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Research: Healthcare
Medlab Clinical has announced that it has cleared the Securities Exchange Commission’s (SEC’s) comments on its Nasdaq listing and is now preparing to finalise its application with its US broker, Alliance Global Partners. After this announcement, we expect Medlab will remain on track to meet its listing target timeline of Q1 CY23, which coincides with the anticipated investigational new drug (IND) submission for NanaBis in the US (to start Phase III trials). Due to the high activity and liquidity associated with the US biotech market, the potential Nasdaq listing could support the company in progressing its development pipeline. Our valuation for Medlab remains unchanged at A$236.1m or A$103.5/share.
Medlab Clinical |
Progressing on multiple fronts |
Nasdaq listing update |
Pharma and biotech |
12 December 2022 |
Share price performance Business description
Analysts
Medlab Clinical is a research client of Edison Investment Research Limited |
Medlab Clinical has announced that it has cleared the Securities Exchange Commission’s (SEC’s) comments on its Nasdaq listing and is now preparing to finalise its application with its US broker, Alliance Global Partners. After this announcement, we expect Medlab will remain on track to meet its listing target timeline of Q1 CY23, which coincides with the anticipated investigational new drug (IND) submission for NanaBis in the US (to start Phase III trials). Due to the high activity and liquidity associated with the US biotech market, the potential Nasdaq listing could support the company in progressing its development pipeline. Our valuation for Medlab 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.
In June 2022, Medlab announced its plans to pursue a dual listing on the US Nasdaq stock exchange and in September it filed an application with the three key US approval bodies: the Financial Industry Regulatory Authority, SEC and Nasdaq. Thursday’sannouncement pertains to Medlab clearing comments from the SEC, which brings the company a step closer to completing its US listing (we believe it remains on track for its Q1 CY23 target). While the planned offering size and price remain undisclosed, management has said the IPO proceeds will be used to develop NanaBis for cancer-related bone pain, NanoCBD for stress and MDC2000 for depression. A listing on Nasdaq is likely to improve liquidity and investor awareness for the company, in our view.
Medlab is focused on developing its lead asset, NanaBis, which is a 50:50 formulation of synthetic CBD and dronabinol (synthetic THC) for treating cancer-induced bone pain. NanaBis is awaiting approval to initiate Phase III studies, which we view as the next significant catalyst for share price performance. Medlab has prepared a drug master file and we expect it to approach the Food and Drug Administration with an IND application in Q1 CY23. The company is also developing NanoCBD, a 100% CBD formulation treating occupational stress and mental health issues.
In November 2022, Medlab received approval from the UK Medicines and Healthcare Products Regulatory Agency (MHRA) for its lead product NanaBis (NanaDol in the UK) to be used under its named patient programme and other compassionate areas. This was followed by similar UK approval for NanoCBD in April 2022 and will allow Medlab to generate additional real-world data to support the anticipated Phase III clinical trial of synthetic NanaBis in FY23.
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Research: Investment Companies
RTW Venture Fund (RTWVF) is managed by global healthcare specialist RTW Investments (RTW). It has announced that on 7 December 2022 portfolio company Prometheus Biosciences (NASDAQ: RXDX, cap $4.9bn) reported positive data on two of its clinical trials. At 31 October 2022, which is the date of RTWVF’s last published NAV, Prometheus was its third-largest holding, making up c 7.5% of the fund. This company’s share price rose by 165.7% on 7 December and by a further 22.4% on 8 December (despite the announcement of an upsized $500m secondary offering). Prometheus is an example of RTW’s long-term, full life cycle investment approach, which supports companies ranging from newco formation to mid-stage venture to pre-initial public offering (IPO) and public markets.
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