finnCap Research Company Notes - 15 May 2018

Sector: Life Sciences

Premaitha Health (NIPT): Trading update – real underlying momentum

Key data                              

• Share price (p): 7.3
• Target price (p): 12.0
• Market cap (£m): 23.6
• Enterprise value (£m): 36.9         

The FY 2018 illustrates the strong momentum in the business. The Non Invasive Pregnancy Testing (NIPT) business has started FY 2019 at EBITDA-breakeven with annualised revenues running at £7.7m (+24% up on FY 2018). This excludes growth from existing customers yet to come on stream, the benefit of national reimbursement coverage to NIPT volumes in France (expected H2 2018) and new customer wins in high-volume markets that will be accessible due to new technology that affords a lower-priced NIPT (eg. India). The company also raised £2.5m by way of a placing at 4.5p, which is expected to be sufficient to get to cashflow-breakeven for the group as a whole. Although there remains the uncertainty of litigation with Illumina, the fact that Premaitha is in settlement discussions is positive, whilst growth initiatives are predominantly focused on territories where problematic IP is not in force (67% of revenues). We reinstate forecasts and a target price of 12p.

Mark Brewer | mbrewer@finncap.com

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