4basebio H1 results

4basebio AG (4BSB.D. Market Cap €103m or £94m, €2.13, 4.0% of JIC Portfolio)

H1 Results:

Conclusion: The statement reads well.  It’s still early days but the company looks to be making good progress towards becoming a supplier of DNA products for the medical and research industries. Dr Heikki Lanckriet has done it before, building a successful proteomics business which he sold to Abcam in January. Hopefully, he can do it again in this new but related field. I normally do not like “blue sky” stories, i.e. ones where there is no profit forecast for a few years, but have made an exception in this case. There are three main reasons: First, Dr Lanckriet has a track record of building and commercialising a business; the new business should see rapid growth as demand for DNA increases with new clinical applications and last, it has a strong balance sheet. The current share price is underpinned by liquid resources. With its forecast cash burn for 2020, it looks like it is not squandering those resources. I have it as Medium Risk/High Reward. I’m happy with that but acknowledge that the Risk rating is where some might differ at this stage in its development. Happy Holder! 

There will be a conference call and slide presentation at 2:00 pm BST. Details below:

Results were obviously flattered by the sale of its proteomics business to Abcam in January.

The main points are that it had €100m cash and liquid assets on 30th June.
Total assets at 30th June were €104.5m
….and it reports ‘ongoing” progress and investment in its DNA manufacturing capabilities.

It expects to open a second laboratory in the UK this quarter.

It reports that it has identified, and discussions are ongoing, with potential partners for GMP grade (Good Manufacturing Practice) of DNA products suitable for clinical and pharmaceutical applications.

It is looking at a buy and build strategy but remains cautious on valuation grounds.

Numbers: In Q2 continuing operations recorded revenue of €297,000. The group expects to meet full-year revenue forecasts. H1 ongoing revenue was €507,000. Total expenses were €2.7m.

No news yet on the potential Sparta AG offer. “The management board and the supervisory board of 4basebio will submit a statement on the offer following the publication of the final approved offer document.”

Outlook: “For the fiscal year 2020, 4basebio reaffirms its guidance of 24 April 2020: The operational cash burn for 2020, excluding expenses relating to the Abcam transaction, is expected to be between EUR 2.5 million to EUR 3.5 million with revenues between EUR 0.5 million and EUR 1.0 million.”

“Following on the very strong Q1 performance with the sale of our proteomics and immunology assets to Abcam, in Q2 we continued to focus on the development of our proprietary DNA technology,” commented Dr Heikki Lanckriet, CEO. “We are very satisfied with the progress we are making in establishing academic and commercial partnerships to support the validation and scaling of our DNA. This also is highlighting exciting opportunities to work across a range of promising gene therapy delivery systems.”

Conference Call:
4basebio will host a conference call for investors and analysts conducted in English) today, 13 August 2020, at 3:00 pm CEST/2:00 pm BST, to discuss the consolidated financial statements for the half-year ended 30 June 2020 and important developments during the reporting period and to provide a strategic update and financial outlook.

Interested parties may pre-register and will receive dedicated dial-in details to easily and quickly access the conference call by following this

The conference call will be accompanied by a slide presentation which can be accessed during the call by following this link:

https://78449.choruscall.com/dataconf/productusers/4basebio/mediaframe/39333/indexl.ht ml (Presentation only, no sound – advised for participants on the phone)
Please dial in 5 minutes before the beginning of the event.

A conference call recording will be available on the Company’s investors website www.investors.4basebio.com.

 

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