Cellmid Ltd - Cellmid Quarterly Activities Report - Q2 FY2020
Cellmid Ltd (ASX:CDY)

Cellmid Quarterly Activities Report - Q2 FY2020


What's happened?

Cellmid Limited (ASX:CDY, 'Cellmid') have released their Quarterly Activities Report for Q2 FY2020.

What are the top 10 key highlights?

  1. Consumer health sales in Q2 FY2020 increased 19% to $2.45M (2Q FY2019: $2.06M) with strong sales growth in Australia (up 203% on 2Q FY2019) and in the US (up 132% on Q2 FY2019).
  2. Significant product manufacturing investment made in preparation for delivery into new distribution channels in Australia, Europe, China and the US in 2H FY2020.
  3. Growth in sales attributed to an increase in pharmacy sales and the start of television shopping events through openshop.
  4. US sales growth of 132% in Q2 FY2020 on pcp was driven by new store launches with Neiman Marcus as well as new beauty distribution channels.
  5. The Australian consumer health segment generated revenue of $496K in Q2 FY2020, up 203% on pcp (2Q FY2019: $163K). This sales growth primarily came from the new national pharmacy retail partnership with API, which is expected to be launched in over 400 pharmacies from March 2020.
  6. Early orders in export territories such as Germany and China and e-commerce sales have also started to deliver growing revenue.
  7. The appointment of Advangen LLC CEO, Brian McGee, during the quarter has been important in the US to fully exploit existing retail partnerships and focus on opening new channels.
  8. Currently looking to secure a national distribution partner in the US for the professional salon market, which would underpin the targeted sales growth in the US from 4Q FY2020 and beyond.
  9. On 9 October 2019 sales of the evolis® professional REVERSE range commenced on www.douglas.de, servicing the German market. Following the successful launch, the full evolis® Professional collection will be available and other German speaking countries will also be serviced by Douglas from the fourth quarter of FY2020.
  10. The Company is in the process of planning for the Midkine Symposium in May 2020, where significant new findings will be discussed on midkine biology and its clinical application. Information on the program and its relevance to the Company’s active partnering strategy will be unveiled before the meeting.

What does this announcement mean?

Erik Bergseng CFA® from Mawson Graham provides perspective on this recent announcement.
Erik Bergseng CFA®
Written by Erik Bergseng CFA®
Published Jan 30, 2020

As outlined in the announcement, Cellmid have demonstrated triple digit quarterly PCP sales growth in Australia and the U.S. Also of significance is the expectation that evolis® will be launched into 400 pharmacies as part of their agreement with API from March 2020, which could contribute significantly to the top line in future reporting periods. Investing in inventory ahead of 2H FY2020 is another strong indication that the company is expecting a ramp up in sales from its multiple distribution channels. In summary, we think there is strong evidence that Cellmid will be able to continue growing sales in the second half of FY2020 which in turn could push the Advangen subsidiary towards profitability as indicated by management.

The information within this section has been provided by Mawson Graham Pty Ltd and is for general information purposes only and is not intended to reflect any recommendations or financial advice. The information in this section has been prepared without taking into account your objectives, financial situation or needs. For this reason, you should consider the appropriateness of the advice or recommendation in light of your own personal circumstances, relevant risk factors, the nature and extent of your risk of loss, as well as the legal and accounting consequences before acting making an investment or trading decision regarding any Financial Product mentioned herein. While it is believed that all information sourced and contained within this section to be accurate at the time of publication, liability for any errors, omissions, accuracy or completeness of the information (except any statutory liability which cannot be excluded) is specifically excluded by Mawson Graham Pty Ltd, its associates, officers, directors, employees and agents. Past performance is not a reliable indicator of future performance. Important Disclosure: Mawson Graham Pty Ltd, its directors, associates and employees advise that they may hold securities, may have an interest in and/or earn brokerage, investor relations fees, corporate fees, and other benefits or advantages, either directly or indirectly from client transactions arising from any information mentioned within this section and in documents published within this section.
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CEO's Summary

Maria Halasz

“Our second quarter results show the success of our global revenue diversification strategy with consumer health sales accelerating in both Australia and the US. In addition, we are in the early stages of expansion in both Europe and China. We have established several new distribution channels in these regions, and we have invested substantial resources into inventory and marketing to deliver in our growth targets in 2H FY2020. We have every reason to expect continued acceleration in our revenue growth over the years ahead.”

Maria Halasz
CEO, Cellmid Ltd

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