Cellmid Limited (ASX:CDY) has demonstrated a strong operational performance in both the consumer health and biotechnology divisions of the company for the first half of the 2019 financial year.
Revenue of $3.6 million was up 12% on the previous corresponding period (PCP), reflecting a diversified mix including sales from Japan and the company’s net assets increased by 89% on PCP to $8.2 million.
Significant one-off costs such as the payment of the Ikon award and the Platinum road facility took place with the balance sheet improving significantly after a $9.6 million capital raising.
“Enter 2019 in a strong position”
Cellmid chief executive officer Maria Halasz said: “We enter 2019 in a strong position to drive revenue growth across different markets and different channels.
“Our 'path to profitability 2020' strategy lays out the foundations for maximising shareholder value from both our consumer health and biotech assets.”
With deliberate focus on pursuing only those sales channels that are profitable, the company’s most mature geographical segment, Japan, has been delivering growing after-tax profits since financial year 2016.
The same discipline has been applied in Australia with benefits from this program expected to improve profitability from the second half of the 2019 financial year, as new products and more profitable distribution channels are progressively activated.
In the coming months Cellmid will focus on increasing high margin sales through an aggressive e-commerce campaign in the US and Australia, expanding premium retail distribution in the US and building on the QVC television shopping channel in Japan and China.
In the medium term the company’s distribution agreement with its Chinese partner Fukangren Pharma is expected to produce transformational growth once regulatory approval for the Australian manufactured Evolis pharmacy range is received.
Concurrently and while maintaining a low-cost collaboration model, the company’s midkine asset portfolio will be packaged for clinical development and partnership.
Cellmid chairman David King said: “With both asset portfolios well on their way to achieving their targets, the board is pleased to report a clean and strong balance sheet and to provide further details on its two-year strategic plan.”
Earlier this month the company revealed that the prestigious Journal of Experimental Medicine had published a significant study showing for the first time that midkine, for which the company holds intellectual property rights, promotes cardiac muscle inflammation associated with the occasionally fatal autoimmune disease, myocarditis.
The company’s midkine antibodies prevent cardiac muscle damage due to rampant inflammation, thereby reducing fibrosis and preserving cardiac function.