Qlife Holding (One-pager): Continues to show low market implied Probability of Success (PoS) for Egoo Health
Even after huge share price increases, our updated One-pager continues to show low market implied Probability of Success (PoS) for Egoo Health
Qlife Holding’s announced on Monday December 4th that they have entered a collaboration agreement with Chinese based Hipro Biotechnology who will distribute and sell Egoo Health systems developed by Qlife Holding in China. Although potentially very positive for Qlife Holding from a commercialization and financial perspective and even after share price increases of approximately 40 percent since the announcement, our updated model suggest that the market implicitly does not fully discounts the potential upside from the Hipro Biotechnology deal. Actually, the model indicates a lower implied likelihood of Qlife Holding to successfully launch Egoo Health compared to our model update in the August 2023.
One explanation could be that Qlife Holding is also considering engaging into partnership arrangements in other regions. Although partnerships can potentially be supportive of a faster and less financial burdensome commercial roll-out of Egoo Health, some investors perhaps assess that it will be less valuable to share the potential with partners rather than Qlife Holding trying to capture the opportunities themselves. This way, the market do actually appreciate the Hipro Biotechnology deal, but they attribute less value to the remaining part of Qlife Holdings potential in other regions following the increased emphasis on engaging into partnerships.
An additional explanation could be that the market assesses there is an increased likelihood that Qlife Holding will need to raise capital that could potentially dilute shareholders. This is a permanent risk factor to consider for investors in life-science and biotech companies who are in their developing and cash burning phase, but the level of this type of risk can off course increase when companies approach their guided timeline for expected funding requirements.
Disclaimer: HC Andersen Capital receives payment from Qlife Holding for a Digital IR/Corporate Visibility subscription agreement. /Claus Thestrup 08:40 AM 07-12-2023.
Qlife Holding
Qlife Holding AB is a med-tech group that strives to revolutionize the market for clinical biomarkers and virus tests. By enabling tests at home as a complement to tests in healthcare, access to important health information is facilitated, which can contribute to better treatment and potentially prevent diseases. The first capsules in the company's product, Egoo.Health Platform, were CE-marked for professional use in early 2020. The company has patent protection for key parts of its technology. The Danish-based company is listed on Nasdaq First North Stockholm.
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