Opening a new thread for my current second-largest portfolio holding.
Genovis’s business concept is to develop, produce, and market innovative technologies that facilitate and enable the development of new treatment methods and diagnostics for medical device and pharmaceutical industry customers.
Genovis develops and sells technologies from two unique product portfolios. The first includes enzymes that facilitate the development and quality of antibody-based drugs. The second consists of nanotechnology in new contrast agents and focuses on the design, production, and characterization of nanostructures as contrast agents in medical imaging. Projects are primarily internal but also include collaborations with research groups at Lund University, among others. Sales in the U.S. market account for 42% and European markets for 37%.
A new report from Redeye was published today, in which target prices have been revised upwards quite significantly. As I understand it, this was because Genovis received its largest-ever order from a new business area in August, and this had not been factored into the previous target prices.
Redeye’s target prices have developed as follows:
BEAR BASE BULL
28.3.2019 5.0 11.0 26.0
30.5.2019 8.0 14.0 33.0
11.9.2019 12.0 23.0 70.0
The latest Redeye report can be found here:
At current prices, it seems that “quite” a lot is already baked into the company’s valuation multiples. I hope someone with a better grasp of the numbers than me will take an interest in the company and analyze whether the valuation multiples have gotten out of hand.
Today we have “Investor After Work” company presentations, where Genovis is one of the targets. A live stream of the presentation should be available here in the evening:
Genovis has quietly surpassed Redeye’s Base level (23 SEK) and has been steadily moving upwards. Many are probably wondering what the Q3 report will reveal on November 21st, and the tension is building. Are we heading towards a profitable fiscal year in 2019, or what might the outlook be?
A great company, technology, and on an upward trend. It’s hard to say anything about the share price, as one would need to be able to estimate future revenue and margins. The same challenge applies to all these early-stage biotech companies. Surely, analysts’ analyses are the best guess for a layman like me.
It’s best if you jumped in at the early stages, when your average price remains ridiculously low; then the whole thing is simple once the business starts rolling: just enjoy the strong ascent. The difficulty is sifting through the crowd to find those companies that will eventually become profitable.
No deals or agreements have been announced since the previous order in August (13M SEK), so my interest is focused on the order book and the progress of scalability.
My journey with the company began early this year, and it has become my best ownership so far, along with Hoivatilat (takeover bid accepted). I’m prepared to buy more if the company turns profitable and continues to grow and scale.
We are entering the fourth quarter with a strong cash flow from the previous quarter and stronger liquidity. We are now generating a surplus, which we plan to initially invest in product development projects in order to increase the launch rate of new products in 2020.
Redeye’s preliminary assessment of Genovis for early 2019 has been released; the assessment contains nothing dramatic and states that the company’s operations have progressed as expected. As a preliminary note at the end, a more thorough analysis is still to come, but it will not contain any “major” changes.
Genovis’ acquisition project from the USA was announced today. Quite a promising project. The stock price has indeed picked up recently, today it seemed to gain momentum by +9%.
Genovis intends to acquire QED Bioscience and conduct a rights issue of SEK 50 million. Genovis has signed a Letter of Intent for the acquisition of all shares in the privately held company QED Bioscience Inc. (QED), based in San Diego, California. The acquisition is expected to be completed during the first quarter of 2020 and is subject to the customary terms and conditions for possession. Genovis intends to make a cash payment for the acquisition and estimates that the purchase price including transaction costs will amount to approximately SEK 20 million. Genovis’ Board of Directors has simultaneously approved a rights issue for Core Ny teknik, Coeli SICAV II – Absolute European Equity, Islet 2AB, Andra AP fonden and Aktia Asset Management Ltd. which will raise about SEK 50 million for the company.
The thread is quiet even though Geno is hitting new ATHs every day and with decent percentages.
The climb is already scary, but I’ve learned (through many embarrassingly bad trades) not to rush but just enjoy the ride. Insiders are buying and the sector itself is hot.
One could imagine this company being on some big company’s shopping list; while waiting for an offer, let’s enjoy the fruits.
Yep, a couple of times my fingers almost started typing here, but I didn’t dare, so the flight wouldn’t be interrupted.
The scary thing is that I haven’t seen any other announcement than that Q2 will be bad.
I wonder if there will still be an opportunity to add more before Q2, when this rise starts to stabilize.
Edit.
First purchases a year and a half ago, but I’ve AGAIN been fiddling around for nothing.
