In Eastern countries, the case numbers are quite staggering. The image also shows a forecast. Many people nowadays also consider parts of Eastern Europe as Western countries,
The closer Aiforia gets to its goal, the slower the pace becomes, because it’s worth modeling high-volume cancers first and small ones last, as the workload is the same but the benefit is greater for the large ones.
In my opinion, the potential is much greater; I assume that this would be used to review a significant portion of gastric mucosa pathology samples for cancer detection, which are taken in large quantities during gastroscopies.
According to the AI, 10% of the pathology sample volume consists of gastric mucosa samples.
Undeniably, in a gastroscopy, samples are taken from several locations in the stomach as well as the duodenum, meaning the routine volume of PAD (pathological-anatomical diagnosis) samples is many times higher compared to the number of gastroscopy procedures.
The new CE-IVD markings might not necessarily show up in revenue for a while, but they significantly increase the potential of becoming an acquisition target. It seems Aiforia is still well ahead of the others in terms of the number of diagnostic targets?
Yeah, Aiforia’s revenue from various solutions cannot be directly inferred from cancer percentages. Indeed, it’s more likely to have a tube down your stomach than to have a needle biopsy taken or a lung biopsy “fished out” during an endoscopy or surgery. Thus, these gastric cancer solutions might be at the top in terms of sales. Aiforia’s press release mentioned that “Certain forms of gastric cancer are particularly difficult to identify, and they can easily go unnoticed in a routine examination.” This would suggest that Aiforia’s solution could be routine in endoscopies, even when cancer is not specifically being sought from a suspicious mucosal area. @Antti_Luiro could probably grill Jukka on this to see how they view it.
Here are Antti’s comments following Aiforia’s release of a new CE-IVD marked AI solution for gastric cancer diagnostics.
Aiforia announced on Monday that it has released a new CE-IVD marked AI solution for gastric cancer diagnostics. The Aiforia® Gastric Cancer AI application is designed to support pathologists in cancer detection and reporting. In our assessment, it strengthens the company’s position as a market leader in clinical digital pathology in Europe. We view the announcement as a logical continuation of the company’s strategy to expand its clinical product portfolio and leverage its new Foundation Engine technology.
It looks like Siemens Healthineers has some sort of earnings release tomorrow, along with an annual general meeting and other things providing future guidance. I wonder if the analyst will find any information there that supports Aiforia’s development, as I’m very interested in those partnership arrangements.
Any idea what’s driving this downtrend? In principle, the company has already funded its operations for the current year, so an immediate share issue isn’t a looming threat, and the company’s message is that the clinical sales scaling phase is beginning. From an investor’s perspective, this should be a “sweet spot” for entering the case, yet there seems to be more desire to get out.
There is a general pessimistic atmosphere as there have been disappointments in the Finnish biotech scene. People no longer trust mere promises of improvement, and patience is running out when multi-fold returns can be found elsewhere more easily or faster. I also view the company’s development positively, but the Bioretec losses are still gnawing at the back of my mind after believing the CEO’s talk more than the raw numbers. I’m keeping a close eye on it and am ready to add more Aiforia shares to my portfolio if a so-called “hockey stick” starts to develop in terms of sales.
I have it in my portfolio, but only as a tracking position.
Just as @NanoCapKenobi says. Personally, I don’t invest in these still loss-making biotechs with anything other than a multi-year horizon.
The share price sawing downwards provides a buy signal. It has to rise to exit levels for it to leave the portfolio voluntarily or by force. Medtech-biotech are the only small caps I understand something about. Of course, one understands the operational logic of the retail sector, but then again, so does everyone else.
The core of my own portfolio, however, consists of completely different boring boomer stocks.
Faron showed an example of what happens, at least momentarily, if money is raised via a rights issue. Aiforia will likely get the funds through a directed issue or a loan, but you can always fear the worst if you feel that’s how you get by.
With Aiforia, we’re waiting for deals and then revenue from them. The position is good regarding the products. Jukka mentioned that one deal from the Siemens H. partnership should materialize by the end of the year; nothing has been heard yet. I don’t know who is allowed to announce those.
Faron is quite an extreme example, as its business seems to be a so-called binary case. It either succeeds or fails; there is no middle ground.
Aiforia has a much broader spectrum of potential futures, and substantially lower capital requirements for growing the business from this point onward.
Well, the latest dip is quite clearly due to Faron (and Optomed). Probably the “retail crowd” got spooked, and many interested in these kinds of stocks may have invested in both, so some “believer” might be selling other suitable holdings to prepare for Faron’s share issue or wants to “scoop up on the cheap” when liquidity isn’t otherwise available. Or Nordnet’s margin calls are hitting. In my opinion, there is no justification for the latest dip and I bought a good amount, and I’ll buy more if I can still get it cheap. The financing arrangements work quite differently with this company. There won’t be any 40 million share issue; instead, pieces of financing have been arranged very neatly at a small discount as needed.
Too bad I didn’t have a buy order out this morning, but now I’ve put one in…
It is certainly possible that deals have also been made below the disclosure threshold. I believe there were a few such deals in H1 as well. If I recall correctly, a few deals were pushed to H2, Lombardy and some other one. Additionally, one would think scanners have been installed and slides have started running through.
I don’t know what Aiforia’s deals are like, but can anyone estimate the price of a single slide? Or are the slides included in the original deal amount? Regarding Fimlab, there was talk that in December they were at a pace of 35,000 slides (per month?).
Does anyone know/have the energy to check if the first contracts expire this year and negotiations for extensions begin? It would also be interesting to find information on where tenders might be underway
Pre-results update.
Despite the share price, target €3.80 & Buy
Summary:
We remain upbeat on Aiforia’s Foundation Engine and its clinical and commercial scalability. Aiforia’s clinical footprint now covers breast, prostate, and lung cancers, strengthened by its new gastric cancer model. Supply–demand dynamics are supportive as hospitals face rising pressure to digitise pathology and adopt AI. In Lombardia, ~400 pathologists in 2025 are expected to fall by ~100 (due to retirements) by 2027 with only nine replacements, underscoring urgent automation needs. FY26 should bring additional tenders, including HUS, Finland’s largest hospital group (potentially in Q2). We reiterate our BUY rating with a € 3.80 PT based on our DCF model.
Without taking a position on the analysis itself, Nuways has a “buy” recommendation for almost every client, “under review” for a few, and a few unfortunate ones have been assigned a “hold”. In Germany, these views are consistently very positive.
From what I’ve seen of German companies, local research houses seem to operate on an “automatic-buy, target price 2x current price” model.
I’ve been checking the Siemens Healthineers website to see if there are any mentions. It seems like there are big medical events happening right now, with more to come. AI and imaging are being trumpeted everywhere. I have strong faith that some of this will benefit Aiforia too, but this really tests one’s staying power.
That pathology field covers a lot of ground, and I suppose it’s about interpreting all kinds of samples digitally using AI, whether we’re talking about cancer, Alzheimer’s, etc., and I guess it relates to imaging depending on how one interprets it.
Imaging in this context refers to radiology, so the ambiguity you mentioned does not exist. Aiforia’s solutions are for clinical pathology and, as far as I know, they haven’t expressed interest in moving into competition for the analysis of radiology images.
