BlinkLab Ltd [ASX:BB1]

Healthcare

Outstanding USA Pilot results set the path for 2026 FDA Clearance

We update BB1 with a revised Target Share Price of $2.38, representing a 263% upside potential from the current share price of $0.655 and a 37% increase from our Target Share Price in our initiation report from February this year. Since February, BB1 has executed on its strategy as it said it would and as we expected, successfully completing a robust USA Pilot Study, focused on autism diagnosis, spanning 485 participants and achieving strong diagnostic rates of accuracy at levels much higher than what the FDA has advised that BB1 will need to showcase in the upcoming FDA Pivotal Study. As a result, there is a material risk reduction to BB1’s prospects, leading to a justifiable upward valuation rerate. Pilot Study was purposefully designed to stress test BB1’s technology under very challenging conditions, and BB1 was more than up to the challenge. Learnings from the Pilot were discussed with the FDA and have led to the FDA approving BB1’s proposed study design for the upcoming 2026 FDA study, including a reduction in the study size from 1000 to 528 participants.

BB1 outperforms FDA standards in highly challenging autism Pilot Study

The Pilot’s characteristics were designed to be intentionally challenging to create the ultimate stress test for BB1’s AI-driven diagnostic tech for autism. The population set contained many diagnostic challenges, such as many children having mild-threshold cases of autism and children who had co-occurring conditions, sometimes overlapping with autism, such as ADHD and other related disorders. Such a population set is exactly the type in which accurately diagnosing autism is the hardest, even for expert clinicians. Despite these challenges that stretched BB1’s technology, BB1 did exceptionally well, achieving an 83.7% Sensitivity and 84.7% Specificity, which are both well above the FDA’s guided minimum threshold of greater than 65% Sensitivity and Specificity that is needed to meet regulatory clearance. BB1 well exceeded not only that benchmark but also what its two main USA competitors, who already have FDA clearance, achieved in their respective FDA Pivotal studies.

A platform beyond autism – expanding into ADHD, Dementia and beyond

We endorse BB1’s management’s vision to go beyond just autism and become an innovative platform play that uniquely brings together neuroscience, AI, and smartphone technology to accurately and earlier diagnose a range of neurodevelopmental and neurological conditions that affect millions of children worldwide. BB1 is currently successfully progressing multiple clinical studies with tier 1 partners aimed at expanding its technology’s reach beyond paediatric autism into adult autism and conditions such as ADHD (main near-term focus) and subsequently also dementia and Alzheimer’s.

Valuation range of A$2.14-$2.62 per share

Our updated valuation justifiably rewards BB1 for its strong USA Pilot Study results that lead us to increase the probability-based expected value of the autism revenue streams that BB1 can capture in the USA due to the now materially lower risk of not achieving FDA clearance. Underpinning our valuation are several other conservative assumptions that add confidence to our bullish investment thesis.

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