Ekf Diagnostics Share Discussion Threads

[tongosti] 21/3/2024 14:35

Listen to Chris MillsIs this the same fella who was also bullish at 80p level? Just checking. Ta

[wan] 21/3/2024 08:18

Clearly most of us would have been better off putting our money under the mattress or simply spending it on something nice!

Moving on.....As the title of the thread and its contents are now well and truly out of date, I will create a new thread.

The new thread will be tightly focused on the areas of growth, and importantly the delivery of that growth as nothing else will matter!

In the interim, EKF's shares look considerably undervalued, but the market is clearly not impressed with either the results nor presumably the immediate outlook.

The market will continue to be unforgiving of any further delays or misses, but with a backdrop of falling interest rates, and on the basis of the management delivering good rates of cash generation and growth against a lowly rated share price, the share price performance from here could more than offset the dividend loss....and it needs to, otherwise why are we even here!

[hopeful holder] 20/3/2024 20:59

We certainly have had a good kicking over the last period and punished today.I'm hoping all the rubbish is out there now and we can build back up. The cost cutting has yielded monetary benefits but probably also weakened the business from a knowledge aspect and doesn't give obvious allowance for growth.If this new facility and capacity gets utilised and quickly, (this year unlikely but let's dream) the share price reversal could be quite dramatic.On a positive, it does look as though they are back in control but they really do need to speed up and step up monetising their assets after all this investment and time has been sunk into it.No more delays please...

[redwing1] 20/3/2024 14:57

Don't know where you get your "30% below fair value" from? On an EV/EBITDA and p/e basis they look pricey to me. Little to no growth from either point-of-care or life sciences. Finally, revenues and profits from the new fermentation facility being pushed out to the right.

[earwacks] 20/3/2024 09:42

Fair point on the enzyme business. It wasn’t expected but that still leaves the current business about 30 percent below fair value for a solid growth company restructured and returning to profitability. In previous years potential stories were a big part of the share price. Right at the end of chair’s statement he talks about scalability of enzyme by 2026. Should be more on that in presentation.At the moment most stock seem to be receiving luke warm reception to pretty decent results under the most trying times in living memory

[comsack] 20/3/2024 09:30

To be fair there doesn't seem to have been much progress on the game changing enzyme business since September.

[earwacks] 20/3/2024 09:24

36p without the game changing enzyme business, typically ignored by the markets the uk is undoubtedly the worst market to invest, all largely thanks to the ridiculous Brexit saga. Will we ever recover or just wait for all the best stock to get bought out by other counties. Seems to be the only game left

[wan] 20/3/2024 08:53

Broker note -

EKF’s FY23 results are in line / slightly ahead of expectations. Growth drivers remain intact in both Point-of-Care and Life Sciences and, with a greater focus on core products, margins should continue to improve from here. This is key to supporting a re-rating and we see considerable value at current levels. With profit forecasts unchanged, we roll forwards our valuation to FY24 and increase our TP to 36p, reiterating our Buy recommendation.

[tongosti] 19/3/2024 13:56

Wan my good man - will you ever learn?!

[wan] 13/3/2024 09:57

The recent pullback in the shares appears to sit somewhat awkwardly with what we know to date (Inline FY 2023), and the long term growth prospects. But sometimes the need to sell is not optimally aligned, potentially providing others with opportunity.

Next weeks Results and Presentation will no doubt provide at least some answers and indications etc.

[wan] 06/3/2024 07:45

Given EKF is a contract manufacturer to pharma in the area of bacterial fermentation and downstream processes to isolate and deliver the highest quality enzymes and biomolecules that are specially engineered to customers' specifications.

And that they have significantly expanded their fermentation facility, which is designed to produce micro-organisms including recombinant organisms for the manufacture of post-fermentation products such as enzymes, proteins and related biomaterials.

My interest was recently piqued by an article indicating the increasing level of outsourcing of manufacturing by pharma and other adjacent players, with pharma groups increasingly selling off labs and manufacturing facilities, and instead leaning on outsourcers to research, develop and manufacture products, resulting in the contract manufacturing sector poised to grow faster than the pharma sector at large over the next four years.

Consequently, “Private equity continues to have a love affair with pharma-adjacent suppliers,” said Robert Darwin, a partner at law firm Sidley Austin and specialist in life sciences transactions -
Full story FT.Com -

[wan] 06/3/2024 07:39

14 hours ago -

EKF Diagnostics
With our cutting-edge fermentation facilities and downstream processing, EKF enables the production of premium diagnostic enzymes and custom products for biotechnology, diagnostics, pharmaceuticals, and industrial sectors.

[wan] 04/3/2024 16:25

For those interested, there has been a recent and more than a subtle change in the description of EKF's business.

Previously the business was always described on their home page as "A global medical diagnostics company".
Followed by:
"EKF Diagnostics Holdings plc is a global medical diagnostics business with specialisms in point-of-care testing, central laboratory tests, enzyme manufacturing and the provision of contract manufacturing services to the healthcare industry."

