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today's rsn content was poorly constructed (imo only). all that was required today was the name of the long awaited 'amazing' partner. the sp would have taken-off on just that news.
it is widely understood that company is not expected to release business sensitive information. however, releasing half-****ed, incomplete numbers, just went to further muddy the water.
i can see the us product and pricing to be totally different to eroxon. haleon plc will, independently have its own take on capturing the us market.
"futura will provide ongoing technical support...." only.
Unfortunately these days the market is controlled by the knuckle scrapers aided and abetted by the MMs. They cannot spell investing,never mind understand the meaning.
Hi, here is something I thought you might find interesting: - https://uk.investing.com/news/stock-market-news/haleon-an-excellent-choice-for-futuras-us-ambitions-says-broker-3085222
Again, shockin. No sooner do media outlets say " FUM surges and soars on US deal", that surge and soar has sunk. Dead cat bounce for today needed please lol.
All the AIM shares moves on the MM or some players whim. Almost impossible to do proper trading. They move by large amount without any news. Then mm's widens the spread to stop any one trading.
*** packed calculatio: well if us is 51% of world market, 2*£64m is nearly £128m. a p/e of 10 would mean a market cap of over £1bn which is 8 or 9 time’s current price. not too shabby!
“The profits of the Joint Collaboration will be shared 50:50 between Futura and Co-High.”
That’s a JV, todays news is a licensing deal, the two are as comparable a cat and donkey.
Drug licensing deals are fairly common on NASDAQ. Good royalty rates are 20%+ and are rare. Low double digits are probably most common. However, plenty of mid to high single digit deals are done.
This announcement is very vague, they’ve only given away one useful fact which is the up front of £4m. The milestone range means nothing on its own without knowing what the conditions are.
IMO they’ve been vague because it prevents the market from accurately valuing the business & stops PI’s from understanding the downsides of the deal.
Had they said the £5-45m of potential milestones were contingent on $50-250m of sales being achieved in the 5 years post launch & also disclosed a royalty rate of 10% then most people could have worked out that the top end of their estimates would result in $25m royalties + £45m milestones.
As it is, the everyone can still speculate and dream of mega sales figures. Until they release forecasts I can’t see this going anywhere.
Disappointing fall back of SP.
Interesting that press release refers only to MED3000 and not Eroxon. Hopefully lessons have been learnt from European launch and product will be better branded, packaged and more realistically priced to attract larger market of recreational users.
Very disappointing share price for such major RNS had a chance to buy some more though
The top 5 shareholders of Futura Medical as of 30 June 2023 are:
Lombard Odier Asset Management (Europe) Limited (28.50%)
T Adams (6.89%)
WT Lamb Investments Limited (4.51%)
RA Lamb (3.28%)
Chelverton Asset Management (3.01%)
The general public owns 21% of the company's shares.
Sales are vanity and profit is sanity right?
The income of a % of all sales is perfect. Working at a 10% (ish) margin would be amazing if we had all of the production and marketing costs.
So cutting all of this out and passing these costs onto a company who have much bigger buying power than a small company would have.
So would we want 100m sales and a risk of not converting that or a guaranteed profit figure with minimal head offices costs who mainly see upside upon share price increases.
Seems to me all incentives and risk management are aligned, and yeah the ultimate realisation of this all will be either a sale or significant dividends.
Subbing everything out for a definite profit margin is great news.
More of these deals please!! The share price will follow
FUM have kept the royalties a secret because they say it's commericially senstive information as they are doing other deals.
But if you look at the RNS from 4 March 2021 they say this
Commercial Highlights:
· Co-High is responsible for all regional MED3000 development and regulatory costs, which are estimated to be up to £4 million.
· The profits of the Joint Collaboration will be shared 50:50 between Futura and Co-High.
https://www.lse.co.uk/rns/FUM/futura-announces-investment-joint-collaboration-c34mimt2fuhoi0k.html
So cannot believe that they would suddenly drop the % to single figures on other deals - imo.
But I guess we won't really know until we are start seeing sales figures etc etc. They are releasing interim figures in Sept, which they've already indcated it should be over 1.5m pounds. Which, for me, means we won't really see how it's going until April 2024 when they release final year figures
Odey has a 29% stake, and it is likely that they are offloading their shares, which is evident from the large buys compared to the background selling.
Given the nature of FUM’s business model the only way forward was to license the product.Do you really expect the company to disclose their royalty rate,given they will be negotiating with other distributors.
FUM will have very modest calls on its income going forward,given that all the research and development costs have been incurred.
