imo this research report while highlighting the upsides which should be known to all holders, also underlines the main risks with investing in HTX. For me the two main are:
1. Funding risks. RM Research point out that funding of A$ 10 m is necessary for future development. The current market cap is $10.8m so we are essentially looking at having to double the market cap by issuing more scrip. At the moment there is simply no financial reward for ordinary shareholders as they are continually and monthly diluted by the issue of shares and bags of oppies to SpringTree at a discount to the market price.
2. Uptake of the product. Virtually all announcements from the company carry the following blurb:
HealthLinx uses biomarkers to develop best practice diagnostics that detect and monitor diseases. First commercial targets are: ? Ovarian cancer diagnostic (OvPlex) targeting US$270m pa market ? Prostate Cancer targeting US$350m pa market
The company has not provided specific sales guidance to the market. The above blurb certainly engenders blue sky potential in the imagination and is the reason why it hit 22.5c earlier this year. The last quarterly indicated receipts from customers of only $26k which is quite insignificant compared to the numbers presented above. There might be receivables paid after quarter end which would increase the revenue but I am sure the company would have disclosed that to market if that was the case. It will be important to watch the September quarterly to see if sales are improving.
Still I think Healthlinx is a great story, not least for the lives it has probably saved and will save. But will it generate financial reward in the short to medium term for shareholders other than SpringTree. I find it hard to see at present.
HTX Price at posting:
7.2¢ Sentiment: None Disclosure: Held
