Bioventix (BVXP LN) Mkt Cap £90m Net Cash £5m

Great set of H1 results from mono clonal antibody producer, Bioventix, today. To remind you Bioventix produces Mono clonal antibodies (MABs) made from Sheep blood cells. Antibodies bind to a particular molecule (antigen). So specific antibodies ONLY bind to specific antigens. Bioventix's targeted antibodies are used by the manufacturers of blood testing machines like Siemens, Roche and Beckman Coulter. The genius move was to charge a royalty on each blood test performed using one of Bioventix's MABs. Typically Bioventix gets paid 1-2% of the cost of each test by the blood testers, so for an average test that costs $1 to perform, Bioventix will get 1-2c. As it is a royalty it explains why gross margins are above 90% as there are virtually no COGs for Bioventix. Here is my more detailed write up from November 16 http://www.stockopedia.com/content/bioventix-wide-moat-strong-growth-high-roce-excellent-cashflow-and-reasonable-valuation-159160/

But back to todays H1 results:

Strong across the board: revenues up 32% to £3.1m. This is partially explained by currency movements as c80% of BVXPs revenues are generated ex-UK, mainly in USD and Euros.Management estimate that 15-20% of the 32% growth is due to currency. So undelying growth is 10-15%. I think this is a bit poor to give a 5% range on currency. They should be able to work it out.

The underlying growth is attributed to Vitamin D antibody sales. But there is no granularity in the sales growth. Again this is poor. The whole release is only 30 lines long. I have met Peter Harrison a couple of times and he does not strike me as a man given to complacency but why are these results so brief ? Maybe the advisers, FinnCap, should be doing more to encourage greater disclosure.

Gross margins improved from 91% to 93% and despite 32% sales growth, admin costs were flat at £446k. That is proper operational leverage.

The shares have rerated to PE 21x Sept 17 on my numbers and there is the quite major obstacle of the loss of £800k of revenue (and effectively profits) from the end of the NTproBNP licence agreement in July of this year. This is hopefully being offset by the start up of Siemen's Troponin test, initially in W Europe. However the timing of this royalty stream is unclear. So on…

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