Biotech’s Potentially Disruptive Diagnostics Platform on ‘Cusp of Commercialization’

Source: Streetwise Reports   12/06/2020

Recent trial results, a timeline to the launch of Quotient’s system and the reasons the debut should be successful are discussed in a Cowen report.

In a Dec. 1 research note, Cowen analyst Dr. Joshua Jennings reported that Quotient Ltd. (QTNT:NASDAQ) announced “strong concordance results” from the recent European Union (EU) field trial of its MosaiQ Expanded Immunohematology (IH) Microarray transfusion diagnostics platform.

“These data represent a significant milestone in the MosaiQ development journey as the system is now on the cusp of EU commercialization,” Jennings added.

MosaiQ is a fully automated, consolidated testing platform that should increase efficiency and productivity. “It is expected to perform all mandated serological disease screening tests, such as HIV and hepatitis, and enable the detection of additional pathogens, thereby increasing the safety of the blood supply,” Jennings explained.

He presented the preliminary EU data and what they mean for advancing the product. MosaiQ identified antigens A, B, E, e, K, k and Cw with 100% concordance and antigens D, C, c with 99% concordance, to a predicate system. It detected antibodies with 97% concordance.

“The totality of data recorded in these results should rule the day and drive an approval decision,” Jennings commented.

That decision is expected in Q2/21, assuming Quotient files a CE mark application that includes the field study results, by year-end, which it intends to do. The biotech will request two CE marks, one for a basic menu and one for a comprehensive menu that encompasses every test in its expanded menu. This strategy should afford Quotient more flexibility when dealing with specific tenders in Europe.

“With an approval in hand, the company will be able to market its first commercial test menu for MosaiQ (Expanded IH + Initial Serological Disease Screening) in Europe,” Jennings highlighted.

Cowen expects Quotient to “gain early and medium traction after the 2021 launch,” for several reasons, Jennings indicated. For one, key opinion leaders and consultants continue to purport that if MosaiQ can identify antigens, detect antibodies and screen for serologic diseases as well as the existing platforms do then it can disrupt the industry. Also, feedback from EU hypercare sites is reported to have been positive.

The timing should benefit the launch as 15 EU tenders are expected to become available starting in Q2/21 and throughout the ensuing one and a half years.

Further, Quotient’s successful commercial debut of its COVID-19 Antibody Microarray bodes well for this next one. With the previous, the company signed up 10 clients within three months’ time and has built industry relationships in the process. Finally, the company will be able to easily meet initial demand as it already has inventory, of about 20 systems, on hand.

Cowen has an Outperform rating on Quotient because the “MosaiQ platform has the potential to transform the blood transfusion diagnostic industry,” Jennings noted. The investment banking company has a $14 per share price target on Quotient, the current share price of which is about $6.94.

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Disclosures from Cowen, Quotient Ltd., Company Update, December 1, 2020

Analyst Certification
Each author of this research report hereby certifies that (i) the views expressed in the research report accurately reflect his or her personal views about any and all of the subject securities or issuers, and (ii) no part of his or her compensation was, is, or will be related, directly or indirectly, to the specific recommendations or views expressed in this report.

Important Disclosures
Cowen and Company, LLC and or its affiliates make a market in the stock of Quotient Ltd, Establishment Labs and Itamar Medical securities.
Cowen and Company, LLC managed or co-managed a public offering of Quotient Ltd and Establishment Labs in the past 12 months.
Cowen and Company, LLC received compensation for investment banking services from Quotient Ltd, Establishment Labs and Itamar Medical in the past 12 months.
Cowen and Company, LLC and/or its affiliates expect to receive, or intend to seek, compensation for investment banking services in the next 3 months from Quotient Ltd.
Quotient Ltd, Establishment Labs and Itamar Medical is or has been in the past 12 months a client of Cowen and Company, LLC; Cowen and Company, LLC has provided or is providing investment banking services during the past 12 months.
Cowen and Company, LLC and/or its affiliates beneficially own 1% or more of the common equity securities of Establishment Labs.
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