The latest Investing Matters Podcast episode featuring Jeremy Skillington, CEO of Poolbeg Pharma has just been released. Listen here.
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JM has a long track record in start ups. I think he feels he missed out a bit on Silicon Valley and he sees the Agronomic revolution as his chance to advance the new Amazon/Apple/Microsoft industry. He has amassed a fortune and has much of his wealth tied up in global property. He is a bit of an adventurer/philanthropist. You have to speculate to accumulate. By definition that involves risk. Of his three projects that I am aware of BHL(lithium in Arizona), CNR (gold in Nicaragua) Anic looks by gar the best play both geopolitically and by diversification and a lot closer to making money, which in fact it already does by releasing profits of investments and reinvesting. Edison also highlight the sp as being historically low in relation to its NAV , about 5% above current holdings where as it has been trading around 6 times NAV. The fact that it has happened within a year demonstrates 2 things. Firstly it was ludicrously overvalued and secondly how well its companies have performed in such a short space of timed. Admittedly it has still a large cash pile through placings, but that money is and will buy further value. Also it has very wealthy influential partners on board with some of the same investments. I think the risk is well spread and supported
RWT2 - it's definitely healthy to have your views and counter arguments on here. Long may it continue!
Re: Your point that companies would be daft not to opt to work with someone with a proven track record in the design and manufacturing of PF facilities on time and within budget.....I completely agree. Mark Warren has this proven track record. What other companies are you specifically thinking of that also have this record with PF facilities and would be much safer bets?
I have also pointed out that we are not talking 500 million dollar facilities like you suggest. Amyris 1.4 million litre facility, capable of running 5 different lines for 5 different products simultaneously, with downstream processing was around 110-120 million dollars. I am fairly sure (but not 100%) that Mark Warner was involved in the production of that facility. I'll try and seek out whether he was or not.
More to the point, my slightly unconventional opinion generates some debate and was the title of this thread not looking for that?
In the words of Maximus Decimus Meridius "Are you not entertained?"
LL does not need to make any money to benefit the fund. If LL is driven out of business by bigger players offering lower prices then the rest of the portfolio benefits greatly.
Given ANIC has seats on many boards JM will know the issues and the fund currently has enough cash to try to fix issues that the individual companies cannot.
I had hoped for quick big returns but it does look like 5 years to a good return and 10 to a great one.
I find this holding interesting and it's an interesting social study in bias, which I might occasionally point out. My holding is meaningful enough for what I want if the company achieves it's potential.
You say you trust JM and others say this would be reason enough to trust a tiny startup company to build a nigh on half billion dollar facility. You ignore that this would be a massively risky strategy and that it is enormously more likely that much of the work would go to an established player who has a track record in design, build and project management of similar facilities.
You seem to be very vocal and negative on this Company considering your small holding.
I'm happy to put my trust in JM who has a proven track record and is
a very successful wealthy entrepeneur.Its a fund to tuck away and ignore all the noise, come back in 3-5 years and you may regret you did't buy more.This is just
my opinion .
A 1 million pound startup led by a man with a track record of delivering PF facilities? Possibly. How many PF facilities have GEA constructed/overseen?
Or use a facility that already exists and is proven to work?
LL will provide both options.
I also think LL will be focusing on PF facilities which will be different to Upsides cell ag. Amyris plant cost around £110 million for 1.4 million litres capacity and includes downstream processing of molecules.
You might well be right. I'm just a bit more positive about it
Fair enough, they may valued on the same metrics as a construction company then....
Joking aside, I still have my doubts. Upside Foods raised something like $400M to build there multi-million lb throughput facility. You really think they will entrust the design and build to a £1M startup. That'd be a huge project risk and they will not do that. They will go to the likes of a GEA group. If this tech becomes big, then established players like GEA will launch products to address the market need - it is not clever IP and they could do it in short time. They have the skills and experience that customers would look for for building out such high value facilities.
I'm incredibly happy with how ANIC is performing given wider market environments. It's currently 50% of my portfolio. I'm also happy with the shift in focus. There will be IP needed in the production process and as Horti mentions, the scale of facilities needed will be absolutely vast.
I don't think LL will just be producing tanks/equipment. They will build complete, functioning PF facilities. They have identified that fermentation capacity will be a substantial bottleneck globally in the coming years without a substantial increase in capacity. There will be massive demand for the facilities. LL will build complete facilities (the first in the USA I believe) and then companies who want to use them to produce their molecules/proteins etc will compete to lease them out (or maybe another business model? Commissions?). Demand for these facilities will be high given that companies are currently leasing out old pharma facilities etc which are not designed specifically for their purposes and have much lower capacity which decreases margins. Similarly to pharma multiple companies will be able to have contracts simultaneously at the same plant. Eg. Amyris recently began production in their own PF facility which has the capacity to run 5 different lines, producing 5 different molecules simultaneously. That's what I envisage for LLs facilities.
I guess they could also have a consultancy/project management arm to help companies who want to build/own their own facilities. This is what Mark Warren was previously doing I believe. How many tech/r&d startups would have the skills to take on a massive manufacturing project? I think demand would be pretty high for this too.
I also imagine LL will work in harmony with other ANIC portfolio companies as much as is legally possible.
My holding is modest too - only about 1 - 1.5% of overall portfolio. If I get a 10x increase in 10 years it'll be nice but not hugely meaningful. If I get 20x - 50x then it'll start knocking a few years off my retirement. If it does not a lot or even drops to zero, then big whoop.
interesting view RWT2.i wasn't necessarily endorsing the shift, although i appreciate the phrase usually has positive overtones.i approve of the diversification in principle,but share your concerns that it may reflect a realisation that the road to proper commercialisation of cell ag is going be much longer than we would like.hence why i have only a very modest holding.
I don't actually like the shift in that focus!
Jim Mellon is on record as saying he wants to buy into companies with clever and defendable IP hence the focus on cultured meat rather than plant based products. I don't know too much (OK, anything!) about Liberation Labs but from what I understand they plan to manufacture precision fermentation tanks more suited to the needs of our industry, rather than the needs of pharma. I don't think, but may be way off the mark, that this is particularly clever or defendable IP. It's metal bashing and they will be valued as an industrial engineering company supplying to the low margin food sector. I work for an industrial engineering company supplying process equipment mostly to the food sector. We are not millionaires and we have lots of competitors. Margins are wafer thin because there are not many barriers to doing what we do. Take the likes of GEA group who are pretty massive in Europe in this general sector. They have lots of fingers in lots of pies across food and chemicals etc. Their performance has been choppy and certainly not stratospheric. If Liberation Labs amount to much at all, there is no reason to believe they would be valued on metrics any different to the likes of GEA.
hence the shift in focus (at least in part) to the "spades and shovels".
The Edison report reminded me that BlueNalu expected regluatory approval nigh on a year ago now and are still working there way through that process. I think we were also told fish would be easier to get approval (certainly in US) - I don't recall the detail of why, but we were definitely told that. I think this just reinforces this will be a very slow burner with lots of delays. We'll get lots of optimistic statements on the way, but I would treat most of these with a pinch of salt as the rest of the market seems to do anyway. Almost irrespective of what announcement is made either within ANIC or outside, the effect on share is trivial or transient. Go to sleep for 5 years!
How's everybody holding up? I think ANIC has held up well considering, although wouldn't be surprised if we have another leg down. Anyone have any expectations over the winter? I'm hoping to hear news of regulations, at least somewhere in the world.