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Wealth Column: Medlab Clinical Ltd (MDC) IPO

Wealth Column: Medlab Clinical Ltd (MDC) IPO
May 27, 2015 By Tim Morris

Company: Medlab Clinical Ltd
Shares on Offer: 45m
Listing Price: $0.20
Market Capitalisation: $35million
Listing Date: June 10th  

After almost two decades of planning and execution, the $3billion Human Genome Project represents the single largest undertaking in the history of biological science. Completed in 2003, the study is now paving way to revolutionary diagnostic and treatment techniques which harness new understandings of human genetics. More recently, the public knowledge pursuit has shifted toward the role of bacteria in human health.

Launched in 2008, the Human Microbiome Project was designed to understand the characteristics and impact of naturally occurring bacteria within the human body. Funded by the US National Institutes of Health with a budget of $115million, the Microbiome Project completed a major milestone in 2012 establishing a reference database for ongoing study by third parties.

The coming listing of Medlab aims to harness the new body of knowledge created by the Human Microbiome Project. The Australian biotechnology company is focused on the development of bacteria based medicines. From a licensed biologics facility in Sydney, the Company develops and manufactures proprietary over the counter (“OTC”) neutraceutical products, as well as clinical drug candidates. Intellectual Property associated with its development activities is currently subject to patent applications in Australia and the US. Six products are currently available for sale, with Medlab managing distribution through practitioners and direct consumer channels in the US and Australia. The Company also provides contract research services.

Proceeds from its Initial Public Offer are scheduled to fund marketing of its available for sale neutraceutical lines and further clinical studies. Penetration of existing salable inventory and launch of approximately 16 new nutraceuticals during the coming 12 months provide near term revenue opportunities. Supplementary progression of Medlab’s clinical pipeline from existing phase 1 status has potential to drive additional medium term value.

Uncertainties surround the company’s ongoing reliance on external capital and demand for its existing neutraceutical lines. Without a historical sales profile, Medlab requires a speculative risk appetite. However the track record of its management team is a favourable quality, having founded and developed profitable neutraceutical enterprises in the past. 

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Tim Morris Author: Tim Morris May 27, 2015

Having studied Commerce and Science at the University of New South Wales, Tim began his career in an analytical capacity with Wise-owl. Tim has conducted over 500 corporate valuations and appraisals, specialising in pre revenue assets and emerging markets. For the last five years, his Equity Capital Market insights have been featured as part of a weekly column in The Australian and regularly features on Sky News, CNBC, ABC and Bloomberg TV.

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