CYC released today their half yearly, revealing revenues up 5% and an operating cash flow loss of $12.5m. CYC has cash of $20m as at 31/12/24.  The market has reacted to the announcement today with a 20% share price fall.

Their lead product “Technigas”, is a nuclear lung imaging product developed in Australia in the mid-1980s and now used in 65 countries around the world. What is interesting about Technigas is where they have entered a market they have eventually become dominant. An example is the Canadian market, where it has taken them 20 years, however they now have near 100% market share in their particular nuclear medicine field.

In October 23 CYC received FDA approval for Technigas, and are currently rolling out in the US. CYC received a favourable reimbursement decision from Medicare and Medicaid in July of 2024. However their US rollout has not met expectations.  CYC indicated in May 2024 they were targeting 300 installation by December 2025. Most recently they are now they saying:  “…..reach 250 – 300 installed Technigas units in the US by the second half of 2026”.  

The “sales” seem to be happening, however getting the machines installed and generating revenue has been more difficult.  Recent US agreements to install have been:

• October 2024 Veterans Affairs – up to 120 hospitals
• January 2025 Hospital Corporation of America – up to 169 sites.

One clear downside risk with CYC is the spectre of some other technology surpassing Technigas. (The ASX listed 4DX is giving it a good crack with their lung imaging based on CT scans. Though with sales in the last quarter of only $1.3m and a capital raise every year since their 2020 listing, it is not going well. Their last capital raise was this month for an amount of $12.5m and to get it away they have deeply discount, plus giving a 1:1 option, plus a 1:1 piggy back option. Investors are losing patience).

CYC is in many ways like BOT in slow motion.  Both are trying to break into the US market (both with FDA approvals and reimbursements in place) and both have success examples elsewhere (Japan and Canada).  And I guess like BOT, you either believe there is something of value in CYC or don’t.