Costing the US an estimated $21–34bn every year, the fight against so-called superbugs could spiral into a global pandemic, potentially causing up to 10 million deaths a year by 2050.
Enter OpGen, a manufacturer of lab diagnostics focused on identifying bacterial infections. With the technology to detect pathogens and predict resistance, its dual offering of the AMR Gene Panel and Unyvero can provide diagnostic results in hours instead of days. Given there are already more than two million cases of drug-resistant bacterial infections in the US every year, OpGen has confidence in the market size for its products and is currently focused on growing its revenue.
After a busy period of news for the business, including a recent $3.5m (gross) raise which is believed to have extended its cash runway into Q323, this is a quick recap of the company’s activities, as well as the views of Edison’s analyst team covering the stock.
3 April 2023
Forecasts reset; a busy year expected
Shortly after OpGen’s FY22 update, Edison noted that top-line performance continued to be affected by longer sales cycles. However, the year was also marked by traction across the company’s business units.
Read the research >
6 April 2023
R&D: Expansion of collaboration
With potential revenue of €830k, roughly €130k higher than previous guidance, OpGen announced the expansion of its R&D agreement with FIND, a global non-profit alliance for diagnostics.
Edison’s take? ‘We anticipate this arrangement will further investigate the robustness of the Unyvero system and its suitability for low- and middle-income countries (LMICs).’
‘In our opinion, the successful completion of this stage is a key near-term catalyst, with potential to further extend the Unyvero franchise (particularly into developing markets).’
Read the research >
20 April 2023
Submission to the FDA
OpGen announced the US filing of a de novo application, a pathway towards marketing approval for a novel diagnostic or medical device. The submission for its Unyvero urinary tract infection (UTI) panel followed encouraging data from clinical trials.
Edison expects that, if approved, OpGen will launch the UTI panel in the US in 2024, adding another revenue stream and making it the first ever FDA cleared multiplex PCR sample to answer test for UTIs in the US.
Read the research >
20 April 2023
Deal broadens US opportunity
Edison noted that OpGen has entered a non-exclusive distribution agreement with Fisher Healthcare to market and distribute its Unyvero A50 platform and range of diagnostic assays in the US.
While it is a departure from the company’s prior strategy for the region, Edison noted: ‘…we see merits in this decision, as it allows OpGen to scale market coverage while easing financial demands related to salesforce expansion…’
Read the research >
27 April 2023
$300,000 in revenue as key milestones met
OpGen’s German subsidiary Curetis met its remaining key milestones under the initial R&D collaboration agreement with FIND, triggering a $0.3m payment.
OpGen announced that initial wet-lab testing of the Unyvero A30 panel and its 33 targets, including fully integrated sample preparation, were successfully completed. Multiple Unyvero A30 instrument adaptations were implemented to optimize its usage in the challenging and particular environments of low- and middle- income countries.
Curetis’s chief technology officer Andreas Boos commented: ‘We are excited to have successfully delivered the final milestones from the first phase of our collaboration agreement and look forward to working on the next set of deliverables under the expanded scope of our R&D partnership with FIND.’
Read the research >
3 May 2023
$3.5m fund-raise to extend runway
To strengthen its cash position, OpGen closed a c $3.5m (gross) fund-raise through an equity issue.
Proceeds are likely to support the ongoing commercialization of the Acuitas AMR Gene
Panel and Unyvero suite of products, further development of the ARES database and services, working capital needs and repayment of the European Investment Bank (EIB) loan.
Edison commented: ‘Despite the challenging macroeconomic environment, the announced raise will, we estimate, increase the pro-forma gross cash position to $17.7m…extending the cash runway to Q323.’
Read the research >
17 May 2023
Optimistic start to a promising year
OpGen reported a productive quarter marked by advancements across the board. Operating losses improved to $5.1m during the quarter, down from $5.8m in Q122. This was driven by 94% y-o-y top-line growth and stronger cost controls.
