Has Oventus Medical Ltd increased its deal pipeline?Team Veye | 14 Feb 2020 ASX - OVN
Oventus Medical Ltd (ASX: OVN)
Oventus launches three additional US ‘lab in lab’ sites, provides pipeline update
Obstructive Sleep Apnoea (OSA) treatment innovator, Oventus Medical Ltd (ASX: OVN) on 13 February 2020 announced the launch of its ‘lab in lab’ model across a further three clinical delivery sites in the United States and to provide an update on the status of total sites contracted under the Company’s ‘lab in lab’ business model.
- Three additional sites now launched in South Carolina, Illinois and Texas, bringing the total number of launched sites to 14 out of the 36 sites contracted
- Lead time to first patient bookings and revenue has been reduced for subsequent launches
- Current average rate of site launch is one per week, with minimal capital expenditure
- Strong growth expected quarter on quarter for CY 2020
- Cash burn forecast for Q3 FY20 reduced
- Deal pipeline now valued at over A$33m, compared to A$20m at end CY 2019
(Chart source: TradingView)
Oventus quarterly business review: additional sites contracted and launched
Oventus Medical Ltd on 14 January 2020 announced its Appendix 4C and quarterly business activities review for the three month period ended 31 December 2019 (Q2 FY2020).
- Three further material contracts secured, 36 sites now contracted with 11 sites deployed and five more in the implementation phase under ‘lab in lab’ business model
- Additional agreements signed with:
- California Center for Sleep Disorders in California
- Bogan Sleep Consultants in South Carolina
- Sleep Watchers in Illinois
- First revenue booked from the lab in lab program during December quarter
- Cash receipts for December quarter increased to A$112,000 representing early revenues from sites coming online; Company expects sales to continue to increase in the March quarter as site activity increases and further sites are deployed. Cash burn for the quarter down from forecast due to CAPEX efficiencies from utilising scanning equipment across multiple sites
- Board composition strengthened to support current strategy, including the appointment of Paul Molloy as Non-Executive Director which will be of significant benefit as Oventus continues with the commercial execution of the lab in lab program; Paul replaced co-founder, CTO, and Non-Executive Director, Neil Anderson
- Oventus strongly positioned to invest in growth and scale sales with further agreements expected to be announced throughout the remainder of CY2020 (Data Source – Company Reports)
Oventus had the number of online sites doubled in the last month and revenue growth was expected to accelerate quarter on quarter through calendar 2020. Oventus expects to secure further agreements across its key markets over the coming months with the company currently in advanced negotiations with a large number of groups including some large regional and national sleep networks. With approximately 140 unique patient consultations up to the end of January, the unit sales through the lab in the lab program doubled from December to January and patients scheduled to be scanned in February are already sitting at more than double January unit sales. At the same time, Oventus deal pipeline has increased to more than $33 million from $20 million as of 31 December 2019. The company has no debt. We recommend a “Buy” on “Oventus Medical Limited” at the current price of $0.46
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