Nightingale and US-based Phenome Health announce partnership

Translation: Original comment published in Finnish on 8/7/2024 at 9:13 am EEST.

The cooperation will include scientific research collaboration, public health programs and other health projects. The collaboration will make Nightingale's blood analysis results available to healthcare systems, employers, insurers and other stakeholders. Phenome Health is a US-based non-profit organization focused on disease prevention. Phenome aims to create a system for combining different types of human health and biology data to make this possible.

Given the news flow over the past year, we think Nightingale has clearly found a viable angle to open up the market. We believe that the ramp-up and materialization of customer wins, and if successful, the timing of this, has become the next key step in the company's investment story. The publication of the September results will be the next important checkpoint for the company's progress on this path, and we will review our view on the stock at that time, if not before.

Significant partnership for Nightingale if all goes well, though still a letter of intent

Already one of the projects envisaged under the planned collaboration (Human Phenome) includes the goal of enrolling one million participants for health analyses over 11 years, which, if realized at Nightingale's current high-volume list price (EUR 24/sample), would represent annual revenue of around 2.2 MEUR over 11 years. This is, of course, a very uncertain target, but in any case, it gives an idea of the scale of the collaboration, which would be quite substantial for Nightingale (revenue of 4.2 MEUR between 7/2022 and 6/2023). Nightingale and Phenome Health have signed a letter of intent to extend their collaboration agreement. The parties will announce this and the next steps of the cooperation at a later date. Thus, it will take time and many steps for the collaboration to translate into business for Nightingale.

First dams of the market have clearly opened - is sustainable business flowing behind?

We see the key to Nightingale's business growth as bringing its technology into the patient flow of existing healthcare providers. In the last year in particular, Nightingale has reported a large number of directly or indirectly supporting collaborations, most recently a significant number in the important US market:

-          Occupational health at Terveystalo (8/2023, Finland)

-          Mass General Brigham (9/2023, USA)

-          Pathology Asia / Innoquest Diagnostics (11/2023, Southeast Asia incl. Singapore)

-          Kaiser Permanente biobank (4/2024, USA)

-          Weill Cornell Medicine (4/2024, USA)

-          Boston Heart (6/2024, USA)

-          23AndMe (6/2024, USA)

-          Phenome Health (8/2024, USA)

In light of this news flow, we believe it is clear that the potential of Nightingale's technology has been recognized by the healthcare community and that the company's credibility has reached the level required by fundamentally conservative healthcare decision makers. In our view, the next step in the company's investment story is to see how the partnerships translate into business and whether they can create value for the partners and ultimately patients to enable long-term collaboration. Based on the information already received, the Terveystalo partnership has given promising initial signals in this regard. The next clear review point in this regard will be around the September earnings release, at which point we will review our view on the stock.