Ekf Diagnostics Share Discussion Threads

[p1nkfish] 08/10/2024 16:08

Some transferred at 31p at reasonable volume for EKF. One trade reported after hours yesterday.

[earwacks] 03/10/2024 12:46

Veterinary is often overlooked by some of these companies which is strange because approval is usually easier and the market is potentially the same because people will spend any amount on pets. Avg’s Adaptix mobile portable x-ray is very popular with vets in America already having only launched recently. Can also be used in
Engineering which opens up another market. I think they will sell it on as they need to gear up rapidly. Same goes for Magnetica’s scanner. They bought out both companies who unfortunately for them ran out of cash. They bought 90 percent of Adaptix for less than their original 10 per cent stake. Rough estimates suggest the two companies are worth more on their own than the current market cap for their entire engineering enterprises. Classic example of how mispriced the some of uk market is

[wan] 03/10/2024 11:07

Earwacks...Yes, there is always some patience required (often more than some PI's can endure).

What I would add to my above post is that SGLT2 inhibitors have recently seen their introduction into veterinary medicine, where there has already been adverse event reports concerning diabetic ketoacidosis (DKA), and which may also provide another avenue for BHB testing (EKF already addresses the veterinary market).

More importantly, some of the largest global diagnostic players are very interested in ketone monitoring and testing(BHB is perhaps the most important ketone on several fronts). So, I am also wondering whether EKF's test development and IP presents licensing opportunities outside EKF's established and target markets?

The new test will be very complimentary to EKF's established lab-based BHB testing. EKF will apparently have feasibility completed on their new glucose/BHB test by Christmas.

And although it will take longer to gain full authorisation (patience required), I believe that early interest/enquiries is very likely (if not already featuring).

[earwacks] 03/10/2024 09:14

Thanks Wan for that. We seem to have crawled back to the middle of our trading range. Plenty of fund managers seem to have a holding here and expectant of either having a better recognition for the current business and massive upside for enzyme business currently valued at nothing as is the case with many other businesses. Thinking particularly of Avg who have developed and started marketing a portably X-ray unit and a small mri scanner that doesn’t use helium. Both machines are valued at nothing despite significant investment and accelerating order books and interest. Very much a case of the market only valuing the colour of the money today and not what might come in tomorrow. A lot of patience required still with these stock but hopefully will be worth it eventually

[wan] 03/10/2024 08:13

I repeat an excerpt from my post 142 to make an important point:

One of the four pillars of growth, that was previously off the radar, and has significant potential, is EKF owned cell lines that are stored within South Bend in liquid nitrogen, which Julian Baines discusses in the presentation at 24mins 56secs and 47mins in.

It would appear that EKF's cell lines has the potential to be a significant growth driver from a combination of commercial sales, and from utilisation internally (enabling and augmenting point-of-care products), such as a BHB/Glucose test-strip and reader, which EKF has IP around. This in-house ability and IP will enable the production of a superior and proprietary product that would compliment their existing BHB lab testing business, addressing an 'additional' market of $59m in the US, plus additional opportunities outside the US. And perhaps overlooked, and to my mind at least, this aspect should further improve the already strong relationships with the likes of Thermo Fisher, Cardinal Health, and Quidelortho in the 'existing' BHB business and indeed beyond.
(END of excerpt)

The following recent publication regarding BHB and SGLT 1/2 inhibitors is thus important as it is very likely to result in a significant increase in the use and frequency of BHB testing, 'regardless of SGLT inhibitor use' -

Diabetes Technology & Therapeutics
Published Online: 4 September 2024
Beta-Hydroxybutyrate Levels and Risk of Diabetic Ketoacidosis in Adults with Type 1 Diabetes Treated with Sotagliflozin

Introduction: Sodium glucose cotransporter inhibitors may increase beta-hydroxybutyrate (BHB) in insulin-requiring patients. We determined factors associated with BHB changes from baseline (ΔBHB) and diabetic ketoacidosis (DKA) in patients with type 1 diabetes (T1D) receiving sotagliflozin as an insulin adjunct.

Conclusions
Sotagliflozin as an adjunct to insulin led to small but statistically significant increases in BHB over 24 weeks. In fact, in approximately two-thirds of patients, sotagliflozin did not lead to any appreciable increase in BHB. Baseline BHB, changes in BHB, and sotagliflozin use were the main predictors associated with clinically meaningful BHB elevations or DKA events. Common predictors of DKA risk, including age, gender, insulin pump use, and A1C, were also observed in the analyses. These results highlight the importance of patient selection based on BHB testing before starting SGLT inhibitors and education regarding risk, mitigation, identification, and treatment strategies for ketosis and DKA. Our findings further suggest that BHB should be monitored in all patients with T1D, regardless of SGLT inhibitor use, although additional research is needed to determine the optimal frequency of BHB monitoring.

