Precision medicine tests developer Oxford BioDynamics (LON: OBD) fell 14.7% to 13.225p following its interim figures announcement. The company has significant opportunities but limited funds.
The cash outflow after R&D tax credits was £2.3m in the six-month period. There is £4.6m of cash in the bank at the end of March 2022. That was after £3.62m was raised at 46.5p a share last October.
Last week, EpiSwitch CiRT was launched in the UK, having been launched in the US in February. This is precision medicine test that can predict whether a patient will respond to immune checkpoint inhibitor therapies – they are infective treatments for 70% of patients.
Costs will be saved by not prescribing ineffective medicine and doctors can be reassured that it is correct to prescribe treatments.
Oxford BioDynamics is still talking with major pharma companies about the test so it will take time for revenues to build up. Once a reimbursement code is obtained in the US it should be easier to assess the potential.
Oxford BioDynamics has other products. The next diagnostic is likely to be for prostate cancer. EpiSwitch CiRT is the one that could be significant in the medium-term, though. The prospects are positive.
Investors may be concerned about the cash position and the likely need for a fundraising in the next year. Revenues are unlikely to build up fast enough to enable the company to take advantage of the opportunities. There were warrants with the recent placing, but they are exercisable at 58.125p.
