New analyst report from Sequoia (who has covered the stock well in the past): https://www2.asx.com.au/content/dam/asx/broker-reports/2022/ubi-update-sequoia-180322.pdf

Highlights:

We understand that UBI sold ~700 Sentia devices in CY21, of which we expect about 500 would have been deployed in the field and around 200 held in inventories of the various distributors.

We understand that Mayo has at least 6 other bio-markers that may be suitable for the UBI biosensor platform technology, hence the broad collaboration agreement.

HRL Outlook – UBI believes it has only a small number of competitors in this area, and that there are strong prospects to double or triple this business over the next few years.

Stride – Strong sales expected in 1Q22 (includes Siemens re-ordering).Xprecia Prime (PT / INR blood coagulation tests) – Next generation product – Timing: European launch expected June.

Elevator Pitch:

UBI has perhaps the strongest and most validated biosensor technology platform in the world. Previously they developed products that made their commercial partners billions of revenue. Now it’s time for UBI to make billions for themselves. The broad model is to use their world-class biosensor platform to develop handheld devices that have the same performance as laboratory tests, thus bringing the long and costly process of laboratory testing into the point of use for the user.

They have two disruptive products already on the market (wine and coagulation) that have substantial cost and productivity improvements over competition. These two products alone could generate $50 million+ in revenue and substantial profit at scale, which will go towards funding R&D on even more disruptive products in bigger medical markets (e.g. cancer). This product set will likely increase over time as any institution or company that needs a powerful biosensor platform is incentivized to partner with UBI. Future tests for fertility, Covid, and environmental monitoring are expected over the next few quarters. UBI’s recently-joined CEO voluntarily left his last company after growing it 100x to execute on this opportunity, and UBI’s chairman is buying every share he can get his hands on.

Detailed pitch:

• Universal Biosensors (UBI) $160m AUD is a biosensor company and world leader in electrochemical cell technology. 
• The technology is a portable device that provides results from just a finger prick of blood. 
• The company’s patented technology platform has been licensed and used by Johnson and Johnson (then sold to PE) and Siemens to deliver more than 10 billion diagnostic tests generating billions of dollars in sales. This is the most validated finger prick technology platform in the world. 
• The company has a razor-razor blade revenue model. For example, Sentia described below is a $2,000 device sold to a winery will likely produce $5,000-$10,000 per annum in recurring revenue at scale.
• UBI has taken back control of its technology and is building a multi-product stable of biosensors in large markets to generate ongoing revenue streams. 
• The company has entered two verticals (wine and coagulation) and both are growing 100% per year albeit off of small bases. 
• Sentia, the company’s wine diagnostic, has captured 8% of the Australian wine market in only 8 months - during Covid lockdowns. The company has sold approximately 1,000 units since last March. The company has signed distribution deals in 12 countries and believes it can capture 20%+ of the global market ($100 million recurring annual opportunity). 
• Xprecia Stride, coagulation monitoring device, has 1.5% market share, and they are launching next generation version Xprecia Prime (more accurate and half the cost as market leader) next year and expect to be able to get to 5-10% market share rather quickly with their current distributors. ($40 million recurring annual opportunity)
• In addition, UBI is developing a Veterinary Glucose Monitoring product for monitoring glucose in cats and dogs. Anticipating launch in H2 2022.
• The current installed bases of Sentia and Xprecia alone should generate $15m+ in revenue in 2022 once all of the Sentia tests are released and Xprecia customers are migrated to UBI. Anticipated growth in the installed base increases this revenue potential.
• Blue Sky - Developing Next Generation Applications 
• The company signed a worldwide exclusive for the rights to Lubricin which when applied to the company’s biosensors can see down to the Picomolar level (ie becomes 1 million times more sensitive). The company believes it can now detect blood biomarkers, hormones, and environmental pathogens.
• Proof of Concept Studies: 
• Cancer Biosensor – working with Peter Mac, Victorian Cancer Biobank and CIC bioGUNE on a trial to be completed Q1 22’ to see if they can track cancer progression with a single drop of blood. $17 billion opportunity. 
• IVF – Proof of concept work being done on monitoring of fertility hormones. $2 billion opportunity. 
• Aptamer – saliva based instant COVID test for viral load (unique) and other applications. 
• The company is on $5m run rate, and could exit calendar 22’ at $20m run rate, growing 50-100% into 23’ and profitable. 
• They have $18m in cash and enough to get to profitability. 
• New CEO took over June 2020/ previously took ASX listed company MVP from $10m to $700m market cap. He will own 6% of the company if he hits certain sales, market cap, and/or buy out thresholds ie he’s highly incentivized to grow the business and the stock. 
• Chairman just bought $1 million in open market at these prices.