Dawson James - Bluejay Diagnostics (BJDX)
A Rapid Point of Care Test for Sepsis Triage: Razors & Blades - Launching with a Buy Rating and a $10.0 Price Target
Bluejay Diagnostics is focused on improving patient outcomes in the critical care setting using the company’s Symphony diagnostic platform. The goal is to deliver a rapid, cost-efficient, point of care product for IL-6 (a key inflammation marker) in diseases like Sepsis and even Covid, too, in an easy, cost-effective, and rapid manner. In doing so, we see Symphony as driving a paradigm shift.
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A Paradigm Shift – A Rapid Point of Care Test for IL-6: Bluejay’s IL-6 test for sepsis triage is intended to measure IL-6 levels in whole blood samples in near-patient settings. Interleukin-6 (IL-6) is an established biomarker of immune system activation. It is elevated in infection, inflammation, and cancer. IL-6 presents as an early “first responder” and needs to be measured quickly and reliably.
What is Symphony? Symphony is an automated diagnostic system consisting of a fluorescence immuno-analyzer that uses a single-use diagnostic test cartridge with reagents integrated into the cartridge. Symphony utilizes a ‘sample-to-result’ format, which means that once a specimen is taken from the patient, it is placed in the cartridge. Then the cartridge is placed inside the analyzer, where the test is run in minutes without further technician intervention or additional reagent.
Initial Testing Program and Planned Commercialization. This month the Company expects to have a pre-submission filing. Bluejay initiated the start of the clinical testing program for the IL-6 test for sepsis triage in October 2021 under a single protocol at three sites, two sites in the University of Texas Southwestern Medical Center (the William P. Clements Jr. University Hospital and the Zale Lipshy Pavilion Hospital) and the third site at the Parkland Memorial Hospital. Results from this program should form the basis of the FDA Pre-Submission application expected to be filed early this year. The results from this program form the basis of the Company’s planned 510(k) marketing application, intended to be filed in Q322. The Company plans to incorporate feedback from the FDA pre-submission to modify these studies to support premarket clearance (which could be through a traditional 510(k) or de novo application). The Company may also consider alternative regulatory paths, including, for example, an Emergency Use Authorization (EUA).
A Successful IPO – $21.6M (upsized) Funds Raised – Funded through next series of key events. Cash on hand is critical at this stage for both the development and commercialization plans. While we anticipate no immediate need for capital, we do model a future raise to execute the “water-fall” commercial sales strategy in the future.
Valuation: We project our model out to 2030. We apply a conservative 30% success probability to our projected revenues in our Symphony product model in addition to our 30% risk rate applied in our Free Cash Flow to the Firm (FCFF), discounted EPS (dEPS), and Sum-of-the-Parts (SOP) models, which are then equal-weighted and averaged and rounded to the nearest whole number to derive our 12-month projected price target of $10.0
Risks to our thesis include: 1. Regulatory Approvals; 2. Clinical Science 3. Dependence on OEM suppliers; 4. Development of the target markets 5. Intellectual Capital 6. Dilutio
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