Currency in USD
Last close As at 17/03/2023
USD0.17
▲ 0.04 (30.77%)
Market capitalisation
USD7m
Research: Healthcare
Following a proposed share consolidation announced in November 2022, OpGen has effected a reverse stock split in the ratio of 1:20. This comes in the wake of a Nasdaq notification received in late August 2022 granting the company a 180-day extension (ending in February 2023) to regain compliance with its listing requirements (minimum threshold price of $1 per share). Given Nasdaq’s liquidity and trading volumes, we see Opgen’s ability to maintain the listing as crucial to its effectiveness in raising capital to develop its R&D pipeline and grow its commercial portfolio. While our overall valuation remains unchanged at $67.5m, the per-share valuation increases to $23.3/share from $1.2/share, reflecting the share consolidation (2.9m shares outstanding post consolidation versus 58.0m previously).
OpGen |
Share consolidation to regain Nasdaq compliance |
Regulatory update |
Pharma and biotech |
6 January 2023 |
Share price performance
Business description
Next events
Analysts
OpGen is a research client of Edison Investment Research Limited |
Following a proposed share consolidation announced in November 2022, OpGen has effected a reverse stock split in the ratio of 1:20. This comes in the wake of a Nasdaq notification received in late August 2022 granting the company a 180-day extension (ending in February 2023) to regain compliance with its listing requirements (minimum threshold price of $1 per share). Given Nasdaq’s liquidity and trading volumes, we see Opgen’s ability to maintain the listing as crucial to its effectiveness in raising capital to develop its R&D pipeline and grow its commercial portfolio. While our overall valuation remains unchanged at $67.5m, the per-share valuation increases to $23.3/share from $1.2/share, reflecting the share consolidation (2.9m shares outstanding post consolidation versus 58.0m previously).
Year end |
Revenue |
EBITDA* |
PBT* |
EPS* |
P/revenue |
P/E |
Net debt/ |
12/20 |
4.2 |
(19.6) |
(24.7) |
(31.5) |
1.9 |
N/A |
6.7 |
12/21 |
4.3 |
(20.4) |
(35.7) |
(23.4) |
1.9 |
N/A |
(14.4) |
12/22e |
3.2 |
(19.9) |
(25.4) |
(10.2) |
2.6 |
N/A |
2.8 |
12/23e |
5.3 |
(16.7) |
(21.8) |
(7.5) |
1.5 |
N/A |
24.0 |
Note: *EBITDA, PBT and EPS are normalized, excluding amortization of acquired intangibles, exceptional items and share-based payments. EPS adjusted for the 1:20 share consolidation in January 2023.
1:20 share consolidation effected
In November 2022, OpGen scheduled a special shareholders’ meeting and received approval for the share consolidation/reverse stock split in the ratio 1:5 to 1:20, which was finalized by the board at 1:20 (every 20 common shares will convert into one share at par value of $0.01 per share). This reduces the company’s outstanding share count to 2.9m from 58.0m previously. Proportional adjustments will be applicable to already issued share warrants, stock options and restricted shares. However, the stakes of ownership will remain unchanged. The post-consolidation split will commence trading on the Nasdaq from 5 January.
Aims to regain Nasdaq listing compliance
All Nasdaq-listed stocks must maintain a minimum trading price of $1/share for at least 10 consecutive days to remain in compliance with the listing rules. OpGen’s share price dropped below this threshold in early 2022, resulting in the receipt of a 180-day extension in August to regain compliance and triggering the decision to undertake the consolidation. Given OpGen’s short cash runway (to Q123), we believe maintaining its listing is crucial to its ability to raise capital and attract investors.
Valuation: $67.5m or $23.3 per share
Our overall valuation for OpGen is unchanged at $67.5m, but the per-share valuation increases to $23.3/share (from $1.2/share previously), reflecting the share consolidation. With a cash runway lasting into Q123, we anticipate the need to raise $20m in the near term, followed by another $45m over FY23–26, before reaching the scale to fund operations from internally generated cash flow (FY27).
