Medlab Clincial Ltd (ASX MDC) released an operations update today. The MDC share price jumped 8.57% higher to $0.380 off the back of the news.
The company’s revenue during the June 2019 quarter leaped to over $3 million, up about 135% on the corresponding previous period. It also made significant progress in commercialization and marketing of its products.
About Medlab Clinical Ltd
Medlab Clinical Ltd (ASX MDC) is an Australian life science company specialising in novel therapeutic discoveries to counter chronic disease. Its research has three main components:
- Bacteria-based, from the human microbiome, producing revenue earning nutraceuticals and drug candidates
- Cannabis-based medicine, producing drug candidates for pain management
- A nano-particle medicine delivery platform, NanoCelle, achieving faster absorption, lower dosage
During the June 19 quarter, the company earned revenue of $3 million (excluding discounts and R&D incentives) which was higher by 135% compared to the same quarter last year.
“The results show significant improvement in the commercial results of the Company and are the basis for a fundamentally strong financial platform moving forward,” the company said in its operational update.
Note that the company describes itself as commercial biotech. It has the following three emerging revenue streams.
Bringing research to market: commercialisation
In its nutraceutical segment, during the last quarter, Medlab Clinical completed the commercial rollout of its self-branded neutraceutical products into 3,000 Australian pharmacies under the Priceline and Terry White pharmacy chains.
In the medical cannabis segment, Medlab Clinical entered an agreement in May 2019 with Thai listed pharmaceutical company, Mega Lifesciences Public Company Limited for the distribution of Medlab’s cannabis-based medicine, NanaBis in parts of South America. Before that, in March 2019, Medlab tied up with Canadian pharmaceutical company, Pharmascience Inc. for the further development and distribution of NanaBis.
The R&D / market progression is shown below:
Cannabis-based medicine, NanaBis
The company’s cannabis research via its NanaBis and NanaBidial products is progressing well and showing (for NanaBis) “strong, encouraging results.” The company’s NanaBis trial is the only one of its kind in the world for cancer pain management.
It’s interesting to note that NanaBis has potentially very significant and unexpected patients cohorts in areas beyond cancer pain, which is the primary endpoint.
In fact, NanaBis is approved for other uses under the Government’s Special Access Scheme.
Despite today’s sharp jump, the MDC share price is still down from its 52-week high of $0.54. On the valuation front the company compares very favourably with the sector as follows:
Given the reasonable valuation, emerging commercialization, and the potential from cannabis products, the outlook for MDC may be considered as favourable.
Are you still looking for the best stocks to buy in 2020? We've put together a free report on 5 stocks that we think are the best buys on the ASX right now. Download it instantly here.
This is general advice only. MF & Co Asset Management has not considered your personal financial needs, objectives or current situation. This information is not an offer, solicitation, or a recommendation for any financial product unless expressly stated. You should seek professional investment advice before making any investment decision.