(MENAFN- ProactiveInvestors) Broker finnCap has initiated coverage of () with a 310p price target for the diagnostics specialist.
The in vitro (“test tube”) diagnostic industry is projected by life sciences research firm Frost & Sullivan to be worth around US$64bn by 2017 and Akers has a portfolio of products some already released and some in the pipeline that address several parts of the point-of-care market.
finnCap analyst Keith Redpath says Akers’s rapid diagnostic tests surpass most other diagnostic products with their portability speed ease of use price point and accuracy.
That according to Redpath makes them ideally suited to meet the diagnostic demands of Third World countries that lack basic health infrastructure. Akers is focused on India and Asia in particular.
The broker is forecasting Akers’s revenues will grow at a compound rate of 53% between this year and 2017 sweeping the company to break-even or profitability by 2016.
Sales last year were US$3.6mln and finnCap has pencilled in figures of US$4.6mln and US$7.2mln for this year and next.
The broker’s revenue forecasts are based on currently commercialised products and the Chlamydia test which is in the late stages of development.
“Our model does not assume any revenue contribution from other tests in development for a variety of infectious diseases especially those prevalent outside of the United States. Neither have we assumed any further distribution agreements.
“Both the launch of new tests and the opening of new markets through distribution agreements represent substantial upside to our forecasts” Redpath noted.
Adjusted loss before tax is seen widening to US$2.5mln this year from a loss of US$1.7mln before narrowing again in 2015 to US$1.8mln.
The recent fund raising that saw US$15mln flow into the company’s coffers should be more than enough to see the company through to profitability finnCap reckons.
The 310p price target – the shares currently trade at around 220p – places Akers on an enterprise value/sales multiple of 2.0 based on the broker’s forecasts which is still a discount to peers in the broker’s research universe and the broader AIM Healthcare index.
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