That statement has now changed to "A global diagnostics and biotechnology company".
Now followed by:
"EKF is a leading global diagnostics and biotechnology company specializing in the development, production, and distribution of innovative medical technologies and patient-centric solutions."

"EKF delivers diagnostic technologies and biotechnology solutions that empower healthcare and medical providers to make informed clinical decisions through point-of-care testing and life sciences applications."

[wan] 17/2/2024 08:35

Indeed, predicting the inevitable only takes a couple of lines if its simply based on the likely effect on the share price from the expected environment of falling interest rates!

So, I make no apologies for a longer post that looks 'beyond' the obvious and where more paragraphs are justified to highlight the significant growth opportunity from just 'one' of the arrows in EKF's quiver.

[hopeful holder] 16/2/2024 13:45

My post here is short and simple, IF,.. and I think more of a WHEN, rather than an IF, but if / when the fermenting comes on line and is in constant production, then I see this companies value increase and the share price too.I am expecting to see north of 40 pence this year at some point but it also needs to regain lost credibility for which I think it is just starting to put the final pieces together.Good luck all.HH

[wan] 16/2/2024 09:35

Following on from my post 3214 regarding Beta-Hydroxybutyrate (B-HB) use in the diagnosis of Diabetic Ketoacidosis (DKA)and the a possible association with GLP-1 receptor agonist therapies such as Wygovy. There are apparently some risk of DKA from the weight loss drugs, but directly triggering DKA is relatively rare. However, I note that UK's NICE guides to not prescribe GLP-1 receptor agonist to people with Ketoacidosis (DKA), which implies that a test is required to confirm otherwise. Therefore given GLP-1 receptor agonist runaway demand (increasing prescription and non-prescription use), then B-HB testing is likely to accordingly increase too.

The other factor I looked at was the widely prescribed diabetic drugs SGLT-2 inhibitors, a medication used to treat type 2 diabetes by lowering high blood glucose levels (Market size is estimated at north of USD 11.42 billion in 2024, and is expected to reach USD 17.32 billion by 2029 Source: hxxps://www.mordorintelligence.com/industry-reports/sglt-2-market)

And whilst DKA is traditionally associated with Type 1 diabetes, it is increasingly recognised in Type 2 diabetes, particularly with the use of sodium-glucose cotransporter-2 (SGLT-2) inhibitors, thereby requiring diagnosis and monitoring -

Cureus part of Springer Nature Group
Kripa Tiwari • Nava R. Sharma • Madalasa Pokhrel • Arjun Basnet • Michael Kaplan
Published: November 25, 2023
DOI: 10.7759/cureus.49402

Diabetic ketoacidosis (DKA) is a severe metabolic emergency characterized by hyperglycemia, ketosis, and metabolic acidosis, which has traditionally been associated with individuals diagnosed with Type 1 diabetes [1]. However, there is a growing recognition of its occurrence in individuals with Type 2 diabetes, primarily because of the increased use of sodium-glucose cotransporter-2 (SGLT-2) inhibitors [1]. These medications, mainly prescribed for the management of Type 2 diabetes, have led to a notable increase in the incidence of DKA, with a particular focus on euglycemic DKA, a distinct presentation marked by blood glucose levels within the normal range. Empagliflozin, a well-known SGLT-2 inhibitor, has demonstrated significant advantages in glycemic control and cardiovascular outcomes for individuals with Type 2 diabetes [2].

However, there is a growing concern regarding the potential of SGLT-2 inhibitors to induce DKA, including the euglycemic variant. Despite ongoing research, the precise mechanisms responsible for this phenomenon remain incompletely understood.



In short, B-HB testing is likely to experience continued growth and become a very large market. And on the face of it, it could be on a relatively steep growth curve due to the increased use of certain drugs highlighted above. Indeed EKF recently recorded 27% year-on-year increase in B-HB sales.

The increasing incidence of DKA in both type 1 and type 2 diabetes and the resulting increase in testing requirements, including multiple individual testing (monitoring), will likely (unfortunately) continue to drive growth in EKF's B-HB sales.

And as I stated in post 3214 above 'According to EKF, B-HB remains an opportunity for significant growth once new fermentation capacity comes online, which suggests that a key strategic consideration was for some of the new fermentation capacity to be allocated to the increased production of B-HB'.

Therefore, and strictly in my view, there is an increasing likelihood for announcements of further strategic partnerships, and distribution agreements.

But of course readers should make up their own minds and conduct their own research etc.

[wan] 14/2/2024 16:22

The following has been on my mind for some time -

Local, State, and Federal Financing Models that Can Incentivize Manufacturing

All levels of government can craft financial incentives to enable the growth of a national bioeconomy with an emphasis on regional economic development.

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Staying with 'fermentation and the Bioeconomy'
There is very good reason to be positive about EKF fermentation expansion in the US, spanning fermentation, downstream processing, and formulation -

While the scientific, engineering, and technology communities are ready to tackle the foundational science and technology challenges discussed above over the next five years with appropriate support, establishing a nationwide, end-to-end bioproduction capacity to move from the benchtop to commercial production requires a larger-scale effort—and commitment on the part of the U.S. government—that will play out over the next 3 to 15 years.

