Nightingale enters into agreement to analyze samples from one of the largest US biobanks
Translation: Original comment published in Finnish on 4/12/2024 at 9:04 am EEST.
The agreement is with Kaiser Foundation Health Plan Inc., which, together with Kaiser Foundation Hospitals and its subsidiaries and the Permanente Medical Groups, form one of the largest integrated healthcare consortiums in the United States. Under the contract, Nightingale will analyze 50,000 blood samples for the Kaiser Premanente Research Bank, which is one of the largest biobanks in the US, according to the press release. We view the agreement as an attractive option for a larger clinical collaboration in the future, although the announcement does not immediately create pressure to revise our forecasts that anticipate strong growth.
A major research client with room for further clinical expansion
In terms of revenue, the contract is significant for Nightingale's current size (estimated at just under 1.2 MEUR: EUR 24/sample at list price level, Nightingale's revenue in FY2023 ~4.2 MEUR). Nightingale's revenues to date have mainly been generated from research collaborations, so the sample analysis starting at the end of H1 should provide the company with good underlying research revenues in 7-12/2024.
We see an interesting strategic angle in the agreement, as Kaiser Permanente is part of a large US healthcare system, and the use of Nightingale's technology on the research side will, in our view, improve the prospects of bringing the technology to the clinical side in the future. We believe Nightingale has a similarly interesting situation in the Mass General Brigham collaboration. However, we stress that there is still a long way to go from research to the clinical side.
The news is clearly positive for the company but does not put pressure on our forecasts that anticipate strong growth (revenue 7/2023-6/2024: 4.7 MEUR, 7/2024-6/2025: 8.7 MEUR). For the calendar year 2024, our growth projections are driven by the Terveystalo collaboration launched earlier this year, while the Innoquest Diagnostics/Pathology Asia collaboration will also support growth in the coming years. However, the collaboration announced today, if expanded, could be one of the potential components of the revenue growth we are forecasting in the medium and long term. On the other hand, the fact that Nightingale continues to add well-known healthcare logos as reference customers is also very positive for winning future contracts.
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Nightingale Health
Nightingale Health operates in medical technology. The company specializes in the development of medical devices. The product portfolio is broad and includes platforms and services in blood tests that are used for disease prevention purposes. In addition to the main business, service and associated ancillary services are also offered. The business is run globally with the largest presence in Europe.
Read more on company pageKey Estimate Figures08.03.
2023 | 24e | 25e | |
---|---|---|---|
Revenue | 4.2 | 4.7 | 8.7 |
growth-% | 80.80 % | 12.78 % | 85.00 % |
EBIT (adj.) | -18.5 | -17.8 | -17.6 |
EBIT-% (adj.) | -442.95 % | -377.50 % | -201.86 % |
EPS (adj.) | -0.30 | -0.27 | -0.27 |
Dividend | 0.00 | 0.00 | 0.00 |
Dividend % | |||
P/E (adj.) | - | - | - |
EV/EBITDA | 0.77 | - | - |