EDX Medical [AQSE:EDX] is this week’s Aquis focus. Headquartered in London, with operations in Cambridge, Oxford and Northern Ireland, EDX designs and supplies digital and clinical diagnostic tests for the medical industry. The biotechnology company develops diagnostic tests for cancers, heart disease, neurology and infectious disease testing.
The firm’s tests help clinicians predict disease risk and support them to make better decisions in patient care, The tests also assist the biotechnology industry to develop new treatments such as novel vaccines.
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The company operates at the intersection of biology and digital technology, and its technology is especially prescient in patients who are more mature, giving clinicians the opportunity to detect health issues early and initiate treatment in order to save and extend quality of life.
Patient customizable testing
EDX personalizes its tests to allow clinicians to customize treatment for their patients, offering cost-effective ways to detect diseases. The company says: “Early disease detection and risk prediction is the most impactful way of reducing deaths and lowering the future costs of healthcare provision globally. [We] operate a molecular biology and diagnostics laboratory in Cambridge, UK, from which [we] perform research & development, provide testing and genomic sequencing services, undertake quality assurance and have established expertise in the design, development, validation and sourcing of diagnostic tests at commercial scale.”
The testing company works with a number of partners including Thermo-Fisher Scientific NYSE:TMO and is organized into three divisions: EDX Medical Limited, Hutano Diagnostics Ltd, and Torax Biosciences. Through collaborating with an antigen test manufacturer and AI technology developer, it was the first company in the UK to develop a SARS-Cov2 rapid antigen test for individual self-use that was deployed during the Coronavirus pandemic. The self-test was combined with a mobile-phone based digital reader, which improved reliability of test results over the human eye.
Starting life in 2021 when Professor Christopher Evans and Dr Michael Hudson established the company with initial private investment, the company listed on Aquis in 2022. Evans is a serial life-science entrepreneur, having founded more than 50 companies, 20 of which have been listed on six different stock exchanges. Many of these have specialized in creating and managing clinical trials and securing regulatory approval of new medicines and unique medical products. Hudson has been building life science businesses for 20-years, working at Unilever LON:ULVR, Bristol-Myers Squibb NYSE:BMY and Royal Numico among others, before moving into the venture capital and private equity sector in 2000.
RTO onto Aquis
In July 2022 TECC Capital Plc, a special purpose acquisition company listed on Aquis in June 2021, subscribed to GBP300,000 of EDX Medical’s Convertible Loan Notes, subsequently increasing its subscription to GBP600,000. In October TECC moved to acquire EDX and execute a reverse take-over in an all-share acquisition for GBP12m, satisfied through the issue of 200 million new ordinary shares at 6p a share, following a GBP1.2m placement for working capital purposes.
The RTO went through, and EDX was admitted to Aquis in November 2022. In February of this year, EDX acquired Torax Biosciences, a Northern Ireland-based research company, providing product development and pilot-scale fabrication of immunochemistry-based assays and diagnostic testing solutions, through the issue of 1,666,667 shares at 6p/share.
New capital raised
The company raised GBP1.725m, issuing 28,750,000 new shares at 6p/share in April, with Bridgemere Securities subscribing to GBP1.5m of the placement to become the biotech company’s second-largest shareholder.
EDX has not found it hard to attract investors, illustrating that an Aquis listing is no bar to raising money from the capital markets. Following on from Bridgemere’s investment, Seerave Enterprises, a wholly-owned subsidiary of the Seerave Foundation, a philanthropic non-profit organization which has a global commitment to improving patient access to personalized cancer treatment made a strategic investment in EDX of GBP350,000. This was followed by another GBP0.5m investment from Boru, a private investment company in June 2023.
The biotechnology company followed up the investment with the acquisition of Hutano Diagnostics in September through the issue of 9,090,909 new ordinary shares of 1p each in EDX at a price of 11p per share. In February, EDX went back to the market to raise around GBP4m in new capital through the issue of 33,425,000 new ordinary shares at a price of 12p/share, which was backed by EDX’s existing investor group. The subscription was so well received that EDX went back to the market before the close of the month for another GBP1.56m. The funds raised through the two were earmarked to support the acceleration of the development of EDX’s products to help meet global demand from healthcare providers delivering personalized treatments.
The company tagged on an additional GBP0.5m retail offer on 28th February and in April, EDX was promoted to Aquis’ Apex market segment, the part of the exchange reserved for larger, more established businesses with a proven growth strategy that have at least 25% of shares in public hands, a minimum of 25 shareholders and a two-year consolidated trading history and compliance with the QCA Code or the UK corporate governance code.
Administration expenses leads to expansion of losses
In its last financial statements published in mid-December for the six-months to end-September 2023, EDX was still in loss-making territory, reporting a GBP1.3m loss for the six-month period, up from a loss of GBP684,854 in the corresponding six-month period of 2022. A lot of this loss was attributable to administration expenses including new hires, acquisitions and product development.
The new investment bolstered EDX’s cash position, with the biotech company ending September with GBP1.1m in the bank, compared to GBP86,924 for the year previously. Trade and other receivables was up from GBP193,024 to GBP531,543 and EDX had a net liabilities of GBP388,000 against GBP691,397 for the year previous.
EDX is definitely on a growth trajectory. The company opened trading on 18th June at 7.5p, up 111.3% over one-year and up 46.3% year to date with its shares ranging from 2.5p to 11.625p over a 52-week period. The company has a market capitalization of GBP26m.
