Healthcare stocks in Small-cap Space - PIQ, CYP, LBT

  • Jan 15, 2020 AEDT
  • Team Kalkine
Healthcare stocks in Small-cap Space - PIQ, CYP, LBT

Every investor, at some point in time, has come across the risk-return relationship which essentially states that higher the risk involved in an investment, higher will be the returns. Small-cap stocks, are stocks with a market capitalisation in the range of ~$100 million to ~$2 billion, falls under such investments and are thus, attractive for investors who seek high returns while having a strong risk appetite.

In this article, we will focus on three small-cap stocks in the health care sector – PIQ, CYP and LBT.

Proteomics International Laboratories Ltd (ASX:PIQ)

Proteomics International Laboratories Ltd is a Perth-based med-tech company providing predictive diagnostics and bioanalytical services. Proteomics’ PromarkerD is a widely used predictive diagnostic test for diabetic kidney disease. The company’s analytical services include pharmacokinetic testing, proteome mapping, biosimilars/biologics drug characterisation, and targeted mass spectrometry, among others.

                  Source: Company Website

Proteomics Secures CE Mark for PromarkerD Hub

The company announced on 14 January 2020 that it has received CE Mark registration for its software tool, PromarkerD Hub. The CE Mark offers a guarantee that it meets the EU requirements in terms of safety and environment protection.

The CE Mark registration is expected to accelerate the implementation of sales and licencing of the product across Europe. With a high prevalence of diabetic patients with chronic kidney disease (~60 million adult diabetic patients in the EU and ~33% of those with chronic disease), PromarkerD Hub offers a huge financial potential to Proteomics.  Also, the registration will strengthen the likelihood of PromarkerD getting an approval by the US FDA.  

Highlights from the AGM

On 28 November 2019, PIQ released a presentation on AGM wherein, it highlighted the following pointers on PromarkerD as follows:

  • A huge market opportunity for PromarkerD: The diagnostic test, the first and only one of its kind, has a significant market opportunity with approximately 425 million diabetes patients - ~33% having diabetic kidney disease. Within the key markets - US, Europe, and Japan, the company has an opportunity of earning US$539 million in a year.
  • Availability in the market; scalable: The product is already rolled out in Europe and with multiple licensing deals, the product’s reach is likely to expand across the globe.
  • Collaboration with Janssen: As part of the collaboration, Janssen uses PromarkerD to aid in evaluating canagliflozin’s effectiveness as a therapy for diabetic kidney disease. There could be a huge opportunity for Proteomics if PromarkerD can become a Complementary Diagnostic.
  • Potential for expansion, limited competitive threat: Being the first commercial diagnostic test and the only in Europe, there is a limited threat from competitors. The product is also being developed for asthma, COPD, endometriosis, mesothelioma, and giardia, thus increasing the target population and thus the potential market size.

Analytical services

  • New contracts for pharmacokinetics testing, biosimilars and protein QC

Stock Performance

The stock of PIQ was trading flat at $0.290 on 15 January 2020, (at AEDT 3:17 PM). The company has a market cap of $26.65 million and approximately 91.88 million outstanding shares. The 52-week high and low value of the stock is $0.450 and $0.230, respectively. The stock has generated negative returns of 18.31% and 12.12% in the last three months and last six months, respectively.

Cynata Therapeutics Limited (ASX:CYP)

Cynata Therapeutics Limited, a clinical-stage biotechnology company, is engaged in the development and sale of Cymerus™, a therapeutic stem cell platform technology. The Cymerus technology will be used to develop mesenchymal stem cells (MSCs)-based products for indications including graft-versus-host disease (GvHD), osteoarthritis, and critical limb ischemia, among others.

Phase II Clinical Trial in Limb Ischaemia Approved by MHRA

On 14 January 2020, Cynata Therapeutics announced that the UK Medicines and Healthcare products Regulatory Agency (MHRA) has approved the commencement of Phase II studies of the company’s product, CYP-002 for the treatment of critical limb ischaemia (CLI). The company will conduct the clinical trial across multiple sites in Australia and the UK.

Cynata Receives R&D Tax Incentive Refund worth $1.892 million

The company announced on 07 January 2020 that it had received an R&D Tax Incentive Refund worth ~1.892 million for FY2019. The refund improves Cynata’s cash position and can be used towards the ongoing Phase II programs for osteoarthritis and critical limb ischemia as well as the expected Phase II study for GvHD.

Stock Performance

The stock of CYP was trading at $1.215 on 15 January 2020, with a fall of 0.41% (at AEDT 3:24 PM). The company has a market cap of $125.68 million and approximately 103.02 million outstanding shares. The 52-week high and low value of the stock is $1.870 and $0.990, respectively. The stock has generated negative returns of 17.01% and 14.69% in the last three months and last six months, respectively.

LBT Innovations Limited (ASX:LBT)

LBT Innovations Limited, a med-tech company, offers technology solutions such as software engineering solutions using artificial intelligence and image analysis. The company focuses on the R&D and marketing of innovative technologies for the health care industry. LBT’s lead product, Automated Plate Assessment System (APAS®) powers culture-plate screening and analysis.

 APAS Independence (Source: Company Website)

Highlights from Biotech Showcase Investor Conference

On 14 January 2020, LBT presented at the Biotech Showcase Investor Conference wherein it highlighted the following pointers:

Worldwide market prospect

  • LBT anticipates that there are ~13,000 laboratories where APAS Independence can be implemented which indicate a huge potential for the technology platform. At present, there are 2,000 laboratories that meet the technology’s profile;
  • Limited competition having the first-mover advantage and due to the high-priced process automation solutions offered by competitors.

Value Proposition

  • Growing market opportunity by offering a higher number of analysis modules, which in turn will increase ROI for laboratories;
  • Focus on direct-to-market and partnerships with distributors for sales and marketing.

Outlook

  • The company will focus on developing internal competencies, partner with distributors to support sales, outsource non-core businesses, and develop a global platform.

Stock Performance

The stock of LBT was trading at $0.180 on 15 January 2020, with an increase of 5.882% (at AEDT 3: 35PM). The company has a market cap of $40.04 million and approximately 235.54 million outstanding shares. The 52-week high and low value of the stock is $0.250 and $0.058, respectively. The stock has generated returns of 54.55% and 41.67% in the last three months and six months, respectively.


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