[james188] 01/10/2024 15:01

I see from the recent Relalytix placing announcement that Julian Baines has agreed to become executive chairman of the company. I appreciate that he has been heavily involved with it before, but I would have thought that he had more than enough on his plate with EKF.

The Renalytix RNS also refers to JB having taken on the EKF exec chairman role in 2023 on a short-term basis. That is either very sloppy reporting or concerning (i.e. if he is going to exit EKF).

[wan] 22/9/2024 15:13

Earwacks...Thanks for heads-up re Paul Scott.

EKF Diagnostics..."could be worth having a look"

Episode 38: 39m 57sces in - search Google for - Episode 38 (21/9/2024) - UK Small/Mid Caps with Paul Scott

[earwacks] 22/9/2024 13:09

Sparked a little interest from none other than Mr Scott in his podcast from Malta this weekend, after a little nervous laugh about diagnostic companies. As with any new technologies and in particular life sciences we are in new frontier territory which comes with all associated risks. However the rewards to investors and their users the doctors and patients could be immense. Companies like EKF and Niox (asthma diagnostics)have been through the mill. The aim being to pinpoint treatment areas and help repair with more efficacy with less intrusion and less toxicity side effects. Lung, brain, heart, kidney and eye operations all benefit from better diagnostics.

[wan] 22/9/2024 09:17

One of the four pillars of growth, that was previously off the radar, and has significant potential, is EKF owned cell lines that are stored within South Bend in liquid nitrogen, which Julian Baines discusses in the presentation at 24mins 56secs and 47mins in.

It would appear that EKF's cell lines has the potential to be a significant growth driver from a combination of commercial sales, and from utilisation internally (enabling and augmenting point-of-care products), such as a BHB/Glucose test-strip and reader, which EKF has IP around. This in-house ability and IP will enable the production of a superior and proprietary product that would compliment their existing BHB lab testing business, addressing an 'additional' market of $59m in the US, plus additional opportunities outside the US. And perhaps overlooked, and to my mind at least, this aspect should further improve the already strong relationships with the likes of Thermo Fisher, Cardinal Health, and Quidelortho in the 'existing' BHB business and indeed beyond.

Investor patience has, without doubt, been severely tested (mine included!), and there is more work to do in terms of delivering on the growth opportunities outlined, but it is always darkest before dawn and I am hopeful (with depleted patience) of more sunnier uplands ahead.

[wan] 21/9/2024 09:19

Looking forward, and coming back to Presentation points worthy of particular mention:

EKF's connectivity platform. EKF Link is EKF's in-house developed data and device management system, which is test agnostic and can be used on any platform beyond EKF's analysers. Its adaptability and ease of use make it a valuable connectivity addition to any healthcare setting, including hospitals, laboratories, blood banks, pharmacies, and general practitioners -

What also caught my attention (at 36 mins in) is the fact that EKF Link is proving to be so popular that it is also driving enquiries beyond EKF's own point-of-care portfolio, with EKF receiving approaches from companies with 'approved' testing technologies where they haven't got the effective distribution channels that EKF has. The enquiries are not just about utilising EKF Link to provide important connectivity options, with EKF being asked if they would be interested in licensing the other companies products to sell through EKF's firmly established and 'differentiated' distribution channels, in turn providing further opportunities for growth.

Subsequently, due to the success and as part of the pivot to a 'multiple' growth opportunities, EKF is looking to expand the connectivity opportunity by putting a commercial team behind EKF Link, driving growth and opening more doors to new opportunities.

[wan] 21/9/2024 08:07

EKF Diagnostics – The Shares Of This Profitable Global Business Are Now 28p, Brokers Predict 39p

By
Mark Watson-Mitchell
20/09/2024

On Thursday 18th July, I asked whether the shares of EKF Diagnostics (LON:EKF) were a Buy at the then 31p.

Since then, they have been up to 32.90p and down to 26.30p – after this week’s Half-Year Report, I answer my own question.

Now at 28p, I consider that the shares of this £125m capitalised global diagnostics business are primed for a recovery rise.

It may be some time for them to get back up to the 94p that they reached this time three years ago, even so I can see them putting on a neat-25% gain within the next six months or thereabouts.

Full story -

[wan] 21/9/2024 08:06

I don't think there is much doubt that EKF has done the "hard yards" and is now entering a new phase (yes, with some important lessons learned).

There are early signs that the second-half will deliver further progress in terms of cash generation and earning growth. The market appears to be responding to this and the fact EKF has delivered significant change in terms of a leaner and more agile business, with a more focussed higher-margin product mix.

Recently, I stated that investors need to appreciate the role that EKF's Life Sciences can play, not only in the production of premium OEM products and materials for third-party clinical diagnostic companies (not to mention pharmaceutical and industrial applications), but also in the production of diagnostic products that enable EKF's current diagnostic products, and perhaps under-appreciated, the potential from EKF's future diagnostic tests and devices.

