Executive Summary / Key Takeaways

• Trinity Biotech is undergoing a profound strategic transformation, aiming for sustainable profitability and significant growth by streamlining existing operations and pioneering disruptive technologies.
• The company projects a critical profitability inflection point, expecting to be Adjusted EBITDA-positive in Q2 2025 and cash flow positive from ongoing operations starting Q3 2025, driven by its comprehensive transformation plan.
• A key growth driver is the next-generation Continuous Glucose Monitor (CGM), designed to be at least 40% more affordable and sustainable than current market leaders, positioning Trinity Biotech to disrupt a rapidly expanding $10 billion market.
• Strategic acquisitions in prostate cancer and preeclampsia diagnostics, alongside an investment in rapid sepsis testing, are expanding the company's high-growth product pipeline, leveraging its certified Immco lab.
• Operational efficiencies, including manufacturing consolidation, offshoring, and supply chain optimization, are expected to drive gross margins above 50% by 2025 and contribute to annualized run-rate revenues of approximately $75 million and EBITDASO of $20 million by Q2 2025 from existing businesses.

Setting the Stage for a Transformed Trinity Biotech

Trinity Biotech plc (NASDAQ:TRIB) stands at a pivotal juncture, shedding its past operational complexities to embrace a future defined by streamlined efficiency and groundbreaking diagnostic innovation. For decades, Trinity Biotech has been a player in the medical diagnostics market, developing and marketing products for clinical laboratories and point-of-care segments globally. Its historical footprint spans infectious diseases, sexually transmitted diseases, autoimmune disorders, and crucially, diabetes management through HbA1c testing. The company's current strategy, initiated under new leadership in late 2023, is a bold pivot: to transform its existing business into a high-performing, cash-generative enterprise while simultaneously building a scalable new business in wearable biosensors, starting with a meaningfully differentiated Continuous Glucose Monitor (CGM). This dual approach is designed to unlock significant shareholder value in a rapidly evolving healthcare landscape.

The broader diagnostics industry, valued at over $10 billion annually for CGM alone, is characterized by increasing demand for affordable, accurate, and sustainable solutions, alongside the accelerating integration of AI and data digitalization. Major players like Abbott Laboratories (ABT), Roche Holding AG (RHHBY), Thermo Fisher Scientific (TMO), and Danaher Corporation (DHR) dominate various segments, benefiting from scale, extensive R&D, and broad portfolios. Trinity Biotech, while a more niche player, aims to carve out a significant position by focusing on technological differentiation and cost-effectiveness, particularly in areas where larger competitors may present less tailored or more expensive solutions.

Technological Edge: Redefining Diabetes Management and Beyond

At the heart of Trinity Biotech's future growth lies its next-generation Continuous Glucose Monitor (CGM), a technology acquired from Waveform Technologies. This proprietary glucose sensor technology is engineered to address a critical market need: reducing the daily cost and environmental impact of CGM solutions. Unlike current market leaders such as Abbott and Dexcom (DXCM), whose products often rely on entirely or mainly disposable components, Trinity Biotech's solution features a reusable applicator and transmitter paired with a simplified, low-cost disposable sensor patch. This modular design is projected to make the Trinity CGM solution at least 40% less expensive per day than existing main products, significantly reducing both cost and waste. For instance, while leading products can generate approximately 11 pounds (5 kilograms) of non-recyclable plastic and metal from 72 disposable applicators over two years, Trinity's solution would use just one reusable applicator over the same period.

Beyond cost, the company's CGM+ platform is designed to capture additional physiological data points beyond glucose, akin to smartwatches, providing key insights to users and strengthening its value proposition. This "AI-native" system, combining multi-sensor data and real-time analytics, positions Trinity Biotech within the burgeoning $260 billion AI wearable market. The company is actively partnering with advanced software companies like PulseAI to develop data-driven software solutions for diabetes, obesity, and weight management, aiming to offer a digital health and wellness service rather than merely being a hardware supplier. This strategic move is intended to capture a greater share of the value chain. The company is on track to enter pivotal clinical trials by summer 2025, targeting EU regulatory approval by the end of 2025, with development spend for 2024 expected to be less than $2 million per quarter.

