SciBase prepares to enter Italy through a sales and distribution partnership

SciBase's new partner, Kilabs, is an Italy-based distributor of medical technologies focused on several specialties, including dermatology. The announced partnership should help provide SciBase with a distribution and sales channel in Italy. According to the press release, SciBase will now adapt Nevisense for the Italian market to meet regulatory requirements, while Kilabs will prepare for a market launch expected in H1/2025. In our view, the partnership should provide an effective way to enter a new market without requiring significant investment from SciBase. Our estimates already anticipate strong growth and continued customer wins, so the news has no immediate impact on our estimates or view on the stock.

Efficient way to open yet another market

In practice, the announcement should help SciBase enter a new market and is likely a trade-off with long-term sales margins and upfront investment. We believe that partnering is clearly the right choice for new market entry at this stage. In our view, SciBase's main near-term priority is to ensure progress towards cash flow neutrality, while strictly prioritizing cash burn to the most impactful initiatives. In this case, a partnered entry into Italy, if successful, could help achieve cash flow neutrality more quickly without significant upfront investment. In April SciBase announced a similar partnership to enter the United Arab Emirates.

We did not have the Italian entry in our books for SciBase, but given the partnership structure, we see the news as positive for the company. The news has no immediate impact on our estimates or view of the company. Our estimates already include the assumption that SciBase has clear success in winning and ramping up several new customers, especially within the skin cancer application area (2023-2026 annual revenue growth ~30-60 % p.a.), and continuous signs of customer wins and their ramp-up progress are needed to support our estimates.