Exhibit 1: OpGen’s valuation
Product |
Main indication |
Status |
Probability of successful commercialization |
Launch |
Peak sales ($m) |
Patent protection |
rNPV |
||
Unyvero excluding China |
Lower respiratory |
Market |
100% |
2020 |
134.0 |
2040 |
98.1 |
||
|
UTI (US) |
Clinical |
80% |
2024 |
|||||
|
IJI (US) |
Pre-clinical |
50% |
2025 |
|
|
|||
Unyvero - China |
HPN |
Registration |
80% |
2024 |
41.2 |
2040 |
20.5 |
||
Acuitas AMR Panel |
AMR |
Market |
100% |
2022 |
20.2 |
2040 |
14.2 |
||
Aresdb (book value) |
Bioinformatics |
Market |
|
|
|
|
4.8 |
||
Unyvero A30 book value and others |
IJI |
Preclinical |
|
|
|
|
9.0 |
||
Unallocated R&D costs |
(24.7) |
||||||||
G&A costs |
(55.3) |
||||||||
Pro forma net cash (at 3 October 2022) |
|
|
|
|
|
|
0.8 |
||
Total firm value |
67.5 |
||||||||
Total shares outstanding (m) |
2.9 |
||||||||
Value per share ($) |
|
|
|
|
|
|
23.3 |
Source: Edison Investment Research
Exhibit 2: Financial summary
$'000s |
2019 |
2020 |
2021 |
2022e |
2023e |
||
Year end 31 December |
GAAP |
GAAP |
GAAP |
GAAP |
GAAP |
||
PROFIT & LOSS |
|
|
|||||
Revenue |
|
|
3,499 |
4,214 |
4,306 |
3,172 |
5,283 |
Cost of Sales |
(1,632) |
(3,848) |
(2,848) |
(3,197) |
(3,075) |
||
Gross Profit |
1,867 |
366 |
1,458 |
(25) |
2,208 |
||
Sales, General and Administrative Expenses |
(8,496) |
(12,367) |
(13,649) |
(13,735) |
(12,904) |
||
Research and Development Expense |
(5,121) |
(9,965) |
(10,911) |
(8,729) |
(8,199) |
||
EBITDA |
|
|
(10,829) |
(19,631) |
(20,388) |
(19,886) |
(16,678) |
Operating Profit (before amort. and excepts.) |
|
|
(11,750) |
(21,966) |
(23,102) |
(22,488) |
(18,894) |
Intangible Amortisation |
0 |
0 |
0 |
0 |
0 |
||
Other |
0 |
0 |
0 |
0 |
0 |
||
Exceptionals |
(522) |
(752) |
(171) |
(6,976) |
0 |
||
Operating Profit |
(12,272) |
(22,718) |
(23,273) |
(29,464) |
(18,894) |
||
Net Interest |
(178) |
(3,294) |
(4,754) |
(2,942) |
(2,900) |
||
Other |
2 |
(66) |
(6,735) |
474 |
0 |
||
Profit Before Tax (norm) |
|
|
(11,928) |
(24,742) |
(35,742) |
(25,375) |
(21,794) |
Profit Before Tax (reported) |
|
|
(12,447) |
(26,078) |
(34,762) |
(31,932) |
(21,794) |
Tax |
0 |
(132) |
(44) |
0 |
0 |
||
Deferred tax |
0 |
0 |
0 |
0 |
0 |
||
Profit After Tax (norm) |
(11,928) |
(24,875) |
(35,786) |
(25,375) |
(21,794) |
||
Profit After Tax (reported) |
(12,447) |
(26,211) |
(34,806) |
(31,932) |
(21,794) |
||
Average Number of Shares Outstanding (m) |
0.1 |
0.8 |
1.8 |
2.5 |
2.9 |
||
EPS - normalised ($) |
|
|
(147.5) |
(31.5) |
(23.4) |
(10.2) |
(7.5) |
EPS - Reported ($) |
|
|
(154.0) |
(33.2) |
(22.9) |
(12.9) |
(7.5) |
Dividend per share (c) |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
||
BALANCE SHEET |
|||||||
Fixed Assets |
|
|
3,755 |
32,863 |
31,924 |
20,491 |
18,688 |
Intangible Assets |
1,418 |
24,606 |
21,983 |
13,503 |
12,548 |
||
Tangible Assets |
2,133 |
5,791 |
5,917 |
4,738 |
3,890 |
||
Other |
203 |
2,466 |
4,024 |
2,250 |
2,250 |
||
Current Assets |
|
|
6,667 |
16,888 |
39,743 |
12,873 |
8,122 |
Stocks |
473 |
1,486 |
1,239 |
1,279 |
1,227 |
||
Debtors |
568 |
653 |
1,172 |
608 |
1,013 |
||
Cash |
2,708 |
13,360 |
36,080 |
9,735 |
4,632 |
||
Other |
2,918 |
1,388 |
1,250 |
1,250 |
1,250 |
||
Current Liabilities |
|
|
4,939 |
7,372 |
19,917 |
14,795 |
13,689 |
Creditors |
4,565 |
6,673 |
5,398 |
5,396 |
5,170 |
||
Short term borrowings |
374 |
699 |
14,519 |
9,399 |
8,519 |
||
Long Term Liabilities |
|
|
1,190 |
21,188 |
10,533 |
6,087 |
22,722 |
Long term borrowings |
329 |
19,379 |
7,176 |
3,096 |
20,116 |
||
Other long term liabilities |
860 |
1,809 |
3,356 |
2,990 |
2,606 |
||
Net Assets |
|
|
4,293 |
21,191 |
41,217 |
12,482 |
(9,601) |
CASH FLOW |
|||||||
Operating Cash Flow |
|
|
(11,506) |
(23,397) |
(21,479) |
(17,978) |
(16,783) |
Net Interest |
0 |
0 |
0 |
0 |
0 |
||
Tax |
0 |
0 |
0 |
0 |
0 |
||
Capex |
(32) |
(130) |
(1,984) |
(397) |
(413) |
||
Acquisitions/disposals |
0 |
1,267 |
0 |
0 |
0 |
||
Equity Financing |
13,062 |
33,793 |
48,159 |
4,370 |
0 |
||
Dividends |
0 |
0 |
0 |
0 |
0 |
||
Other |
0 |
0 |
(266) |
0 |
0 |
||
Net Cash Flow |
1,524 |
11,533 |
24,430 |
(14,005) |
(17,196) |
||
Opening net debt/(cash) |
|
|
(3,514) |
(2,005) |
6,717 |
(14,385) |
2,760 |
HP finance leases initiated |
0 |
0 |
0 |
0 |
0 |
||
Exchange rate movements |
(19) |
(2) |
(5) |
(13) |
(4) |
||
Other |
(3013) |
-20,254 |
-3,322 |
-3,127 |
-4,043 |
||
Closing net debt/(cash) |
|
|
(2,005) |
6,717 |
(14,385) |
2,760 |
24,004 |
Source: Company reports, Edison Investment Research
|
|
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