I don't mean to be the fodder for so much speculation. I've been traveling and decided to take a break from posting. I'm home now, so I'll drop a long one on you. I did reduce my BCART position at the end of last year because I needed to offset gains with losses for tax purposes. I don't know if Belgium or European tax law works the same way, but U.S. requires that such transactions be completed by the end of the year. I'm finding my self in a similar situation this year, and might need to sell additional shares to offset recent gains in ENDO.
I did most of my venting back in August when it became clear to me that the fire hitting the reagent supply warehouse was just about the most damaging thing that could happen to BCART. Not knowing the specifics of BCARTs reagent sourcing agreements, I feared that losing this supply in the midst of a pandemic that already put considerable pressure on PCR reagent supplies could be crippling. Much of the supply of these reagents is controlled by major players (Fisher, Roche, Qiagen, etc.) so I feared that they might not be very cooperative with BCART or might use the predicament to charge exorbitant prices. Hence my August questioning about the origins of the fire and questioning potential for the fire being an act of sabotage. The whole fire situation was almost intolerable since the pandemic related deferral of oncology testing and the need for social distancing created a tailwind that could accelerate Idylla adoption and the road to profitability by a few years.
Those concerns are in the past and we must deal with the current situation. The 3rd qtr announcement is as I expected. BCART will meet the revised 40% cartridge yr end growth estimate and this is intended to placate investors with much lowered expectations (since the fire). However, what most investors really want to see is a respectable growth rate while making progress in reducing the costs of goods sold and/or securing a higher per unit sales price so that significant margin improvement is evident. Unfortunately, BCART has once again figured a way to kick this can down the road.
I want to leave off with a positive upbeat message because I'm in a good mood after vacation. BCART is selling a differentiated product that enables the user to expend less labor effort to achieve quicker results than can be achieved by the conventional currently utilized MDx testing channels. The following PR statements made me optimistic that progress is being made in the EU and Emerging markets where registration approvals have progressed the furthest.
"Customer orders were definitely there to maintain the growth rate of 96% we achieved in H1 2021,"
"Strongly growing demand in oncology across Europe"
"Confirmed recovery of oncology volumes in distributor markets1 that recorded the strongest growth of all regions in Q3 2021"
"Despite the customer order backlog, cartridge volume growth was particularly strong in Europe and in certain distributor markets where the pandemic impact on oncology testing is clearly fading out"
" instrument placements in Europe and in distributor markets are equally well ahead of 2020 numbers."
"Regulatory update distributor markets – During Q3 2021, the registration of the Idylla™ NRAS-BRAF Mutation Test (CE-IVD) and the Idylla™ KRAS Mutation Test (CE-IVD) was completed in Taiwan."
1 Distributor markets are Defined as the world excluding European direct markets, US, China and Japan
The fact that the greatest demand and growth is coming from areas where registration for full IVD use has been obtained (not just RUO), is immensely encouraging. China, Japan and US should start seeing registration approvals in the coming months that should similarly increase the demand for the Idylla system. Now management needs to earn their pay by establishing reagent agreements and supplies.
FL