Angle – A Liquid Biopsy Stock on Sale After Brexit
Everyone’s probably had a chance to digest the recent black swan event which saw Britain leave the EU and while that may have rocked world markets, it also makes UK assets more affordable due to the falling pound. We’ve talked before about liquid biopsy cancer tests which are essentially just ways to detect cancer in blood or urine. Since that article, our Nanalyze Liquid Biopsy Stocks motif is down -19%. If you’ve never used Motif Investing, you should start to. It allows you to buy baskets of stocks for just $9.95 a trade and you can sign up with no deposit needed. Our Nanalyze Liquid Biopsy Stocks motif is a basket of six stocks that give you exposure to liquid biopsy technology. Just recently we came across another liquid biopsy stock which is traded in British pounds so it’s now on sale for U.S. investors who make up the majority of our audience.
With a market cap of just over $60 million USD, ANGLE plc (LON:AGL) is a publicly-traded company on the London Stock exchange which is a pure-play on liquid biopsies or more simply stated, blood tests that can detect cancer. In order to analyze cancer cells, doctors have traditionally cut out a portion of the tumor which is known as a biopsy. Instead of having to resort to invasive surgery, doctors can now use Angle’s lead product, the Parsortix cell separation system, which captures Circulating Tumor Cells (CTCs) from a cancer patient’s blood and is applicable for all solid forms of cancer.
Typically there is about 1 CTC per billion cells so the Parsortix uses microfluidics technology to sort the cancer cells out of a blood sample. While other competitors offer only a laboratory-service approach which requires shipping samples back and forth, Parsortix is a product based solution meaning you buy it and use it in your hospital or clinic in real-time. The below table from Angle shows how their solution stacks up against the competition:
Angle recently announced their first sale of Parsortix for research use and anticipates a total addressable market (TAM) for research use only at around $325 million USD. For commercial use, the TAM for their product is estimated at over $10 billion per annum globally. What’s interesting about Angle is that their margins are very high and they can capture consumable revenues with the solution in the form of “cassettes”:
With the recent Brexit event, the price of Parsortix is dropping. To put this into perspective, if a U.S. hospital bought this machine 1 year ago it would have cost $63,200 USD. If they bought the same machine today, they would pay just $54,736 USD. That’s about a 14% discount and if the Brexit carnage continues, that discount could get even larger.
We wouldn’t expect to see significant revenues from “research use only” sales at first since Angle would almost just give the system away in order to increase adoption and visibility from research institutions. The Company has secured CE Mark regulatory approval for the clinical market in Europe (European equivalent of FDA approval) and is now having an active dialog with the FDA in hopes of becoming the first FDA approved system for harvesting cancer cells from blood. The FDA approval process can take a long time, and we didn’t see any guidance from Angle on when they can expect this to take place. We did see that they have three leading US cancer centers working to complete clinical validation so they seem to be making some tangible process. For U.S. based investors, we’ve shown you before how you can trade foreign stocks like ANGLE plc LON:AGL.
Here at Nanalyze, we hold the lion's share of our investing dollars in a portfolio of 30 dividend growth stocks. Become a Nanalyze Premium subscriber to access our report on Quantigence - A Dividend Growth Investing Strategy. We'll show you how we selected our 30 stocks and teach you how to build your own dividend growth stock portfolio.