2 ASX Small Cap Companies to buy in FY20.

Botanix Pharmaceuticals Limited (ASX: BOT)

Clinical stage cannabinoid company Botanix Pharmaceuticals Limited (ASX: BOT, “Botanix” or “the Company”) on 15 July 2019 announced exciting new data from studies recently conducted around its cannabidiol antimicrobial platform and a new development program ‘AB 2367’.

Botanix’s antimicrobial platform addresses the significant global threat

Key highlights  

  • New data has shown that a new drug candidate from Botanix’s cannabidiol antimicrobial platform has potent activity against hypervirulent strains of the bacteria Clostridium difficile
  •  Clostridium difficile is the most commonly acquired hospital infection worldwide and is responsible for over 30,000 deaths each year in the US alone
  •  Data for AB 2367, Botanix’s new development program, shows that cannabidiol is effective against the super hypervirulent 027 strain, which has been responsible for numerous recent severe outbreaks and deaths
  •  Studies were conducted in collaboration with world-leading Clostridium difficile researcher Prof. Dena Lyras at Monash Biomedicine Discovery Institute, Department of Microbiology
  •  This new data adds to the recently announced BTX 1801 study results that MRSA does not develop resistance to cannabidiol and underpins Botanix’s growing antimicrobial platform

The strong antimicrobial performance of cannabidiol forms a solid foundation for Botanix’s existing skin disease programs but provides the potential to be a development platform for the Company, which can be deployed across multiple human and animal health applications. The Company continues to assess its

(Chart Source: TradingView)

options for the development of the broader antimicrobial platform as it awaits finalisation of its ongoing acne and atopic dermatitis Phase 2 studies. (Data Source – Company Reports).

Veye’s Take

Botanix Pharmaceuticals Limited has very attractive Fundamentals with exceptional growth potential. With Botanix’s antimicrobial platform addressing the significant global threat it has furthered its potential. As per its chart, after a little bit of retracement, it can reach $0.38 also in short to medium term, where it has a massive resistance. We had initiated a buy on 9 May’18 at the then price of $0.135. It has grown by 181% since then. We mantain a “Buy” on Botanix Pharmaceuticals Limited at the current price of $0.26

NetLinkz Ltd (ASX: NET)

NetLinkz Ltd (ASX: NET) (‘NetLinkz’) announced on 26 June 2019 that it has received cash proceeds of AUD$160,000 for the sale of VINs as a VPN replacement product from its pilot program with China Telecom Wuxi for the period October 2018 to March 2019 from its China reseller based in Hong Kong and its China based agent JASTVIN.

The agreements the Company has in place and the receipt of these payments from the China reseller demonstrates the continuing demand by Chinese corporate customers, confirm the success of the pilot program and the process and effectiveness of the structures that allow the Company to receive cash payments from the sale of its product in China.

The sales of the VPN replacement product through JASTVIN will now continue through 51 cities in China.

This structure will allow the Company to progress additional sales and revenue initiatives including opportunities generated from the IoT Lab with iSoftStone in Beijing as announced to the market on 1 March 2019.

The Company anticipates these processes and initiatives will assist the Company to provide the market with guidance on sales and revenue.

Netlinkz Ltd announces successful Lab testing of Cyber Security SDWAN VIN Software with US Federal Government IT Solutions Provider Blue Tech NetLinkz Ltd announced on 25 June 2019 that Blue Tech Incorporated (‘Blue Tech’) has successfully completed Lab testing of the latest version of NetLinkz software. Blue Tech found “No issues with connectivity over the VINs whatsoever”. Blue Tech commented on the improved smoothness of the installation process of the new VIN and saw value in the new “automatic” version of networking the VINs.

(Chart Source: TradingView)

Following their successful testing of the re-engineered VIN client software in Blue

Tech’s San Diego Lab, Blue Tech has now requested a reseller agreement from Netlinkz outlining commercial terms. Netlinkz will now look to entering a reseller agreement with Blue Tech by the end of August 2019 for Blue Tech to commence distribution of the SDWAN VIN product via its significant US Federal customer base. Netlinkz’s software product will be incorporated in bundled solutions for use in mobile network solutions, data management, and cloud.

Blue Tech’s successful testing of the product and the commercialisation of the reseller relationship with Blue Tech will enable Netlinkz to expand its global Cyber and Connectivity footprint in the US with a trusted and significant IT Reseller servicing all US Federal Government, Defense, Civilian, and Intelligence Agencies as well as selected Fortune 500 customers.

Blue Tech is a prime contract holder of many of the US government’s leading IT procurement contract vehicles including NASA SEWP V, NIH CIO-CS, DHS FirstSource II, Air Force NETCENTS-2 Products, GSA Schedule 70, and many more. Blue Tech is a Woman Owned Small Business (WOSB)

Following the successful completion of the Blue Tech evaluation, NetLinkz will now look to expand its US cyber-security marketing and sales activities in the US focusing on providing turn-key cyber-defense solutions for US Federal Government customers, Defense and Intelligence Agencies as well as energy utilities and Fortune 500 companies. (Data Source – Company Reports).

Veye’s take

Netlinkz rewarded shareholders with a total shareholder return of 267% over the last year. So this year’s TSR was actually better than the three-year TSR (annualized) of 28%. These improved returns hint at some real business momentum. With successful completion of the Blue Tech evaluation, NetLinkz will now go for fullfledged expansion in the US which is a very extensive market. As per technical charts also, the stock could have really taken off after a pull back. We recommend a “Buy” on Netlinkz Limited at the current price of $0.25.


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