Analyzing a Precision Medical Technology Company using 4 Financial Metrics

Incorporated in 2009, Biolidics Limited (“Biolidics”) is a precision medicine medical technology company with a focus on developing a portfolio of innovative diagnostic solutions to lower healthcare costs and improve clinical outcomes.

Biolidics has developed and commercialised the ClearCell® FX1 System, a fully automated CEIVD medical device that relies on a novel, patented technology to separate and enrich cancer cells from blood, allowing users of the system to perform liquid biopsies to test for the presence of cancer cells (specifically circulating tumour cells, or CTCs) in blood samples or perform further analysis on cancer cells. In addition, Biolidics has formed an infectious diseases division to develop certified test kits with various diagnostic partners.

Evaluating Biolidics Limited using 4 Financial Metrics

Revenue & Net Profit

For FY2019, Biolidics’ revenue grew by 13.41% year-on-year to S$1.43 million. The increase in revenue was driven by higher sales of its ClearCell® FX1 System and related consumables as a result of an enlarged customer base contributed by laboratories that are in collaboration with the Company to develop cancer diagnostics tests.

With the higher topline achieved and a lower operating expense, Biolidics managed to reduce its losses to S$4.81 million, as compared to FY2018’s figure of S$6.25 million.

For its trailing 12-month financial performance, Biolidics’ revenue surged by more than 400% to S$7.5 million. The surge was mainly driven by the sale of COVID-19 Antibody Test Kits, while partially being offset by decline in revenue from the sale of ClearCell® FX1 system, CTChip® FR1 biochip and other related services.

As a result, Biolidics managed to reduce its losses further to just S$3.16 million in its trailing 12-month period.

Ownership

The single largest shareholder for Biolidics belongs to Clearbridge Health Limited (SGX: 1H3), which has a 22.77% stake in the company.

Clearbridge Health Limited is a healthcare company with a focus on the delivery of precision medicine in Asia. Its business comprises healthcare systems, medical clinics/centres and the distribution platform of healthcare solutions and technologies from its global clinical partners and strategic medical technology investments.

The 2nd largest shareholder belongs to Seeds Capital Pte Ltd, which has a 9.80% stake in the company. Seeds Capital Pte Ltd is the investment arm of Enterprise Singapore, where it supports the growth of promising Singapore-based startups.

Liquidity Ratio

In terms of liquidity ratio, Biolidics’ current ratio declined in FY2019 to 5.43 times. Despite the decline, the high current ratio indicates that Biolidics has more than enough current assets to meet its current liabilities.

Similarly, Biolidics also witnessed a similar decline in its cash ratio in FY2019. However, its cash ratio remains above 1 time, which suggests that it has sufficient cash to cover its current liabilities.

Free Cash Flow

Biolodics has registered negative free cash flow across the past 2 financial years. This can be seen from the losses incurred, which resulted in a negative cash flow from its operations.

For FY2019, Biolidics saw a 41.61% year-on-year increase in negative free cash flow. This was due to a negative change in working capital and a higher capital expenditure in the financial period.

Conclusion and Prospects

With a stronger trailing 12-month financial performance, Biolidics has managed to reduce its losses as compared to the past financial years. Coupled with the high liquidity ratio, this further highlights the strength in its balance sheet. However, investors will have to take notice of its negative free cash flow across the years.

In the press release dated 26th February 2021, Biolidics achieved a record revenue of S$8.91 million as the sale of COVID-19 Antibody Test Kits was the key contributor to the Group’s revenue growth in FY2020.

In terms of prospects, on the infectious diseases front, Biolidics aims to provide testing applications for the entire range of infection stages for COVID-19 and the following are the recent key milestones:

• In November 2020, Biolidics entered into a distribution agreement with JOYSBIO (Tianjin) Biotechnology Co, Ltd for the SARS-CoV-2 Antigen Rapid Test Kit (Colloidal Gold) (the “JOYSBIO Antigen Rapid Test Kit”). The JOYSBIO Antigen Rapid Test Kit has received the provisional authorisation from Singapore’s Health Sciences Authority.

• In January 2021, Biolidics launched the ClearEpi SARS-CoV-2 Antigen Rapid Test Kit (the “ClearEpi ART”), and this test kit has received confirmation for the CE marking. The CE marking indicates that the ClearEpi ART complies with the relevant EU safety, health and environmental protection requirements which enable the ClearEpi ART to be marketed in the EU.

In the area of cancer diagnostics, Biolidics has established various partnerships in Asia, for the development and commercialisation of a wide range of clinical or laboratory-developed tests (“LDTs”) using the Company's ClearCell® FX1 system and CTChip® FR1 biochip.

Join us on Telegram here: https://rebrand.ly/dab7ea