Nightingale H2: A control point for the early stages of commercialization

Translation: Original comment published in Finnish on 13/09/2021 at 6:14

Nightingale, a provider of preventive healthcare technology, will publish its financial statements release for FY2021 on Wednesday, September 15. Since its listing in March, the company has actively worked on the commercialization of its technology. At the moment, Nightingale is working on several fronts and, in this report, our attention is focused on the progress of commercialization and the next steps. As the company is still in a development phase, the report’s figures still play a minor role. The company's valuation has remained well below the listing level, which suggests that the market remains skeptical about the successful commercialization of the company's technology on a larger scale.

After listing in March, Nightingale has taken quick steps forward in the commercialization of its technology. In April, the company received a clinical laboratory certificate in Japan, signed a strategic cooperation agreement with Terveystalo and signed a sales contract for health and welfare services with Japanese Mitsui. In May, the company signed a strategic partnership with Reaktor to support scaling up the company's digital solutions. In June, Nightingale secured the availability of its home tests by partnering and making a minority investment in Weavr Health, whose blood collection device Nightingale has used to carry out the first steps of its home test pilot. In July, the company also accelerated the development of its digital solutions through acquiring Yolife.

Currently, Nightingale is working on several fronts. Developing operations in Finland and Japan, building digital solutions and integration after the business acquisition, expanding the home test pilot, continuing research and applying for FDA approval are all ongoing simultaneously. Therefore, the company must proceed with discipline to keep all the strategically important projects on the right track. The results of how well the strategy is implemented will be visible in the company’s figures later, so we will look at the company’s communication to see how this work is progressing.

Regarding the figures, we expect revenue for H1 to remain low at EUR 1.0 million. Furthermore, we expect profitability to be clearly in the red and loss before taxes to be EUR -8.3 million. The costs for the early part of the year will be higher due to non-recurring IPO costs, which amount to EUR 8 million at maximum. We have taken these fully into account in our forecast. However, the low profitability that we expect is also explained by Nightingale’s growth strategy that’s in its investment phase, as well as the virtually non-existent revenue that will slowly start to form during the rest of the year. The company's financial year ends on June 30 and, therefore, differs from the calendar year.

Nightingale’s valuation has clearly decreased from the level of listing (EUR 6.75 per share). The market remains skeptical about the successful commercialization of the company's technology on a larger scale. It will take years to gradually improve visibility on this, so the expectations for this report aren't particularly high in our view.