Analyst Group: Share analysis of Calmark – Market deployment around the corner

Analyst Group: Share analysis of Calmark – Market deployment around the corner

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Calmark develops a point-of-care analysis method that can provide decision-making support in the care of newborns more quickly and easily than existing methods. Calmark‘s communicated goals have been achieved earlier than expected since the 2018 listing, and the company has therefore accelerated the timetable for a global market deployment. Based on a successful market deployment in 2020, combined with growth and the profitability allowed by the business model, Calmark is projected to increase net sales to approximately MSEK 67 by 2025, with an operating margin exceeding 25 percent. Taking these predictions into account and applying relative valuation, a present value per share is calculated to be SEK 8 in the base scenario.

For complete analysis (in Swedish), please click here: http://analystgroup.se/analysis/calmark/

The market for point-of-care analysis and diagnostics is expanding rapidly

The point-of-care analysis market (POC) is a fast-growing segment in the field of medical technology; globally, it is expected to grow from Bn USD 14 in 2017 to Bn USD 24 in 2024 (corresponding to a CAGR of 6 percent). Growth is driven by demand in industrialized countries, where the healthcare is in need of time- and cost-efficient solutions, as well as developing countries, where POC analysis often is the only viable alternative.

Calmark has the opportunity to become the market leader

Currently, the alternative to Calmark‘s products is laboratory analysis. Calmark‘s diagnostic test saves up to one and a half hour per successful test in developed countries, and is the only option in many developing countries. In combination with the simplicity of use of both the reader and the disposable tests, and the competitive end-customer price, a successful launch should result in an eventually significant market share. Up to 2025, Calmark is estimated to increase net sales to approximately MSEK 67 in the base scenario. It is estimated to show profitability by 2022/2023.

Experienced management has outpaced the plan

At the time of listing in July 2018, Calmark set forth a number of milestones for product development, market launch and recruitment. The 2018 targets were reached in a timely manner, and an accelerated timetable for CE conformity marking and launch of one of the company‘s diagnostic tests, Bilirubin, was announced early in Q4 2018. The reaching of stated targets in combination with the fact that the management's and board‘s track records include several similar and successful enterprises bodes well for 2020, the year when all of the company‘s products are planned to be commercially launched.

The sector’s inflexibility may pose an issue

Earlier test results have been satisfying, and Calmark has so far always delivered according to plan. Nevertheless, the CE conformity marking and clinical studies by the end of 2019 still remain to be resolved. Another potential pitfall is the lengthy administrative processes in the countries where the Calmark product is to be launched. Furthermore, large-scale distributors have to be cultivated. Considering the fact that Calmark is not profitable today, time to market will be a deciding factor.

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This is a press release from Analyst Group regarding the publication of a share analysis of Calmark Sweden. The reader can assume that Analyst Group has received remuneration for the provision of the analysis. The contracting entity has not been given any opportunity to influence the parts of the analysis where Analyst Group expresses opinions on the Company, its future valuation or anything else that could be considered to be a subjective assessment. The company has only been given influence over the strictly factual and objective parts.