In its established HbA1c testing business, Trinity Biotech has also introduced a new column and buffer combination that delivers up to four times the number of injections compared to the existing product. This innovation offers greater stability, requires less calibration, and reduces the cost of goods, enhancing the company's competitiveness and enabling it to target segments of the A1C testing market previously inaccessible due to pricing pressures.

Expanding the Diagnostic Horizon: New Growth Verticals

Trinity Biotech is strategically expanding its pipeline through targeted acquisitions and investments in innovative lab-based diagnostic tests. Leveraging its New York State Department of Health (NYSDOH) certified Immco lab, the company gains a competitive advantage from recent FDA rule changes that limit new lab-developed tests (LDTs) for non-certified laboratories. This strategic foresight has led to two key acquisitions:

• epiCaPture Prostate Cancer Test: This breakthrough test utilizes epigenetic analysis to monitor prostate cancer progression, a disease affecting one in eight men in the U.S. with annual diagnosis and treatment costs exceeding $100 billion. The test's ability to potentially reduce unnecessary invasive interventions like prostate biopsies positions Trinity Biotech to enter the high-value oncology market. Revenue generation from this test is anticipated in 2026.
• Metabolomics Diagnostics Preeclampsia Test (PrePsia): Addressing preeclampsia, which impacts up to 5% of U.S. pregnancies, the proprietary PrePsia technology uses mass spectrometry combined with machine learning-powered bioinformatics to predict preterm preeclampsia risk at week 12 of pregnancy. Early detection allows for effective medication, significantly reducing health risks for mothers and babies. Trinity Biotech announced the launch of its FDA-cleared PreClara™ Ratio (sFlt-1/PlGF) biomarker testing service for preeclampsia, planned for Q3 2025 through its New York-based reference laboratory, with regulatory approval from NYSDOH granted in August 2025. This test is expected to be revenue-generating in the second half of 2025.

Additionally, Trinity Biotech has made a 12.5% strategic investment in Novus Diagnostics, which is developing a rapid 15-minute sepsis test. This point-of-care solution aims to provide life-saving information for faster diagnosis and treatment, addressing a critical need given the over $50 billion estimated annual cost of sepsis-related hospitalization in the U.S.

Operational Transformation Driving Financial Resurgence

The company's "comprehensive transformation plan" is aggressively addressing historical inefficiencies to establish a robust profitability infrastructure. This plan encompasses three main pillars:

1. Consolidate and Offshore Manufacturing: Trinity Biotech is significantly reducing complexity and cost by consolidating its manufacturing footprint. The transfer of rapid HIV product manufacturing processes to an offshore partner is underway, with commercial production expected to begin in Q1 2025. This move is anticipated to be gross margin accretive and provide meaningful working capital benefits. The company is also on track to cease main manufacturing activities at its Kansas City site by the end of 2024 and consolidate autoimmune test manufacturing from Buffalo, New York, into its Jamestown, New York, plant by the end of Q1 2025.
2. Optimize Supply Chain: Continuous efforts to identify material saving opportunities in the rapid HIV test supply chain are expected to be in place by the end of Q1 2025. Furthermore, a significant portion of the hemoglobin instrumentation supply chain has been transitioned to lower-cost providers, also expected to be gross margin accretive and provide working capital benefits.
3. Centralize and Offshore Corporate Services: An offshore corporate services site is now live, with additional functions slated for transfer through Q1 2025. This initiative aims to drive significant reductions in SG&A expenditure and create an efficient, scalable platform to support future growth, particularly for the biosensor business.

These initiatives are already yielding tangible results. In Q3 2024, Trinity Biotech reported 3% year-on-year revenue growth to $15.2 million, with its operating loss before restructuring and impairment charges decreasing by 51% to $2.2 million from $4.5 million in Q3 2023. SG&A expenses decreased by $1.2 million to $6.5 million in Q3 2024, primarily due to lower employee remuneration costs. The clinical chemistry portfolio demonstrated robust growth, increasing by almost 80% year-on-year in Q3 2024. While TrinScreen HIV sales currently dilute the overall gross margin of 35% in Q3 2024, improvements are expected incrementally over the next three quarters due to automation and offshore assembly.

