Health: UBI has more cash than its market cap

Up and down diagnostics microcap Universal Biosensors (ASX:UBI) had an up quarter in December, with cash flow turning positive.

The company was $3m in the black for the quarter, after being paid $6.4m in receipts.

Of the last eight quarters, the company has had positive cashflows for five. One of those quarters was an anomaly however, as client LifeScan chose to pay the remainder of its contracted service fees as a $31.5m lump sum.

Universal Biosensors is only worth $30m on the ASX, but has a bank balance of $37.2m.

It’s focused on the R&D and and manufacture of diagnostic test systems for point-of-care professional and home use.

The company did a deal with Johnson &Johnson division LifeScan in 2001 to make and commercialise a blood glucose monitoring device designed by the company.

And Universal Biosensors did another deal with Siemens Healthcare Diagnostics in 2011 to develop a blood coagulation analyser to help patients taking the anticoagulant drug Warfarin manage their medication.

Revenues from the sale of the blood coagulation analysis strips were $1.3m in the December quarter, bringing the total strip revenue for fiscal 2019 to $4.9m, an increase of 191 per cent compared to the prior comparable period.

Operating cash flows were supported by the receipt of $US4m ($5.8m) from Siemens during the quarter as prepayment towards future strip sales.

The balance of the Siemens prepayment account is $US2.8m, reducing by $US1.2m during the fourth quarter as Universal supplied strips to Siemens.

Several funds have been buying into Universal Biosensors over the last 18 months, buying up 46 per cent of the company.

CVC took 13.45 per cent, Virburnum Funds is sitting on 20.65 per cent, and Jencay Capital has 11.72 per cent.

In other ASX health news:

GI Dynamics (ASX:GID) had cash of $US2.5m in the December quarter compared to $US1.4m on September 30, thanks to financing activities. The company did not make any money.

Imricor Medical Systems (ASX:IMR) has received CE mark approval for its Vision-MR Ablation Catheter and Vision-MR Dispersive Electrode, which allows it to market and sell these products to clinical sites in the European Union.

Nuheara (ASX:NUH) has secured a 24-month arrangement for $2.5m in funding from New York-based fund manager Lind Partners, via a convertible note. The conversion price is 6c, Nuheara is currently trading at 3.3c.