Bioventix assured as industry demand wavers

Though Bioventix (BVXP) registered another steady increase in sales of its sheep monoclonal antibodies (SMAs), profitability was constricted due to adverse foreign exchange translations.

The group creates SMAs for use in human diagnostic applications, often in blood-testing machines installed in hospitals and other clinical settings across the globe. These types of antibodies can also enhance or mimic the immune system's defence mechanism. Little wonder, then, that we have been hearing a lot more about them over the past 20 months or so. Unfortunately, as we have seen with other medical supply companies, demand in the clinical sphere for routine diagnostic procedures has waxed and waned. Resources in the sector have regularly been diverted as the primary focus for clinicians has been on dealing with Covid-19. The group admits that “the timing of a return to normality remains uncertain”, but perhaps this simply highlights a creditable trading performance under strained circumstances.

The group’s most important revenue stream is linked to an antibody used globally in vitamin D deficiency testing, but the most significant impact on potential sales is through the commercial development of new troponin (prognostic marker) assays.

A possible income play, Bioventix paid out £7.71m in distributions through FY 2021, while net operating cashflow stood at £6.34m. It is on the hook for £1m in loan repayments in the current year, but management believes that it “is appropriate to maintain the established dividend policy in the immediate future”. For now, the group will have to contend with uncertain demand levels, though presumably global health authorities are faced with hefty procedural backlogs. Until the demand picture becomes clearer, we remain at hold.