A bit late again in getting around to diving into the H1 report and Orsila’s interview. For me, this has been a quite interesting investment story and on my watchlist for several years already. I’ve been pondering these three (light-strategic) risks a bit… Please throw in some good counter-arguments, so I might dare to jump on board?
Are the 36 projects really 36 separate opportunities?
If I have understood correctly, Modulight’s projects largely use the same technology platform, factory, and cloud service. While this is efficient, lowers costs, and secures strategic in-house elements, does it also mean the impact of a single shared problem could spread across many projects?
E.g., a quality issue in the semiconductor process, a cloud service disruption, a cyber issue, or an update required by authorities could hit multiple customers simultaneously. And doesn’t the FDA require connected medical devices to have continuous vulnerability monitoring and update capabilities..? In other words, 36 projects do not necessarily mean 36 completely independent lottery tickets, so I am wondering about this cumulative risk cluster?
Growing number of sites = automatically better cash flow?
In the PPT model, as I understand it, Modulight has to install, validate, maintain, and secure the device even before treatments are performed in sufficient quantities. For example, if reimbursement for the drug is delayed, there’s variance in patient volume, drug supply issues, or the treatment model simply fails to take root in the hospital. Modulight is left with the costs of the device but without the corresponding treatment revenue.
From the perspective of my own investment story, I think it would be essential to get treatment volumes, utilization rates, and revenue per site into Modulight’s reporting, rather than just the number of sites. In these aforementioned KPIs, a few quarters of growth + scaling of X sites = trust in the PPT concept. It would be great to hear more about these, and I believe transparency here would build that trust among the investor community residing in the “Hervanta canyon”.
Local production in the US = overlapping investments?
Modulight has stated that it is advancing local production in the United States. Of course, this is understandable from the perspective of customers, geopolitics, and tariff risk management, but it also sounds potentially expensive. Tampere factory capacity is certainly not in full use, and starting regulated production in another country requires equipment, personnel, quality assurance, process expertise, audits, etc…
Does US production sound more like the beginning of additional funding and share dilution rather than a growth engine…?