Outlook and Financial Guidance: A Path to Profitability

Trinity Biotech has provided clear financial guidance, projecting annualized run-rate revenues of approximately $75 million and annualized run-rate EBITDASO of approximately $20 million by Q2 2025. This guidance is predicated solely on the performance of its existing businesses and the impact of its transformation plan, notably excluding any contribution from the nascent CGM business. The company expects to reach Adjusted EBITDA-positive operations in Q2 2025 and to be meaningfully Adjusted EBITDA-positive and cash flow positive from ongoing operating activities starting Q3 2025 and into the foreseeable future.

Specific to its rapid HIV testing segment, Trinity Biotech reiterated its guidance for 2024 TrinScreen HIV sales of approximately $10 million, with about $3 million expected in Q4 2024. The company anticipates further growth from new tender wins in other African countries in 2025. For the hemoglobin business, while Q3 2024 revenues were lower due to unusual prior-year ordering patterns and a strategic reduction in instrument sales during the rollout of the new column system, the core consumables revenue remains consistent. The new column system, offering enhanced performance and lower costs, is expected to drive growth, particularly in international markets. These operational improvements are expected to drive gross margins above 50% by 2025.

Competitive Landscape and Strategic Positioning

Trinity Biotech operates in a competitive environment where scale often dictates market power. In the CGM market, giants like Abbott and Dexcom hold significant sway. Trinity Biotech's strategy is to differentiate through a highly cost-effective and sustainable solution, aiming to provide a daily cost at least 40% lower than current market leaders. This value proposition is designed to disrupt the market and expand access to CGM technology globally. The company's focus on integrating smartwatch-like physiological data points into an accurate CGM, rather than attempting to make a smartwatch accurately measure glucose, is a strategic technological approach to achieve differentiation.

In the broader diagnostics space, while competitors like Abbott, Roche, Thermo Fisher, and Danaher possess immense resources and diversified portfolios, Trinity Biotech leverages its agility in niche segments. Its NYSDOH certified Immco lab provides a critical competitive advantage, particularly with recent FDA rule changes impacting lab-developed tests. The WHO Prequalification for TrinScreen HIV also serves as a significant barrier to entry for competitors in high-volume screening markets. By enhancing its HbA1c column system, Trinity Biotech aims to improve its competitive offering and capture market share in previously underserved segments. The strategic acquisitions in prostate cancer and preeclampsia diagnostics further diversify its portfolio into high-value areas, leveraging its existing lab infrastructure and technological capabilities in epigenetic analysis, mass spectrometry, and machine learning.

Risks and Mitigation

While the transformation plan is ambitious, management has implemented mitigation strategies. These include assembling a highly skilled and experienced team, carefully selecting reputable outsourcing and supply chain partners, and fostering a strong culture of change execution. The successful resolution of NASDAQ listing deficiencies by September 2025 has also removed a significant overhang, providing a more stable environment for executing its strategic initiatives. However, the highly regulated nature of the industry means that operational changes require significant planning and execution, which can impact timelines. Legal challenges, such as those faced by TrinScreen HIV in Kenya, also present potential risks to revenue streams. The company's cash balance decreased to $2.8 million at the end of Q3 2024, with a working capital outflow, highlighting the importance of achieving projected cash flow positivity from its transformation initiatives.

Conclusion

Trinity Biotech is in the midst of a profound strategic transformation, repositioning itself for sustainable profitability and significant long-term growth. The core investment thesis hinges on the successful execution of its comprehensive operational overhaul, which is already demonstrating tangible improvements in financial performance and is projected to yield meaningful Adjusted EBITDA and cash flow positivity from existing operations by Q3 2025. This financial stabilization, coupled with a bold pivot into the rapidly expanding CGM market with a highly differentiated, cost-effective, and sustainable solution, forms a compelling narrative for investors.

The company's commitment to technological leadership, evident in its AI-native CGM+ platform and innovative lab-based diagnostic acquisitions, is crucial for establishing competitive moats and capturing value in high-growth healthcare segments. While execution risks and competitive pressures remain, Trinity Biotech's clear strategic roadmap, coupled with its proven ability to implement complex operational changes, suggests a company poised for a significant resurgence. The coming quarters will be critical in demonstrating the full financial impact of these initiatives and solidifying its position as an innovative player in the global diagnostics market.