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Research: Healthcare
Medlab Clinical has released its unaudited cash flow report for Q123 and provided an update for the period. The company’s cash position was bolstered by the receipt of A$0.3m from sales of NanaBis and NanoCBD (under the Doctors Special Access Scheme) as well as a A$3.6m government R&D grant. In the absence of the grant, the company’s net cash outflow from operating activities for the quarter was A$3.5m. At the current burn rate and with a net cash position of A$5.3m (A$5.2m at end-FY22), we estimate the company’s operations are funded into CY23 (Q3 FY23). Due to the high activity and liquidity associated with the US biotech market, we see the potential Nasdaq listing, which Medlab is in the advanced stages of securing, as providing support for the company and its development pipeline. We expect the listing to coincide with the Investigational New Drug (IND) submission for NanaBis in the United States (to commence Phase III trials). Our valuation remains unchanged at A$236.1m or A$103.5/share.
Written by
Medlab Clinical |
Cash position supported by A$3.6m R&D grant |
Q123 update |
Pharma and biotech |
31 October 2022 |
Share price performance
Business description
Analysts
Medlab Clinical is a research client of Edison Investment Research Limited |
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Medlab Clinical has released its unaudited cash flow report for Q123 and provided an update for the period. The company’s cash position was bolstered by the receipt of A$0.3m from sales of NanaBis and NanoCBD (under the Doctors Special Access Scheme) as well as a A$3.6m government R&D grant. In the absence of the grant, the company’s net cash outflow from operating activities for the quarter was A$3.5m. At the current burn rate and with a net cash position of A$5.3m (A$5.2m at end-FY22), we estimate the company’s operations are funded into CY23 (Q3 FY23). Due to the high activity and liquidity associated with the US biotech market, we see the potential Nasdaq listing, which Medlab is in the advanced stages of securing, as providing support for the company and its development pipeline. We expect the listing to coincide with the Investigational New Drug (IND) submission for NanaBis in the United States (to commence Phase III trials). Our valuation remains unchanged at A$236.1m or A$103.5/share.
Year end |
Revenue (A$m) |
PBT* (A$m) |
EPS* |
DPS |
P/E |
Yield |
06/21 |
8.1 |
(12.4) |
(6.3) |
0.0 |
N/A |
N/A |
06/22 |
6.0 |
(8.4) |
(3.1) |
0.0 |
N/A |
N/A |
06/23e |
7.7 |
(8.8) |
(3.8) |
0.0 |
N/A |
N/A |
06/24e |
7.7 |
(9.6) |
(4.2) |
0.0 |
N/A |
N/A |
Note: *PBT and EPS are normalised, excluding amortisation of acquired intangibles, exceptional items and share-based payments.
As a reminder, Medlab Clinical is focused on the clinical development of its lead asset, NanaBis, a 50:50 formulation of synthetic CBD and synthetic THC (dronabinol) for the treatment of cancer-induced bone pain. The therapy has previously shown encouraging results from a Phase I/II study, demonstrating safety, efficacy and tolerability of the treatment regime with the trial meeting all of its primary and secondary endpoints. The NanaBis clinical data package now consists of data from 1,200 Australian patients, which the company will use to support the initiation of Phase III studies. Medlab has prepared a Drug Master File and we expect the company to approach the FDA with an IND application in Q4 CY22/Q1 CY23, most likely in parallel to its announced Nasdaq listing. Approval to initiate Phase III studies represents, in our view, the next significant catalyst for Medlab.
In addition, the company reported new patents granted for its consumer health product, NRGBiotic, a specialised probiotic for patients with major depressive disorders. The patents cover the use of the product in Australia, Europe, New Zealand, the United States and Canada. In a Phase II study NRGBiotic was shown to exhibit greater symptom remission in patients when combined with an antidepressant compared to those treated with an antidepressant alone.
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Research: Healthcare
Quantum Genomics has announced that results from the Phase III FRESH study, investigating the use of firibastat in treatment-resistant hypertension (TRH), are non-significant versus placebo. As a result, the company has terminated a second, longer-term Phase III trial (REFRESH) in TRH and will stop the development of firibastat in cardiology. The company will now focus on the development of new, undisclosed treatments. Management estimates the company will have €11m cash after the full discontinuation of cardiology efforts and has communicated that negotiations with several biotech/medtech companies are ongoing. Quantum Genomics will present full results from the FRESH study at the American Heart Association congress on 4 November. In light of this news, our estimates and valuation for Quantum Genomics are under review.