According to the Edison analyst team: ‘Looking ahead, we anticipate tailwinds from the post-period signing of the Unyvero distribution partnership with Fisher Healthcare and de novo FDA submission of UTI panel in April. While Unyvero and ARES will be the key focus areas for FY23, we expect advancement of the FIND collaboration to be another important catalyst.’
‘With $11m in gross proceeds raised to date in FY23 with offsets from upcoming debt repayments, we anticipate OpGen will need to raise another $7.5m to fund operations for the second half of FY23.’
‘Our overall valuation increases to $71.5m (from $66.7m) but per-share valuation decreases to $11.7/share ($12.2/share previously) with the higher post-raise share count.’
Read the research>
There is undoubtedly more news to come from OpGen in the coming months. To stay up to date, subscribe for free to Edison’s ongoing research.
IMPORTANT DISCLOSURES
Edison offers investor relations, consulting and research publication services to paying clients. In accordance with Section 17(b) of the US Securities Act of 1933, please note the following important disclosures relating to Edison and its client relationship with OPGEN (the “Company”).
Edison is engaged by the Company on a paid basis for investor relations services and this communication relates to those services. In connection with its investor relations engagement by the Company, Edison’s standard fees are $20,000 per month. Additional compensation may have accrued since the publication of this notice.
In addition, Edison is engaged by the Company to separately provide investment research coverage of its stock. In connection with its investment research coverage, Edison’s standard fees are £60,000 pa. Additional compensation may have accrued since the publication of this notice. No compensation relating to Edison’s investment research coverage is in any way contingent upon any positive opinions or conclusions in its research reports.
Edison’s investor relations services are independent of its research services, although Edison’s investor relations activities may utilize published Edison research as a source, among others, in connection with its activities. Edison’s investor relations and investment research personnel regularly, but separately, interact with the Company. All source materials relating to any investor relations materials of Edison should be considered to be directly attributable to information provided to Edison by the Company or the third-party sources noted in the communication. While third-party information used in the publication of Edison’s communications is typically compiled from publicly available sources that are believed to be accurate, complete and reliable, Edison does not guarantee the accuracy or completeness of information contained therein, and typically does not independently verify such information.
NOTE THAT ALL INVESTMENTS ARE SUBJECT TO INHERENT RISK AND ANY INVESTMENT IN THE COMPANY IS SUBJECT TO SIGNIFICANT RISKS THAT SHOULD BE ASSESSED BY ANY INVESTOR AND THEIR ADVISORS. PLEASE CLOSELY REVIEW THE COMPANY’S AVAILABLE PUBLIC DISCLOSURES, INCLUDING RISK FACTORS FOR SPECIFIC CONSIDERATION, WHICH ARE AVAILABLE THROUGH THE COMPANY’S INVESTOR RELATIONS WEBSITE, LINKED ABOVE.
This communication may include forward-looking statements that are subject to risks and uncertainties. Factors that could cause a company’s actual results and financial condition to differ from expectations include, without limitation: political uncertainty, changes in general economic conditions that adversely affect the level of demand for the company’s products or services, changes in international and domestic financial markets and in the competitive environment, and other factors relating to the foregoing. All forward-looking statements relating to this communication are qualified in their entirety by this cautionary statement.
Edison is neither a FINRA-registered broker-dealer nor an SEC-registered investment adviser and does not provide any investment advisory or banking services. Edison’s investment research reports are bona fide publications of general and regular circulation offering impersonal investment-related advice, not tailored to a specific investment portfolio or the needs of current and/or prospective subscribers. Edison does not offer or provide personal advice and its research provided is for informational purposes only. No mention of a particular security in any Edison communication constitutes a solicitation or recommendation to buy, sell or hold that or any security, or that any particular security, portfolio of securities, transaction or investment strategy is suitable for any specific person.
Edison has a restrictive policy relating to personal dealing and conflicts of interest. Edison does not conduct any investment business and, accordingly, does not itself hold any positions in the securities mentioned in this report. However, the respective directors, officers, employees and contractors of Edison may have a position in any or related securities mentioned in this report, subject to Edison’s policies on personal dealing and conflicts of interest.
