Nightingale Health deepens its strategic cooperation with Terveystalo

Translation: Original comment published in Finnish on 7/2/2023 at 11:11 pm.

Nightingale expects that the expanding cooperation will significantly increase the blood sample analysis volumes ordered by Terveystalo. In 2021, the companies entered a strategic partnership of several years, which will expand if the announced letter of intent is implemented. Commercial advances are important to the progress of Nightingale’s equity story. However, our revenue estimates for Nightingale already include expectations of growing commercial blood sample volumes, so the release does not cause pressure to revise our estimates at this time. We estimate that for Terveystalo the scale of the cooperation is more limited.

The volume of analyzed samples should increase, but details are expected in fall

The release does not give much detail on the letter of intent. Nightingale Health and Terveystalo's target is to announce the agreement of the expansion of the partnership in September 2023 at the latest at which time we expect the companies will give more details on the possible agreement. However, Nightingale expects that the expanding cooperation will significantly increase the blood sample analysis volumes ordered by Terveystalo.

Currently, Terveystalo uses Nightingale’s blood analysis in a separate subscription service, where the customer receives health risk predictions and general advice on how to reduce them in Terveystalo‘s application. The blood sample analysis volumes accumulated with this service model has so far been low. However, the companies have built a logistics system for the transportation of blood samples for this purpose, which we believe is scalable to a higher volume. The significantly increased blood sample analysis volumes mentioned in the release may be based on, e.g., cost-effective replacement of certain conventional blood tests with Nightingale’s blood analysis (39 blood values suitable for clinical use with CE markings). In any case, we consider testing new commercial models as positive for Nightingale. The company is still seeking applications made possible by larger-scale commercial operations that would allow the business to grow toward a cash-flow-positive development phase.