Translation: Original published in Finnish on 06/25/2026 at 08:00 am EEST

After some difficulties, Bioretec, a company that develops and commercializes orthopedic implants, has seen the first concrete signs of growth from its absorbable metallic RemeOs Trauma Screw. The company's innovative product portfolio and first-mover advantage in the US bring significant potential for value creation if early growth signals continue onwards from this year 2026. On the other hand, the risk of capital loss in the stock is high due to commercial uncertainties and the adequacy of financing if the company falls short of its growth targets. We reiterate our Accumulate recommendation and raise the target price to EUR 0.026 (was 0.021) based on our updated assessment of the stock's risk level (WACC).

Investment case is based on successful commercialization and breakthrough of the new RemeOs product line

The advantage of Bioretec's bioresorbable products is that they are dissolved in the body after surgery, eliminating the need for removal surgery, which causes complications and costs. The new and innovative RemeOs product line, made from a magnesium alloy, has broader application possibilities than the previous Activa product line due to its superior properties. The FDA approval received in spring 2023 and the CE mark obtained in early 2025 enabled the sale of the RemeOsTrauma Screw in the key markets of the US and Europe. In the coming years, the expansion of product indications, geographical expansion, and the launch of new RemeOs products will form a long-term growth path. Its successful execution is not only a great opportunity for the company but also a demanding challenge that requires numerous successes.

Growth has been delayed, but early signs are promising

Revenue is still at a low level and even decreased in 2025 as commercialization struggled. The downgraded financial targets, in addition to operational difficulties, weakened sentiment. However, we believe the company has responded to the difficulties of recent years with the right actions, and recent signals suggest that growth is starting. However, the signs are still preliminary and growth is uncertain.

In our estimates, we expect the trauma screw to initially generate moderate sales growth in the main markets of the US and Europe. Revenue will gradually grow to 11.1 MEUR by 2028 as the use of the trauma screw expands. New product launches, such as RemeOs DrillPin, will also support growth towards the end of the current strategy period in 2026–28. In our estimates, earnings will scale with the leverage provided by a high sales margin and turn positive in 2030. We estimate that the cash position, strengthened by the share issue in spring 2026, will be sufficient until Q3’27, meaning the company will need additional funding before an earnings turnaround. Success in growth is also paramount from the perspective of securing future financing.

Long-term potential outweighs risks

The Bioretec stock carries binary risk as an investment, as a failure to commercialize the new technology will likely result in a permanent loss of capital. To counterbalance the risk, the long-term value creation potential is significant, and technology-related risk has already been partially mitigated.  Due to forecasting uncertainties, our estimated fair value range for the share is wide (EUR 0.020–0.034). Our estimate is based on the DCF model and EV/S ratios. In our optimistic high-growth scenario, the earnings potential is significant (EUR ~0.07/share). The possibility of an acquisition offer also provides a positive option for investors.

Overall, we believe the risk/reward ratio warrants a positive recommendation. However, a good expected return for the stock requires a continuation of the early growth signals from early 2026 in the short term. The valuation levels of Bioretecand its sector peers have fallen sharply recently, which partly supports our positive investment view.