BATM Advanced Communications (BVC:38.5p), a £155m market cap provider of medical laboratory systems and network solutions, and a constituent of my 2017 Bargain Shares Portfolio, has delivered the bullish half-year results I had anticipated in early summer ('Profit from 5GM with BATM', 8 Jun 2018). BATM continues to make significant progress monetising its intellectual property, which is why the share price has risen by almost half since that article, and doubled on my 19.25p entry point in just 18 months.
There should be more upside to come as investors have yet to cotton onto BATM’s joint venture, Ador, with Netherlands-based private group Gamida. Ador will start shipments next year of its novel molecular diagnostic platform that fully automates the rapid analysis of nucleic acid samples and delivers results in less than 90 minutes. It is being targeted at screening for hospital-acquired infections such as MRSA, and C. Diff, a leading cause of morbidity and mortality; and to identify tropical infections in travellers returning home with fevers, some of which can be life threatening and need early and accurate diagnosis. The patent protected bench-top analyser can probe 100 targets in a single proprietary carbon array whereas current products only probe on average between four to six targets per test sample. Chief executive Dr Zvi Marom believes it will “make a big splash” when launched next year. He has a point as the value of the IP to a big player such as Abbott Laboratories or Roche Diagnostics could be in excess of BATM’s current market value.
Equally exciting is the joint development agreement (JDA) with Arm Holdings to develop and market infrastructure solutions for virtual network functions, a technology that will play a critical role in supporting the services of 5G network operators and run applications such as autonomous vehicles. BATM has already conducted successful proof-of-concept trials with tier 1 and 2 telecom operators and will book sales from them in the second half.