genedrive plc (LON:GDR) is a commercial-stage company focused on point-of-care/need molecular diagnostics and biomarkers. Its Genedrive® in vitro diagnostic testing platform is at the forefront of this technology, offering a rapid, low-cost, simple-to-use device with high sensitivity and specificity in infectious disease diagnosis. The rapid and accurate analysis of patient samples aids significantly the clinical decision process, with point-of-need testing particularly important in emerging markets. Hepatitis C diagnosis is a multi-million dollar market opportunity, which is well supported by the WHO and other philanthropic organisations.
Strategy: Now that the technology platform has received CE Mark, the new management team has completely re-focused the company onto the commercialisation pathway for diagnosis of infectious diseases, signing two important commercial agreements with Sysmex, a major global player.
Genedrive: With global healthcare focused on early intervention, the need for fast, accurate point-of-care/need diagnosis, particularly in remote locations, is obvious. The company has been validated through CE Mark and the Genedrive HCV ID Kit is being launched into a big commercial opportunity in emerging markets.
Valuation: To highlight the disconnect in valuation, we have compared a number of quoted in vitro molecular diagnostic companies with an emphasis on those with hand-held/bench-top PoC/PoN analysers. About £30m has been invested, both in Diagnostics and Services, to get the company where it is today.
Risks: The platform technology has been de-risked through the receipt of CE Mark for its first two assays – hepatitis C and tuberculosis. The main risk is commercial, given that it often takes time for new technologies to be adopted. However, partnering with a major global player significantly reduces this risk.
Investment summary: Genedrive Plc technology ticks all the boxes described for an ‘ideal’ in vitro diagnostic that satisfies the need for powerful molecular diagnostics outside the hospital setting. The hepatitis C market is a global opportunity end remains very large, even in the target developing countries. With a strong commercial partner, early evidence of sales traction will highlight the valuation anomaly.
