We are discontinuing our coverage of SciBase as the company has terminated the research service agreement. Consequently, we will no longer give the stock a target price (prev. 0.45 SEK) or recommendation (prev. Reduce).

SciBase kept building its commercial momentum in the US, where it achieved strong revenue growth in Q3. Yet, the major news of the day was the large capital raise, which would carry the company to cash flow positivity.

SciBase kept building its commercial momentum in the US where it achieved strong revenue growth in Q3 from low levels. Yet, the major news of the day was the large capital raise, which according to our current assumptions would carry the company to cash flow positivity. After adjusting for the capital raise, the risk/reward is starting to improve but is not yet looking attractive enough as we also expect the rights issue to put downward pressure on the share.

SciBase will release its Q3 report on Tuesday at 8:00 am CEST. We expect revenue to have continued to grow at a still low absolute level, with earnings continuing to fall further into the red. Once again, we'll be looking for additional visibility on commercialization progress and timelines, especially for the expansion of insurance coverage in the U.S., as we see this as a key driver for achieving cash flow neutrality and reducing risks to the investment case.