Why did the AnteoTech (ASX:ADO) share price tumble 13% on Monday

AnteoTech shares have suffered in the past week.

| More on:
man grimaces next to falling stock graph

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Key Points

  • AnteoTech shares fall again on the back of a quarterly business update
  • Management noted high barriers to market entry
  • Company still in collaboration with TGA regarding regulatory approval for its RDT

The AnteoTech Ltd (ASX: ADO) share price tumbled today following the release of a business update from the company.

At market close, the nanotechnology company's shares finished down 13.33% to 19.5 cents.

Ever since AnteoTech's announcement last week regarding its EuGeni Reader and COVID-19 Rapid Diagnostic Test (RDT), its shares have dropped by 45%.

AnteoTech signals challenging market entry

Investors have continued to sell off AnteoTech shares after digesting the company's business update for the second quarter of FY22.

According to the release, AnteoTech advised that its engagement with the Therapeutic Goods Administration (TGA) is ongoing. The company is hoping to achieve regulatory approval for its EuGeni Reader and COVID-19 RDT.

Management noted that governments worldwide are continuing to heavily regulate in-vitro diagnostic (IVD) devices for market entry.

The products must be supported by the manufacturer and integrate the support of OEM suppliers, distributors and supply chain organisations. While many companies close to AnteoTech have failed to adhere to the stringent guidelines, this has forced them to remove product batches or entire products from the market.

For AnteoTech, being associated with these companies has caused valuable reputational damage and is hindering further developments.

At the Annual General Meeting in November, CEO Derek Thomson presented the CY22 Revenue Generation Approach, outlining the four key areas of focus. These areas were increasing market footprint, regulatory approvals, building reputation, and maximising revenues.

The business team is expected to drive sales and marketing processes to sell to target segments. This will be executed by utilising the company's global distribution network.

Looking at a financial standpoint, AnteoTech advised that cash receipts for the quarter totalled $2.13 million. This primarily came from a $1.96 million refund under the Federal Government's Research & Development (R&D) tax incentive scheme.

Net cash outflows from operating activities stood at $0.61 million.

The Company stated it remains well-funded to support its near-term commercial and clinical milestones.

At the end of the calendar year, AnteoTech had $16.62 million cash on hand and no debt.

About the AnteoTech share price

Despite today's heavy losses, the AnteoTech share price has advanced by 95% over the past 12 months.

The company's shares reached an 8-month high of 41.5 cents on 24 January, before crashing back down.

Based on today's closing price, AnteoTech has a market capitalisation of roughly $384.94 million, with more than 1.97 billion shares outstanding.

Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on Healthcare Shares

Cropped shot of an attractive young female scientist working on her computer in the laboratory.
Healthcare Shares

Why is everyone talking about ResMed shares?

It’s been a good year for ResMed shareholders. Let’s find out why.

Read more »

Male doctor in a lab coat working at laptop looking serious.
Healthcare Shares

This bombshell for ASX healthcare shares could hit 6 million Australians

This could have a large impact.

Read more »

Two scientists in a Rhythm Biosciences lab cheer while looking at results on a computer.
Healthcare Shares

2 ASX healthcare shares having a stellar run today

The ASX healthcare sector is down today but these two stocks are bucking the trend.

Read more »

A company manager presents the ASX company earnings report to shareholders at an AGM.
Healthcare Shares

Why this $13 billion ASX 200 healthcare stock is surging today

A change in sentiment for the healthcare player.

Read more »

Shot of a scientist using a computer while conducting research in a laboratory.
Healthcare Shares

This ASX 200 stock hit a 52-week low and a top broker thinks it can rebound

Patient investors may see this stock make a pleasing recovery.

Read more »

A couple smile as they look at a pregnancy test.
Healthcare Shares

Why this sold-off ASX healthcare share could be an exciting dividend buy

This could be a healthy stock for dividends.

Read more »

a smiling woman sits at her computer at home with a coffee alongside her, as if pleased with her investments.
Healthcare Shares

Is CSL the best ASX 100 share to buy now?

Bell Potter has good things to say about this blue chip star.

Read more »

Scientists in a laboratory look at a computer screen with anticipation on their faces representing a potential change in the performance of ASX biotech shares in FY23
Healthcare Shares

Down 10% in a month, are CSL shares feeling the sting of a potential disruption?

Brokers are still bullish.

Read more »