
Minority interests |
0 |
0 |
0 |
0 |
||
Shareholders' equity |
|
|
25,322 |
100,912 |
31,008 |
91,862 |
CASH FLOW |
||||||
Op Cash Flow before WC and tax |
(68,333) |
(54,280) |
(71,423) |
68,289 |
||
Working capital |
4,453 |
15,593 |
5,631 |
(21,901) |
||
Exceptional & other |
159 |
(1,672) |
540 |
232 |
||
Tax |
3,557 |
4,743 |
4,974 |
(3,672) |
||
Net operating cash flow |
|
|
(60,164) |
(35,616) |
(60,278) |
42,948 |
Capex |
(1,106) |
(1,499) |
(1,315) |
(1,315) |
||
Acquisitions/disposals |
0 |
0 |
0 |
0 |
||
Net interest |
0 |
0 |
0 |
0 |
||
Equity financing |
35,983 |
130,064 |
0 |
0 |
||
Dividends |
0 |
0 |
0 |
0 |
||
Other |
(3,332) |
(3,051) |
0 |
0 |
||
Net Cash Flow |
(28,619) |
89,898 |
(61,593) |
41,633 |
||
Opening net debt/(cash) |
|
|
(46,709) |
(18,122) |
(107,943) |
(46,350) |
FX |
32 |
(77) |
0 |
0 |
||
Other non-cash movements |
0 |
0 |
0 |
0 |
||
Closing net debt/(cash) |
|
|
(18,122) |
(107,943) |
(46,350) |
(87,982) |
Source: BioPorto reports, Edison Investment Research
|
|
Research: Investment Companies
TR European Growth Trust (TRG) has enjoyed a stellar period of performance since the COVID-19-driven stock market sell-off in March 2020 (beating the benchmark by c 25pp over one year to 28 February 2021), helped by its managers sticking to their valuation-aware investment process, as well as a timely increase in the trust’s gearing. Lead manager Ollie Beckett says the team is optimistic on the prospects for small-cap European stocks – many of which have stronger balance sheets than their large-cap counterparts – as the economy recovers. TRG has a broadly diversified portfolio of c 130 stocks, allowing the managers to look for high-growth micro-caps as well as structural growth stories and recovery plays. Although the trust is now at the top of its peer group for NAV total returns over one and 10 years, it trades at the widest discount to NAV, suggesting significant scope for a re-rating similar to that seen in 2016/17.