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Why Orthocell Ltd Is Being Watched With Anticipation?

Jordan Baird

Jordan Baird is the head ASR Wealth Advisers client services desk and has been with the organisation since 2017. He first started investing in his early years. While he believes that investors should leave no stone unturned he has a particular interest in trading based on broad macroeconomic trends along with specific analysis of innovative up-and-coming companies.

Orthocell Ltd (ASX: OCC) is a rapidly growing regenerative medicine company with a niche focus in the development of novel collagen-based medical devices and cellular therapies for the purpose of repairing the tendon, bone, nerve, and cartilage defects. Orthocell has garnered significant attention as a company positioned for future growth in the lucrative health-based biotech market, following a series of positive announcements made about successful clinical trials in the past year.

Orthocell Ltd - report
(Credit: Orthocell)

Earlier in May of this year, shares rocketed to a high of $0.64 per share from its yearlong low of $0.14 per share, where it experienced some 413% increase since year-to-date. This growth rallied off announcements made by the company that Phase III trial of its CelGro technology in patients with damaged nerves have shown an improvement in regained sensation and muscle function, reporting 83% improvement in muscle power overall.

This product gained significant interest from both investors and the medical society as it allows the treatment of patients whose conditions are so severe that it normally warrants the need for complicated and difficult microsurgery. The CelGro treatment has since been approved for sale within the European Union, as well as being readied for approval in the US and Australia, adding to Orthocells growing portfolio of approved cell therapies such as Ortho-ATI.

Unlike many other biotech companies trading on the ASX, Orthocells suite of TGA-approved (Therapeutic Goods Administration) cell therapies means that it is able to actively generate revenue, consequently allowing Orthocell to be operating in a lower risk environment than its peers. Orthocell caught the attention of investors recently as it announced a trading halt on the 7th October 2019, pending normal trading on the 9th October 2019, where it will be expected to release a significant announcement.

This news has had investors optimistically anticipating more clinical updates, and that the company will be poised for further growth in the coming year with a larger catalogue of products to offer. This reflects the wider sentiment amongst investors as although earnings per share have been down over the 3-year period, revenue has grown significantly over that time. While some investors may find its 12% growth over the past 3 years dissatisfactory, many judges its performance as an indication of a possibly bright future for the company. Orthocell was the last trading at $0.39 per share with a market cap of $60.9 million.

 


 

Disclaimer:

This article has been prepared by the Australian Stock Report Pty Ltd (AFSL: 301 682. ABN: 94 106 863 978)

(“ASR”). ASR is part of Amalgamated Australian Investment Group Limited (AAIG) (ABN: 81 140 208 288 Level 13, 130 Pitt Street, Sydney NSW 2000).

This article is provided for informational purpose only and does not purport to contain all matters relevant to any particular investment or financial instrument. Any market commentary in this communication is not intended to constitute “research” as defined by applicable regulations. Whilst information published on or accessed via this website is believed to be reliable, as far as permitted by law we make no representations as to its ongoing availability, accuracy or completeness. Any quotes or prices used herein are current at the time of preparation. This document and its contents are proprietary information and products of our firm and may not be reproduced or otherwise disseminated in whole or in part without our written consent unless required to by judicial or administrative proceeding. The ultimate decision to proceed with any transaction rests solely with you. We are not acting as your advisor in relation to any information contained herein. Any projections are estimates only and may not be realised in the future.

ASR has no position in any of the stocks mentioned.

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