Thread by @BigBiteNow

(1/8)
#GDR trading update 10th July.

"Over £1.0m of indicative orders for Genedrive® 96 SARS-CoV-2 kit, pending regulatory approvals" is a very solid start, given that they are working through those regulatory approvals.

More importantly on a 2021 thinking basis.

(2/8)
"Year-end cash of £8.2m"

"expectation remains to sign a new contract with the US DoD in autumn 2020"

"Autumn 2020 timeframe for commercial launch with Inspiration Healthcare Plc" of AIHL test being validated at Manchester and Liverpool hospitals.

(3/8)
In the 12th June presentation piece, DoD contract was expected to be c. £5m over 3 years. So c. £1.7m per annum. Est. 50% margin = £850k

For the AIHL test "Global market value estimated at £40-£65M per year"

Of course that is full Western market, which

(4/8)
won't be fully realised in 2021

UK market around 7% of that with success at Liverpool/Manchester, giving GDR the ability to roll out across Europe.

So for me 10% of that market is very much possible,. meaning c. £4-6.5m in sales depending on route to market.

(5/8)
"Test economics - <£10 to make, £35 to distributors, £50-£85 direct depending on reimbursement / country"

At a conservative average sale price of £40, GDR can make c. 300% per test.

So above sales equates to between min. £3-4.9m gross profit in 2021.

(6/8)
I am acutely aware that GDR is being driven by its Covid image but a longer term outlook is for me more appropriate, given that these contracts should start to be seen in H2 2020 (GDR H1 2021)

Yesterday's closing MC was £53m.

(7/8)
Looking the above figures, GDR is capable of c. min £4-6m gross profit in 2021 without any Covid sales.

Add in the £8m cash and for me, we start to see that at least half of the current MC, is supported by developments outside of Covid test sales.

(8/8)
At 60% gross margin on the Covid test, it really won't take a great deal of sales, to satisfy what is c. £27m of valuation, when considered over a longer time period.

£1m is a solid start and I expect sales to really gain traction over the coming months.

(8A)
In terms of the #GDR Covid test itself ;

"in the process of registering the Genedrive® 96 SARS-CoV-2 Kit in multiple overseas regions"

"has signed a number of distributors across Africa"

"in discussion with several interested partners to access the US market"

(8B)
"working to ensure that CE marking claims for the Genedrive® 96 SARS-CoV-2 test can be expanded to include a broader range of laboratory systems"

"now validating the data for the ABI 7500 FAST and BioRad CFX96 systems to expand its claims."

(8C)
"our target markets combined with the unique aspects of the CoV-2 Test give us significant confidence in delivering successful commercial outcomes in the near future."

Significant confidence.

(8D)
Driven by what is a market leading product that is entering a market that is short on supply and where it isn't, quality will win the day in the end.

GDR needs a little time to breathe with this but for me, the demand is clearly there.