Health: Impedimed shares dip as investors sell the hidden bad news
Health & Biotech
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ImpediMed’s (ASX:IPD) December quarter report includes the word ‘up’ eight times and the word ‘down’ not at all, and yet the company’s shares dropped nearly 17 per cent at market open.
The stock fell from 17c to 14c.
ImpediMed expects to only hit its low-to-midrange full year revenue guidance of $7m-8.5m.
The company makes medical devices that can track and measure fluids in the body.
“The high range was predicated on the timing of a number of expected growth accelerators, including incorporation into the NCCN Guidelines and private payors beginning reimbursement for testing,” ImpediMed said today.
“We remain positive the company has made good progress in both areas; however, it is unlikely we will see material revenue from these initiatives this financial year.”
Furthermore, sales of its flagship SOZO device did not jump in the way investors had been expecting.
Impedimed sold 37 new SOZO devices, technology that enables assessment of secondary lymphedema and delivery of a precise snapshot of fluid status and tissue composition, quickly.
It said 16 of those were expansion of existing accounts. It has sold about 480 SOZO units since the device was launched in August 2016.
Investors had been expecting a jump in SOZO sales, but 37 is average for the 13 full quarters the device has been on sale for.
However, SOZO software as a service (SaaS) revenue for the December quarter of $800,000 was up 216 per cent from the previous corresponding period and up 14 per cent quarter over quarter.
Impedimed had $13m cash at the end of December, cash receipts touched $1.4m — slightly down from the prior quarter — and were not enough to prevent a cash burn of $4.4m.
That burn was largely due to staff costs of $3.5m and admin costs of $1.4m.
However, the company has made progress.
The contracted revenue pipeline is up 36 per cent from the previous corresponding period to $9.6m and up 4 per cent from the prior quarter. Annual recurring revenue is up 70 per cent from the previous corresponding period to $4.2m and up 7 per cent quarter over quarter.
Total revenue was $1.5m, up 63 per cent from the previous corresponding period and up 7 per cent quarter over quarter.
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