Medlab Clinical - Cash position supported by A$3.6m R&D grant

Medlab Clinical has released its unaudited cash flow report for Q123 and provided an update for the period. The company’s cash position was bolstered by the receipt of A$0.3m from sales of NanaBis and NanoCBD (under the Doctors Special Access Scheme) as well as a A$3.6m government R&D grant. In the absence of the grant, the company’s net cash outflow from operating activities for the quarter was A$3.5m. At the current burn rate and with a net cash position of A$5.3m (A$5.2m at end-FY22), we estimate the company’s operations are funded into CY23 (Q3 FY23). Due to the high activity and liquidity associated with the US biotech market, we see the potential Nasdaq listing, which Medlab is in the advanced stages of securing, as providing support for the company and its development pipeline. We expect the listing to coincide with the Investigational New Drug (IND) submission for NanaBis in the United States (to commence Phase III trials). Our valuation remains unchanged at A$236.1m or A$103.5/share.