UBI vs OBJ

Both of these companies have proprietary technology, undertake partnership approach with market-leading giants and experience strong growth in its products.

Here's the side by side comparison of OBJ and UBI from my perspectives
UBI OBJ
Technology: electrochemical cells magnetic, micro-array delivery

Ownership of Patent: Licensed from J&J Full ownership

Market Sector: Healthcare Point-of-Care Cosmetic/Drug-medicine delivery

Partner: Johnson & Johnson/Siemens P&G

Revenue: $10 millions for first Half 2016 $1.5 millions for full year, 2016

R&D Cost: $8 millions for first Half 2016 $1 millions

Profit: $1.5 to 2 millions (FY2017 forecast) $3.5 millions loss (FY2016)
$4 millions(FY2017 including R&D rebates)

Long term Debt: $20 millions very little

Potential Risk: J&J exit($35.2millions USD one-off lump payment) the amount of royalties from P&G


To me, the current service revenue of almost $20millions per year, provided by J&J is a deal, too good to last. This is currently the only significant income stream for UBI, very difficult to be offset by alternative income (currently at $1.3 millions with 14% gross margin in the early stage of launch of Xprecia Stride) from Siemens within the next 5 years.

Two possible scenario for UBI
1. optimistic case - J&J continue to pay service fee to enhance/enrich its relationship with UBI, making UBI really profitable.
2. alternative case - J&J exit with one-off lump payment of $35.2millions USD to UBI. UBI can use it to pay off its debt and ration its R&D spending to keep its business profitable. Focus on optimization of manufacturing of Xprecia Stride strips.

I believe Xprecia Stride can bring significant revenue for UBI.
Despite of the fact that J&J has full ownership of electrochemical cells and has the power to exit from (service fee)partnership, it is likely to give UBI some incentive to continuously collaborate for improvement/innovation of its OneTouch product range. After all, the majority of patents expired after 20 years and competitors usually come up with similar technology under different patient. I believe J&J would want to invest in its partner, UBI for future, sustainable growth with potential to commercializing point-of-care in Immunoassay.

UBI current at about $55 millions market cap with profit of 4 millions(including R&D rebates) can be a good investment.

I am interested to purchase more once the outcome from J&J partnership is confirmed.