Pitt St Research Report: MEB - 5c base case to 8c Bull case, page-2

I hesistated for too long here. LUCA changes everything in my opinion.

Headspacecharges users between $75 to about $92 per annum or $13 per month. LUCA ispriced at $46 per annum or $8 per month. Offer of $23 per annum for a limitedperiod following launch. I think MEB got this one right. I don’t see how theywon’t succeed in stealing a share of the market from the likes of Headspace,Ginger etc. It remains to be seen. Headspace has over 90M users pre-merger withGinger. LUCA is touted to be the first mental health app with a biometricfeature – with a proprietary algorithm that measures sleep, cardiac andphysical activity. How many keen users would LUCA gain in a year? Just multiplythat figure by $46. Meb has a product worth winning a good market share if turnsout to be what they say it is. The pricing favours annual subscribers. 14-dayfree trial followed by paid subscription. If I liked it during the trial, makesno sense to pay $8/mth. Just pay $46/yr and have the app for yourself all year.Judging by the success of the competition, LUCA might be a company maker on itsown.

However,the game is this: In the US, quite a sizeable chunk of users of Headspace signup through their health insurer or employer. Think of it this way, you sign upwith BUPA/HCF and you find in their Extras an option to choose a mental health packagethat includes an app that measures stress/depression objectively. You downloadapp and use a coupon or pin from your insurer to gain access. Essentially, it’splug and play for LUCA in the US. The structure is already on ground. MEB onlyneeds to sign up with insurers and millions of users could be using LUCA in ayear. Of course, the app will be available for anyone to download, subscribeand use too.

MEB’stechnology is patented in many countries already including the US and China. Usingheart rate variability over a period to assess mental heart has been patented.The likes of Apple just waking up to this are years behind.

This atteststo the magnitude and importance of what MEB is pursuing in the objective assessmentof mental health. LUCA will combine Biometric and Psychometric evaluation formental health management.

I try to avoidSP projections but Pitt Street Research (who owns shares in MEB) reckons thereare 5 to 8 bags from $0.01 per share, that is MEB could be trading at between$0.05 to $0.08 per share if everything goes to plan. You reckon MEB can’t havea MC of $65M? I won’t be surprised if Ilumen rides on the back of LUCA becauseLUCA is bound to make Medibio a brand name in the mental health space (it seems).Hopefully, MEB-001 joins the party next year too.

I wouldlike to see MEB invest in some airtime and score some points at home too. Get Australiatalking about LUCA on 7news/ABC. It’d be nice to watch some 2mins sensationalnews on LUCA. Anyway, I’m ready to ride this one. Fit for the times we are in.

DYOR