Development, Testbeds, and Deployment
To incentivize industry and academia to pursue innovation that offers improvements
in bioproduction technology at a scale needed to achieve a commercially viable alternative to a petroleum-based economy, funding should be directed to addressing grand challenges in bioproduction, with relevant metrics of success—that the nation’s research community could address within a 5-year timeframe, much as the semiconductor and nanotechnology industries addressed their grand challenges with federally funded initiatives. In addition to fermentation, improvements in product purification are needed. This is a place where process engineers could play a vital role by applying the skills they developed for chemical production to a new industry with tremendous growth prospects and societal benefits.

Full document (a long read) - The U.S. Bioeconomy: Charting a Course for a Resilient and Competitive Future (2022). -



Another long read -

REPORT TO THE PRESIDENT
Biomanufacturing to Advance the
Bioeconomy
Executive Office of the President
President’s Council of Advisors on
Science and Technology
December 2022

[wan] 31/1/2024 13:04

I note the reported good progress in Life Sciences fermentation expansion, purchase orders received, and the onboarding of a number of customers etc. But I get the impression that the recent Trading Update was a bit short on the detail that most were hoping for (Rome wasn't built is a day), but I note that further insight on 2024 will be provided at the time of the FY Results in late March (not that long to wait!).

It might therefore be useful to read the recent Trading Update (TU) in the context of the following announcement back in October 2023 regarding the opening of EKF's new US Life Sciences Manufacturing Facility:

EKF Life Sciences is a specialist global manufacturer of high-quality enzymes and custom products for use in diagnostic, pharmaceutical and industrial applications. The Company is at the forefront of supporting life sciences global demand in precision fermentation, enzyme applications and research, providing innovative biotechnology solutions to deliver breakthrough discoveries and advancements in healthcare and medicine.

The Company's state-of-the-art facilities and leading technical expertise in specialist enzyme production uses precision microbial fermentation and cutting-edge downstream processes, to isolate and deliver the highest quality enzymes and biomolecules that have been specially engineered to customer specifications.

The new 24,000 square foot state-of-the-art facility addresses a significant gap in the US market for mid-volume manufacturing and will enable EKF to meet the increasing demands of its growing customer base. As part of its investment programme, EKF has installed 10L, 65L, 300L, 1,500L, 3,000L and 14,500L units as well as key upstream and downstream process capabilities at its South Bend plant. The cutting-edge, intelligent design of the Group's modular platform includes bioreactors ranging from 5L to 14,500L to enable it to deliver an end-to-end service from bench/proof-of-concept through to full scale commercial production. This efficient and scalable platform allows multiple batch cycles to run in parallel, enabling greater process control and precision to deliver effectively the desired yields.

The South Bend site is currently operating with full fermentation capabilities and is also expected to have all downstream processing capabilities fully operational by December 2023. As previously announced, the Company has already received the first purchase order for precision fermentation services for the new facility and has a strong contract pipeline, with onboarding underway for a number of existing OEM customers and the potential to develop into long-term strategic partnerships. During 2024, the Company expects to see a steady build-up of revenues generated from this new capacity and, as contracts scale-up, EKF Life Sciences is expected to deliver substantial, long-term sustainable growth.

The South Bend site is located in close proximity to the Company's existing 20,000 square foot facility in Elkhart. Both sites operate to the highest regulatory standards under cGMP (current Good Manufacturing Principles), ISO 9001 and ISO 13485 Quality Program.
Full RNS -

The fact that EKF's global websites only show the contract fermentation capacity offered by the existing Elkhart facility(maximum capacity 1600 litre vessel), one assumes that that could imply that the "increasing demands of its growing customer base" and "strong contract pipeline"(both referred to above) will be utilising the new increased capacity to such an extent that highlighting the new capacity on their websites is currently not a priority.

Conversely, it could mean that the new capacity is not fully operational, but that's not what the TU or opening announcement stated, and the use of plurals with regard to both purchase orders and onboarding of customers in the TU, with the broker (Singer Capital Markets) stating that "new customers onboarding into the Life Sciences fermentation plant, after the site opened in Q4." implying that good progress is indeed continuing to be made.

I therefore remain more than hopeful that further investor patience will be duly rewarded.

[wan] 29/1/2024 12:03

As frustrating as the lack of numbers and revenues for fermentation is at this stage, it's early days but it's clear that things are advancing.

In the fullness of more time, and given the backdrop of very healthy demand for precision fermentation, I would not be surprised to see announcements of collaborations, and/or strategic partnerships.

[james188] 29/1/2024 11:12

Still a complete absence of customer numbers and revenues for the fermenter business. Very frustrating.

[wan] 29/1/2024 10:31

Broker Note Singer Capital Markets -

EKF’s in line FY23 update should reassure the business is back on track, with continued growth from the established Point-of-Care and B-hB businesses, and new customers onboarding into the Life Sciences fermentation plant, after the site opened in Q4. We make no change to our estimates at this stage and continue to see further upside to the shares as the core business continues to grow and capacity in the new facility is filled. We look forward to further updates in due course and reiterate our Buy recommendation.