This aspect was covered in the Presentation (at around 14mins.53secs in), with EKF investing in utilising enzymes in new product development to deliver new point of care products into EKF's point of care portfolio, which is new and not something they have done before, with a current ongoing product and project to deliver a new state-of-the-art BHB point of care product (current BHB product is for lab-based testing).

For those who are prepared to turn the page and look forward, there are several further points that stand out for me, and which I believe are worthy of particular mention.

[james188] 20/9/2024 19:11

I didn't bother talking about the Mount Sinai pipeline, because the post was long enough already, but I completely agree with your observations.

EKF is far too small and has other priorities and so cannot follow the initial investments in Renalytix, Verici, Trellus et al. So it will and has been diluted on a savage basis as the companies inevitably seek further funds from hard nosed investors. Ditto the fate of its shareholders.

I think that EKF has recognised this and so we do not hear anything about the Mount Sinai partnership these days. If you want to see how brutal it can turn out, look at what happened to GLI Finance (now Sancus) when it embarked on a similar delusional path.

I am relieved that EKF has aborted this programme, but shareholders generally would have done much better served with cash dividends.

[bscuit] 20/9/2024 18:29

In Specie distributions of subsidiaries would have been better sold for cash with dividends in order to attract other institutions rather than leaving small holders with uneconomic disposal costs.

I have had enough.

Now offloading all.

[james188] 20/9/2024 18:01

EKF's reporting history over the last few years has been anything but "realistically refreshing", in my view.

If we go back only two years to the 2022 September interims, shareholders were given a very upbeat assessment. On fermenters, the company said that it had established "a dedicated team of highly skilled fermentation specialists who are uniquely positioned to deliver customer requirements and expand these long-term strategic partnerships". The Outlook statement said that the strong first half delivery had been pleasing. The presentation at the time was also upbeat.

On the back of this, the house broker pumped out a note forecasting revenues of £72m for 2023E and £78.6m for 2024E. The updated broker note yesterday confirmed 2023A at £52.6m and forecast £53m for 2024E. The 2025E is not much better at £56.6m.

On any analysis, shareholders were not properly informed - and some. Being charitable, this was down to incompetence and inexperience. Other conclusions could be drawn. Presumably this was one of the reasons for the Board changes.

Moving on to 2023, the company issued a TU on 6th February 2023 that reported delays in the fermenter programme, but stated that the Board "remained confident in the commercial potential and payback of this growth opportunity". It also said that the performance of ADL was much improved and that the business would be monitored on its path to profitable growth. Why on earth did it say that? A few weeks later, shareholders were informed out of the blue that ADL had been disposed of (at a huge loss) on the basis that it was non-core.

Fast forward to the September 2023 interims (noting that the company failed to notify the market that Mike Slater had left until well after that fact was public knowledge and that guidance for fermenter revenues was withdrawn on 12th September 2023)and we had another upbeat report and associated IMC presentation/Q&A responses . I and at least one other shareholder raised a number of concerns, including as to the demand for fermenter services. I also posted my concerns about all this on the previous ADVFN thread (EKF Diagnostics for Income and Growth) on 12th September 2023 and also on a number of other occasions.

Fast forward again to the September 2024 interims on 17th September and the associated IMC presentation. We were told that the many problems of the previous two years had been largely addressed. We hadn't been told much about those problems earlier. I and a couple of other attendees on the IMC presentation raised concerns about the fermenter programme and management. We were told that the company accepted that had the wrong strategy for securing customers and that it had decided to hire an external project manager to sort this out. So much for the 2022 guff about a highly experienced in-house team.

We were further told that the fermenters were not expected to operate at full capacity until at least 2026. Julian Baines (who I still have a good deal of time for, despite the above and other issues), disagreed with my assertion that the company had taken a flyer on the fermenter programme. He said that Elkhart had to be replaced and the board decided to go for the full fermenter programme, rather than a straight replacement of the existing facilities. However, we were told that a straight replacement would have cost circa $6m capex plus opex and we know that the full programme cost was at least $16m capex plus opex, with a cash drain whilst underutilised facilities are properly maintained. That is a flyer, in my view. Was phasing even contemplated?

Why has all of this only been grasped by the company now, when the concerns were flagged ages ago? I can only assume that the focus was on cost-cutting and that Julian Baines has insufficient support and so took his eye off the South Bend ball. Further management change is needed, in my view.

For the above reasons, I believe that the company needs to do much better in keeping its shareholders properly informed. The Board and its advisers need to shape up.

[wan] 18/9/2024 17:46

From my perspective, as a long-term investor, EKF's Presentation was a combination of realistically refreshing and a generally uplifting tone compared to recent presentations.

