Nemaura Makes “The Announcement”

Posted on May 5, 2021 by Scott Shuda

In a press release this morning, Nemaura Medical (NMRD), a medical technology company focused on diabetes, announced receipt of a material purchase order from its U.K. licensee, DB Ethitronix Ltd. The press release describes the order as being for for 5,000 sugarBEAT® transmitters and 200,000 sugarBEAT® sensors, with an additional rolling monthly purchase order that is forecast to involve 15,000 transmitters and 2.1 million sensors over the next 24 months.

This announcement appears to be the culmination of a month-long campaign during which the company repeatedly teased that a major announcement was forthcoming. The release provided no guidance on how material the relationship with its UK licensee will be on a revenue basis. The company previously announced that it expects to book its first revenue in 2Q21.

Nemaura has a market capitalization prior to this announcement of $106 million and has seen significant share price volatility this year as investor hopes for the impending product releases has waxed and waned. Additionally, recent downward pressure has been attributed to NMRD likely being removed from the Russell 2000 index later this year. Management had seemed confident that impending good news would keep NMRD in the index, but the general feeling is that their news falls into the category of “too little, too late.” That said, the downtrend should end with this news, and there is the possibility of some short covering related to index arbitrage that might benefit investors in the short term.

Join our community of passionate fundamental investors where we discuss Nemaura and scores of other small cap names. Access and join our platform here. Disclosure: I am long NMRD and may buy or sell shares at any time.

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