Purely focusing on product sales is rather one dimensional, and don't feel it considers the broader turnaround story and strategic pivot of the business.
Market sentiment and SP aside, a few thoughts: - Product sales declined YoY from USD $2.2m to $300k, but $1.7m of this came from CoviDx. Naturally, we'd moved away from this given the world has too. - Product sales also account for less than 3% of our total top line - our growing and highest margin driver is currently in providing R&D and commercial manufacturing services. So yes, while revenue dropped $1.1m ($11.6m to $10.5m), gross margin went up by $800k. - While shifting where we want to play, we leaned out and stripped $35.5m in expenses with FY22 taking the brunt of impairments in the turnaround. - We have FDA approval for FebriDx (huge), which should of course bolster product sales, but personally, I'm hoping this will be a launchpad to continue investing into our POC suite of products. - Most importantly, we have world class IP in both the scientific understanding AND manufacturing processes to shift diagnostics away from the lab to point of care.
Let's take Hologic, a largely laboratory driven business with USD $18bn market cap and $4bn revenue. Doug joins us as CEO, having stepped away from Hologic as VP Strategy and BD. We develop their POC kits across women's health products, and they also buy our manufacturing equipment to lease back to us. Doing us a solid, or do they know that this is the next step in diagnostics? They have, for example, FDA approval for a diagnostic test that detects and differentiates across SARS-CoV-2/Flu A/B/RSV, takes 3 hours for initial results, and requires kits to be sent back to the lab or through a very expensive Panther Fusion machine. What if that took 15 mins, and in the form of a RAT test? How about our ViraDx? Granted no RSV, but the point remains the same. If we continue developing accurate POC diagnostic solutions for the right use cases, we significantly change the cost profile across diagnostics for the benefit of health care providers and patients alike. Reduced temperature controlled transport costs, removal of lab bottlenecks and concentrated risks, faster detection and turnaround times, etc,
If FebriDx FDA approval was the only angle and good thing going for this ticker, I'd have sold off the moment I sensed a stall in the SP. My gut tells me there's more to this story, even beyond the short to medium term SP rise from upcoming announcements.
AIMHO of course. DYOR.
GLTAH.
LDX Price at posting:
9.5¢ Sentiment: Buy Disclosure: Held
