BlinkLab Ltd [ASX:BB1]
Healthcare
Revolutionising Autism and ADHD Diagnosis with AI-Powered smartphone technology
We initiate coverage on BlinkLab Limited (ASX: BB1) with a current fair valuation of $1.74, representing a 545% expected upside from the current share price of $0.27. BB1 is an innovative healthcare company that has developed a unique smartphone app that, across a number of clinical studies, has shown to be highly accurate and better than competitors and traditional approaches in its ability to diagnose autism at much earlier ages. Apart from autism, BB1 is steadfastly developing an ADHD offering, with US-based autism revenues expected in the 2026/27 period, whilst US-based ADHD revenues are expected to ramp up in 2028. Although headquartered in Australia, BB1 boasts a core management team of world-renowned neuroscientists, including experts affiliated with prestigious institutions like Princeton University. This ensures that the technology powering BB1's app is firmly rooted in cutting-edge, scientifically validated research conducted by leading minds in the field. BB1 recently commenced its FDA 510(k) registrational study, with its chances of success being very high due to factors we discuss in this report. In time, BB1 plans to also enter the EU market.
Strong diagnostic value proposition based on proven science
BB1’s most advanced offering is a smartphone-based app that can, with high accuracy (higher than competitors), diagnose autism in children as young as 18 months of age. By doing so, BB1 is helping to solve an immense healthcare problem. Traditional diagnostic approaches are prone to subjective human judgement errors and lead to autism diagnosis on average at around 5 years of age, which is often too late for early intervention methods that have been proven to work and save significant costs for the health care system. This is because the app leverages the power of AI, machine learning and is based on the principles of neuroscience. The app works by analysingparticipant’s facial expressions and eye blink responses to certain stimuli sequences that have been scientifically proven to be associated with neurodevelopmental conditions such as autism and ADHD.
On track to achieve FDA clearance
Achieving FDA 510(k) clearance would allow BB1 to ramp revenues in the US. 510(k) clearance is based on a predicate device being already in the market. Since BB1’s offering has already proven its diagnostic efficacy across a number of robust clinical studies that have been done, including showing diagnostic accuracy rates higher than both of its key competitors in the US who are already cleared by the FDA, we objectively assess BB1’s likelihood of achieving 510(k) clearance as being very high. The FDA recently positively praised BB1’s registrational study design and methodology.
Valuation
We value BB1 at A$1.53 per share in a base-case scenario and A$1.95per share in an upside-case scenario. Incorporated in our valuation are several layers of conservative assumptions that reduce the addressable market size that BB1 can tap into, its market share, the price it can charge and other factors. Consequently, we can confidently put forth an attractive investment thesis for BB1.