Genetic analysis specialist Premaitha Health (NIPT:AIM) has cleared its first hurdle since IPO'ing 4 July 2014 at 11p per share, but greater challenges await. Securing clearance to sell its highly accurate pre-natal diagnostic device IONA with European authorities has effectively thrown open the doors on an estimated $4 billion a year market, according to Panmure Gordon's calculations, so it comes as little surprise that the news has ignited excitement among investors. The shares jumped 7.4% to 23.6p on today's announcement.
The key to IONA's success, and the company's, is the device's industry-leading 99% success rate. Used for screening foetuses in the womb for genetic abnormalities, such as Down’s syndrome, it does this by analysing proteins in an expectant mother’s blood.
Premaitha reckons the typical accuracy of existing devices is nearer 90%, implying fewer false positive tests, therefore cutting the need for further testing, not to mention costs. Time is another positive factor. The IONA device can turn round results in three days, far faster than the typical two weeks its takes to send samples to labs in the US or China.
Panmure’s analysts praised management today but also hint that the company has tough targets to meet. ‘Today’s news is a material step forward for Premaitha and it has its work cut out delivering on commercialisation plans,' the broker spells out today. That's before adding that bagging the CE European seal of approval has been completed on time and to plan, a fact that 'reflects very well on management.’
Panmure has today raised its target price to 28p, from 25p.
But investors will need patience in spades. The company is barely beyond the birth stage itself and results for the seven months to end September, published 10 December, show how far the company has still to travel. Revenues are incidental at £83,500, versus £4 million of pre-tax losses. It also burned through £3 million of cash.