There is, as one would expect, more work to do, but with a stronger second half currently in play (as alluded to above), EKF does appear to have turned an important corner.

Plus, there is a pivot towards higher growth opportunities, which I am sure will be music to more than my ears!

[wan] 18/9/2024 07:56

James,
"with orders already in house for the second half we are very confident that the Point of Care performance in Europe, Middle East and Africa will improve significantly."

In my book, that's not speculative on its own, and it's a strong indication of the visibility and likelihood given that we are nearly halfway through the second-half.

[james188] 18/9/2024 07:35

Wan, A very successful investor friend likes to refer to the “cold,hard marble slab of truth”, by which he means that he concentrates on the actual figures presented and not future speculative revenues. The company has not quantified even the rough value of the contracts where revenues are expected in H2 and the company’s brokers have left their forecasts unchanged. The brokers have also chosen not to update information on fermentation revenues. So, we have no idea how material these contracts are. It is this continuing lack of clarity which I find problematic.

[wan] 18/9/2024 05:06

James...EKF has indicated that some tender wins have slipped into the second half, hence revenues are relatively flat. So, the second-half appears to be set to benefit from a good start.

IC coverage -

Published on September 17, 2024
by Jennifer Johnson

EKF Diagnostics returns to profitability

A rationalised product offering leaves the group well-positioned to grow the top line

Published on September 17, 2024
by Jennifer Johnson

Full story -

[james188] 17/9/2024 19:30

Unfortunately, I am not surprised that the market has not been overwhelmed by these results. The improvement in margins is clearly welcome, but revenues for the period were overall flat compared to last year, which is not great for a growth company that has made a huge investment in the South Bend facility, in particular.

So, revenues for South Bend fermenters may be up 41% compared to H1 2023, but we know that was from a very low base and so my assumption (we have no hard figures) is that the actual net revenue increase is not likely to be great. I hope I am wrong.

Failure to pay even a token dividend is also sub-optimal because it means that some institutions cannot invest in the company. That is why most growth stocks, even with heavy capex commitments, still pay a small amount. The likes of Zotefoams (ZTF) spring to mind.

We will see what they have to say in the IMC presentation tomorrow.

[earwacks] 17/9/2024 10:24

In more normal times the market might have shown a bit more enthusiasm. Good results are greeted as expected, anything less is greeted by 40 or 50 percent drops. IMO opinion this sector is due a rerate as life science companies play an increasing roll in importance of diagnosis and more efficient treatment. Reinstatement of a dividend would also help as we are seeing healthier sustainable profits. Why has there been no RNS with the persistent seller? Hard to believe it’s not a notifiable fund holder

[supernumerary] 17/9/2024 09:36

Only had a very quick glance so far this morning, but the cash generation seems the outstanding feature to me. Good to see.

[wan] 17/9/2024 07:52

Broker comment via Research-Tree:

Interims confirm return to profit growth

Interims results show a strong improvement in margins and cash generation as a result of self-help measures and strong execution from management taking effect. The outlook remains positive, with H2 looking well underpinned by orders already received in the Point-of-Care division and further growth from the newly commissioned Life Sciences manufacturing plant in South Bend. We make no changes to our forecasts at this stage and flag the mid-teens EBITDA growth outlook and attractive earnings multiples as being supportive of the investment case at currently share price levels. We reiterate our Buy recommendation and TP of 39p.

[wan] 17/9/2024 07:51

A positive first-half performance overall, with a stronger second-half to follow, and where a few more contract wins could make a material difference.

[wan] 14/9/2024 09:26

Most will no doubt have either read or at least be aware of the news flow regarding Lord Darzi’s recent diagnoses of the challenges facing the NHS.


In my view, that diagnosis applies beyond the UK in shifting more care from hospitals to communities, and to be much bolder in moving from sickness to prevention, which would include robust diagnostics in-the-field and at home, point-of-care diagnostics in pharmacists, and doctors offices.

I know some are too busy, or maybe just not that interested to listen to a 20 minute talk. But if you do nothing else, listen to the last minute (from 19m 38sec) -
Apr 12, 2024
Lord Darzi calls for a coordinated, decentralized approach to point of care diagnostics that considers scaled access and equity across whole populations -


The recognition of what role diagnostics play may be entering a new era of appreciation and deployment, in turn creating even greater opportunity.

With that in mind, investors need to appreciate the role that EKF's Life Sciences can play, not only in the production of premium OEM products and materials for third-party clinical diagnostic companies (not to mention pharmaceutical and industrial applications), but also in the production of diagnostic products that enable EKF's current diagnostic products, and perhaps under-appreciated, the potential from EKF's future diagnostic tests and devices.

That aside, it will be interesting to see what insights we get on Tuesday in terms of the progress and performance to date from the half-year results, and the presentation the day after.