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. 

Knowing that most don't follow here but I will still post some thoughts

Just found that over 19m was spent for FDA approval possibly in the last few years.

But the crucial thing is in the last report 2.8m was spent and maybe 1.2m the year before

If you strip out the FDA expenses, Cyclopharm still isn't breakeven - perhaps 3m loss last FY and the same previous year.

This is the likely reason why there is still nervousness even after FDA approval

In addition, they still need to spend money for the US market launch even though they have 8.2m of inventory for that market. So there is about 20m allocated for the US market launch. In other words, I don't think CYC will be profitable until FY25 (hoping I'm wrong though). There was also the presso with the CR mentioned by accident that was retracted the same day last week!

Should have done more research before on why they are not breaking even with so many countries ex-US on board.

Hope CYC can become cashflow positive after US launch.

So despite the FDA news, this is more a wait and watch until we can see something meaningful in the financials.

Having said that, Bell potter increased the price target to 4.25. But looking at their track records, especially with CXL I don't think BP can be trusted

[held]

Cyclopharm finally receives the coveted FDA Approval for Technegas

No Trading Halt

Interesting. Does that mean Trading Halt going into FDA approval for other listed cos bad news?

Anyway patience has been rewarded. 180m potential opportunity level unlocked.

Next step is achieving the "Beyond PE" objective.

Wish I held more but always need to think about the potential for disappointment when you have binary outcomes.

[held]

Cyclopharm released their latest presentation. Expecting a response from FDA review around 29 September and much of the rally being driven towards that date.

Cyclopharm has been working on their CRL response for over a year after FDA had questions on their process last year.

A few points to support an investment case is that there is support from the Nuclear Medicine community in USA on Technogas and it is already being used and earning revenue globally ex-America.

So the FDA approval seems less binary than before.

But you never know with the FDA and there is still a chance FDA will issue a SECOND CRL. Can't remember who, but I did see FDA issue multiple CRLs in the past.

[held]

USFDA Completes Pre-approval Site Inspection:

Cyclopharm Limited (ASX: CYC) today advises that the United States Food and Drug Administration (USFDA) has completed the site inspection of the company’s manufacturing facility at Kingsgrove, New South Wales, which was undertaken between 31 July and 8 August, 2023.

Cyclopharm CEO James McBrayer said “Technegas will be regulated in the United States as combination product.

The inspection covered both the drug and device elements of Technegas.”

 “While the inspection report will require further internal FDA review before it is final, we are pleased with the process and are confident that our USFDA’s goal review date of 29 September 2023 remains on track,” Mr McBrayer said.  

As previously advised, Cyclopharm confirms its expectation that USFDA approval will create an initial addressable market in the USA of US$180 million per annum in the diagnosis of Pulmonary Embolism (PE). 

This estimate does not include the exponentially larger potential for Technegas’ application for Beyond PE indications, including the diagnosis and management of Chronic Obstructive Pulmonary Disease, lung cancer, asthma and Long COVID. 

Not a big amount but at least the trend is positive.

Record revenue $15.3 million, up approximately 39% on pcp, including:

• Technegas TM revenues steady on pcp, at approximately $7.6 million
• Third-party distribution sales up approximately 116% on 1H 2022, to approximately $7.7 million.

Looks like the revenues flatten out in the 2nd half versus 1st half. So may expect growth to be not as much in 2H23.

[held]

Cyclopharm is a diagnostic imaging company specialising in lung diagnosis of PE or Pulmonary Embolism. Their main product is Technegas, an imaging agent that is breathed by the patient to get a picture of lung health and signs of PE.

Technegas is selling in over 60 countries except the US. But it is well regarded among the medical community in the US. They also want to look at other applications in monitoring COPD and other lung conditions.

However it is still waiting for FDA approval in the US and they have been making losses over the last few years while they make preparations to enter the US market and they were negatively impacted by the Covid pandemic.

In April 23, Cyclopharm submitted their answers to the CRL (Complete response letter) from the FDA on how they produce Technegas and is hoping they will get a positive decision back by Sept this year. This I believe is their only roadblock in pursuing their goal to use Technegas for other lung conditions.

The other point is they have paid a dividend despite having negative net income and retained earnings. See below

I'm not sure how that works, maybe someone here can answer that.

But they do have 20 million in cash and raised cash last year at 33 million presumably to scale up in US once they thought they get FDA approval last year which is now hopefully Sep 23.

Interesting company but a few flags here. Will be interesting once the review is complete and FDA grants approval this year.

One of my tax loss purchases and has held steady since I bought the dip.

[held]

USFDA APPROVAL PROGRESS FOR TECHNEGAS AND BUSINESS UPDATE   Cyclopharm  Limited  (ASX: CYC) is  pleased  to provide  the  following update on its  progress  towards  gaining United States Food and Drug Administration (“USFDA”) approval to begin sales of Technegas™  into the US, preliminary (unaudited) revenue performance for FY20 and other operational matters.  Highlights  ? USFDA approval targeted  for Q2 on  track and progressing well with a pre?approval audit  scheduled for the week commencing 29 March 2021.  

Strong  support  for  Technegas™  in  the USA  expressed  from  frontline  healthcare  workers  based on safety concerns of competitive products. 

 Total unaudited revenue for 2020 was in line with prior year at $14m AUD.  

Technegas™ procedures rebound following initial reactions to the COVID?19 pandemic.   

 Technegas™ H2 consumable sales recover sharply post initial COVID?19 impact: revenues up  39.2% in H2 over H1.  

 3rd Party Distribution up 79.1% in H2 over H1 to $1.3m AUD.  

 In  anticipation  of  US  market  entry,  the  Board  is  considering  appointing  an  additional  Director during 2021. 

 Favourable  progress  is  being  made  with  regard  to  the  litigation  process  against  former  employees. CYC remains confident it will achieve a successful and complete resolution to all  matters in 2021.