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The Next Science share price is tanking on a trading update

The Next Science Ltd (ASX: NXS) share price has slipped 5% to $2.52 today but investors shouldn’t be disheartened as the stock is still up 150% from its April 2019 $1 per share initial public offer price. 

For the quarter ending September 30 2019 Next Science reported an operating cash loss of US$2 million on US$927,000 in revenues. Cash receipts were down from $1.2 million booked in the prior quarter.

For the 9 month period to September 30 2019 it has posted an operating cash loss of US$9.1 million on sales of US$2.86 million.

(Editor’s note: the original version of this article incorrectly stated the operating cash loss was US$91.1 million the correct amount is an operating cash loss of US$9.1 million).

Next Science’s CEO Judith Mitchell commented: “As we commercialise our technologies, the revenue growth trajectory will continue to be lumpy in coming quarters as initial orders from our distribution partners tend to be large and irregular. Growth in revenues will not be linear as Next Science does not have control over the purchase and sales cycles of our distributors, as new products enter new markets.”

Next Science already has four anti-bacterial FDA-approved products (used to treat common wounds or lacerations) in the US market under its ‘Xbio Family’ generic label. It also has multiple products in the approval pipeline to mean some of the excitement around this business is justified. 

Based on 106.3 million shares on issue the company has a market value around $268 million. Other speculative biotechs to watch include Mesoblast limited (ASX: MSB), Opthea Ltd (ASX: OPT) and Paradigm Biopharmaceuticals Ltd (ASX: PAR)

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Motley Fool contributor Tom Richardson has no position in any of the stocks mentioned.

You can find Tom on Twitter @tommyr345

The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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