Andreas Eriksson & Johan Widmark | 2023-06-30 08:00
A game changer in the immune analysis field
After acquiring Psyros Diagnostics in 2022, Prolight is advancing the development of a digital immune analysis device that enables detection of biomarkers at low concentrations, even counting single molecules, using just a drop of blood. While this technique paves the way for simultaneous testing of multiple biomarkers (multiplexing), Prolight is initially focussing on tests for the cardiac biomarker troponin. Other clinical areas like Neuropathology, Immune System Dysfunction and Virus Detection are all in the company’s strategic roadmap.
Significant market potential for POCT
Each year in Sweden, 250,000 patients seek medical attention for chest pains, but only 10% are diagnosed with heart attacks. Current diagnostic standards for these patients involve EKG and troponin test, resulting in long waiting times. In contrast, Prolight’s device provides the results in 10 minutes, enabling a quicker patient prioritization, effectively reducing both financial burden and patent suffering. In a wider perspective, the global market for POCT is set to grow at a CAGR of 8% to reach USD 71bn in 2030. The bio-cardiac marker, valued at USD 9.0bn in 2021, is projected to grow at a 9% CAGR to 2027. Of that, the troponin testing market is valued at USD 1.5 billion today, leaving plenty of room for Prolight to grow. Other clinical target areas neuropathology, autoimmune diseases and virus detection also represent a USD +10bn market potential.
Expect commercial launch in partner setup by 2026
Following the proof-of-performance announced in mid-June, Prolight is focused on developing the first prototype for digital immune analysis, partnering with Integrated Technologies Limited (ITL) and prepare for the IVDR certification. While this is expected to take 24-30 months, due to the shortage of Notified Bodies, we predict commercialization by 2026.
While ventures into other clinical areas are still in early stages, this valuation will only cover the potential of PoC troponin. With no actual product or comparable on the market yet, any estimates regarding revenue, costs and cash flow are uncertain. But, with an estimated average price of USD 20 per troponin test, an annual suspected heart attack incidence rate of 2.5% of the population, we can start to approximate Prolight’s potential earnings. Expecting launch in 2026, with a projected peak market penetration of 30% by 2034 (10m tests), this translates to sales of SEK 2.4bn. However, Prolight does not plan to take the project all the way to market, but instead find a commercial license partner. Following the proof-of-performance, we estimate a cumulative 75% probability for the company to complete the remaining steps, development prototype, IVDR approval and commercial partner on expected time. Along with USD 20m in combined upfront and milestones, a 12.5% royalty on sales, and SEK 100m in additional capital need up to commercialization, we find support for a fair value of SEK 1.2-1.4 per share, in 12-24 months, while other clinical areas add considerable further valuation potential on top.
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