DALLAS, TX -- July 12th, 2024 -- Belluscura PLC (AIM: BELL): Stonegate Capital Partners updates their coverage on Belluscura PLC (AIM: BELL).
COMPANY UPDATES
- Most Advanced POC Design: Following the success of the X-PLOR® portable oxygen concentrator (POC), Belluscura’s DISCOV-R™ was launched in 1H 2024 and delivers nearly 3x the oxygen by weight compared to the leading dual flow oxygen concentrator on the market; it additionally provides 60% more oxygen than the leading pulse dose concentrator. Belluscura’s POCs also have unique patented cartridges that are capable of changing the flow of oxygen concentration within the unit. Notably, DISCOV-R is expected to be covered by two CMS codes for superior reimbursement.
- Financial Results and Growth: The Company ended the year with $0.8M in revenue. Since the end of FY23 sales of X-PLOR in the US have approximately in May of 2024, with May 2024 sales of ~$450,00 for the month and ~$820,000 for the full year to date. If this pace continues, we believe this could result in a significant revenue run rate seen by year end 2024.
- Manufacturing Capacity to Scale: The Company currently has two high quality manufacturing facilities, both ISO:13485 certified, with one in the US and one in China. The group transferred US manufacturing in-house in April of 2022 to increase production output and reduce manufacturing costs, and management also signed an MSA in March 2022 with InnoMax to manufacture its POCs in China, expanding access in international markets.
- Nomad App: Recently, the Company signed a cooperation agreement with a leading respiratory software company to incorporate its Nomad Biometric™ Application into their tele-respiratory services. The app was first launched with X-PLOR, making it the first POC with a mobile app to connect with other devices, and it will also be included with DISCOV-R.
- Pipeline and Sales Channel/Market: The addressable markets for POCs are sizable; over 300 million people worldwide suffer from COPD, and it’s predicted to be the #3 leading cause of death globally by 2030. Management notes that the newest DISCOV-R unit had received over 6,500 preliminary orders prior to the June 2024 initial product launch. This, combined with the manufacturing of DISCOV-R in China allows for greater margins which gives us confidence that the 2H24 full commercial launch will be highly successful.
- Funding Update: Recently the Company has raised capital both through the issue of 7% unsecured convertible loan notes (£1.9M net) and through an equity issue (£0.2M net) for a total of ~£2.1M. Proceeds will go towards finalizing the launch of DISOV-R and expanding sales channels for X-PLOR.
- TMT Acquisition: In March of 2024 BELL and TMT Acquisition completed an agreement on a share for share offer. This transaction raised $5.7M for BELL. The work done by the Company over the first half of 2024 has significantly improved the liquidity position of BELL.
- Valuation: We are using a comparison analysis to help frame valuation. Given the current stage of the product life cycle we are looking forward to 2025 for our valuation metrics. When comparing Belluscura to its peers we look at it through a EV/Sales, EV/EBITDA, and a BV/Share lens. By averaging these valuations, we arrive at a valuation range of $0.49 to $0.80, with a midpoint of $0.78.
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