DIAGNOS' current business was incepted in the wake of the downturn in the mining sector a few years back, DIAGNOS was focused on data analysis in that sector and made the decision to springboard off its platform and expertise in artificial intelligence to build the application it has now in order to fill the gap between doctors and specialists.
DIAGNOS Inc. (TSX-V: ADK) (US Listing: DGNOF) is a Canadian-based healthcare software technology company, its 'Computer Assisted Retinal Analysis' (CARA) business applies artificial intelligence in the diabetes market which non-invasively identify patients at risk of vision loss.
Valuation Commentary: DIAGNOS Inc. is expanding globally as a first-mover in this sector with proprietary disruptive technology whose adoption is quickly gaining momentum, doctors and specialists strongly endorse it as large numbers are non-invasively screened that would otherwise not be seen. ADK.V's revenue growth curve is rapidly accelerating with topline >100% Y/Y. Swiss pharmaceutical giant Novartis has become the Company's biggest customer, initially engaging ADK.V for a series of pilot 'wellness' programs over the last couple years in various countries, paying DIAGNOS to screen patients. Recently Novartis has begun converting pilot programs into contracts, with more on the way due to the overwhelming success in identifying patients that could benefit from Novartis' treatment. German pharmaceutical company Bayer has only recently engaged ADK.V with similar intentions. DIAGNOS recently signed a contract with an unnamed pharmaceutical company targeting the US, the world's largest healthcare market. ADK.V has also started to sell its solutions to governments on a cost-reduction approach, recently signing its first government contract in Mexico. Supported by a strong growth and recurring revenue model, and a low cost growth associated with its artificial intelligence software, we expect shares of ADK.V to rise several multiples higher than its current price near-term.
DIAGNOS' current market cap of ~$10.5 million Canadian (trading at ~$0.08/share) is minuscule compared to where it appears headed based on contracts in hand, momentum, and potential. As the reality of the accomplishments and potential are understood by the marketplace we anticipate the share price of ADK.V will move nearer to 50 cents to better reflect its current inherent value. Further below we document compelling projected transaction and revenue numbers; shareholders will appreciate that the Company's fiscal Q3 (ending December-2016) is expected to show profitability (in Q3 ADK.V will have booked revenues of ~$1.15M and expenses of ~900K) and the Company is expected to experience increasingly robust financials going forward. Patient tests per month were ~22,000 this October, are expected to be ~26,000 for November, and are expected to increase to between 60,000 - 70,000 patients per month in 2017. As impressive as those increases in patient tests are, it is only just the beginning. How big will this get? The answer is 'we just don't know', but there are numerous indicators ADK.V is going on a massive run; experts believe there are ~500 million diabetic individuals worldwide (source: WHO) and the Company's adoption growth curve for its technology is very early stage. The Company negotiates its pilots with Pharma so that upfront costs are covered, ensuring it has a big enough commitment so that DIAGNOS rarely needs to spend money up front on incremental business. With four deployment options for its technology, all running at least 55% margin per transaction, ADK.V has impressive revenue projections based on committed contracts alone. Future projections are certain to improve as the level of new inquiries now coming into the Company and discussions regarding new business from big Pharma, governments, hospitals, and clinics world-wide now are off the chart. Often there is lag for new business from initial pilot (dipping their toe) to commitment (full plunge into larger contract), but as DIAGNOS has proved with Novartis and the Government of Mexico -- it's a win-win for everyone to be in business with DIAGNOS. Where this is headed is truly exciting, the long-term strategy for the Company is to eventually shift more toward standalone deployment of its technology (which has highest margins for the Company), with others/partners carrying the operating costs, and DIAGNOS acting as a centralized world-wide cloud-based database/processing center (a secure state-of-the-art facility in Montreal where its software enhances and analyzes retinal images of patients) handling large volumes of transactions.
Recent technology journal: http://technologymarketwatch.com/adk.htm
Company website: http://www.diagnos.ca/cards/landing
Canadian Junior Gold and Silver - research report, mine visit report, discussion, comments, information for a specific company. Hui commentary by Dsquare.
1 post • Page 1 of 1