I have a recollection that many years ago JB commented that the long term strategy was to sell the company. I think today’s news make that more likely.
The fact they haven't disclosed the royalty rate tells you all you need to know. Likely mid to high single digits as it removes a lot of the financial risk from FUM, however it also removes the reward / upside of the worlds biggest market and I don't think £4m up front & undisclosed milestones make up for it.
Plugging in the following; a royalty rate of 7.5%, USD/GBP of FX of 1.3, a discount rate of 8% & annual sales averaging $100m starting from 2025 and continuing for 8 years gives you a present value of £28m. Are they really going to average those kind of sales figures?
It's classic AIM in my opinion, flattering to deceive.
Bottom_feeder - I suspect you are right that Haleon has the better deal but that doesn't mean I have to agree with you as regards the future for us as shareholders in Futura. We've seen that slowly slowly we have made good progress with our link with Coopers in Europe and there is nothing at this stage to suggest otherwise when it comes to the US.
It's difficult to judge what Lombrad Odier's long-term ambitions are with FUM - to some extent that is holding the shareprice back - but once we have some financial data beyond just these upfront payments, as good as they are, we'll not really see the shareprice take off.
I'm pointing out the fact that there is little info about actual 'Royalty' conditions.
Having negotiated Royalites for IPR etc myself (yes Bandit1 I actually do know about this stuff!) the Royalties can be exceedling small.
Also, the Royalty conditions can haave a marked effect on the actual incom revenue. Such as whether royalty percentage is paid on gross sale or net after Seller removes ALL overheads.
Such conditions can render Royalt payments almost non-existent.
So, until an RNS comes out as to 'whaat' the Royalty' payment terms are AND we get a figure of the sales etc, we don't have a clue as to what the future income stream actually is at all.
So, yes the RNS doesn't give us much clue. If FUM is only getting 5% of NET sales revenue (after all costs etc) then that won't actually be that much.
Haleon definitely has the better deal.... unless FUM release more detailed information.
Bandit1: You're talking utter rubbish and trying to troll my comment. It's clear from your repvious posts that you do nothing more than htpe up the share and trash anyone who has an opposing viewpoint. So from now on its best everyone just filters you, as I am now doing.
By the way I haven't sold - yet. Just goes to show you are nothing more than a TRoll :-)
By all meaans filter me if my comments offend you soooooo much.
Am I right in saying that they are paying for advertising cost as well?
Lombard
Bottom-picker. As Anthony pointed out you clearly have difficulty reading the detail provided in the RNS and ‘conveniently’ make a post which makes no sense to anyone who understands the RNS. I suspect that you sold this morning on the spike and no doubt will buy back in as it drops. Just to be clear I have no problem with people trading this who don’t attempt to mislead but most like me will have issues with people who post nonsense in the hope that others may sell to assist their agenda. Which one are you I wonder?
The numbers published are only milestone payments. On top of these they will also receive royalty payments based on sales Amount not disclosed jet.
The important detail as just noted is that FUM get a royalty payment on every sale.That is how the income will be generated.I must say that I’m very disappointed with todays price movement.Massive profit taking.That’s AIM for you! I am sure that there will be an interview with Proactive Investor later today.Might give more confidence and consolidate the share price at a higher level.
@bottom read the RNS again.
They are being given £4millon upfront (cash worries gone) ROYALTY payments on EVERY sale PLUS performance milestones as you have mentioned below.
As a long term investor, and having recently topped up with the previous drop, I haave to say that I'm a little disappointed with the Haleon deal to be honest.
Looking at the Royalty figures quoted, it is unclear what is meant by the term ".... over several years....". THat could be anyting between 2...5+ years.
Also, the proposed Royalty income is actually very small given all the hype about how big the market could be and how FUM have a 'singular' OTC product.
The figures of between £5M-£45M over several years could mean 'maximium' royalties of £2.5M to £22M+ if we ssume onyl 2 years.
But the explicit use of the term ".... several years...." appears to have bene 'carefully' cohsoen and I suspect means 3+years.
So FUM could really only be looking at between a 'Maximum' £12M-£15M+ per year. Which is quite frankly small change given the potential market.
I have to say thhat I think Haleon have defontivly got the better part of the deal.
So I don't see how this is going to push up FUM SP to any great degree. Certainly seems difficult to see how it can be pushed above £1 in any short-term period (1-2 years).
But you neveer know, I could be wrong. Anyone have any idea how an income stream of £12-£15m per annum will have an effect on FUM' PERatio etc ?
I do'nt see a dividend out of this as some are hoping. (imho)