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I wonder if anyone has thought about the disposal of millions of these contaminated test strips. We have a serious plastic problem now, so what’s it going to be like in the future. Perhaps there will be disposal points as for clinical waste.
JRDC, interesting info on PCR costs. Sir Al has said $15 for bulk buyers so £11.5. He’s said costs would be $2 dollars, but it’s never been explicit was that includes. Same goes for Michael Mina when he talks about cost of tests - are those just the input costs to physically manufacture them. Using the only two figures we know gives a healthy £10 gross margin to cover all other costs. For a high volume product I’d expect them on a per unit basis I’d expect them to be tiny. What’s left?
Packaging and distribution, tiny if you’re shipping in bulk to govts. B2B would incur additional costs for sales and distribution. For DTC you have more cost, but then the price would be higher, up to $30, so there’s an increased margin to play with.
We’ve no idea what the commercials of any profit shares are. We know we shared development costs with Cytiva so they’ll be getting a significant cut. Let’s use 60% as a net figure, so £4 of other costs as above to get £3 for Awacta and Cytiva. Effectively sell them at a tenner to Medusa, they have another £11.50 margin to play with and we have a profit share with them so there’s extra cash there.
It’s pure guesswork, but net profit per unit could be £3+. It then comes down to the volumes, but given demand of 100s of millions per month and as the only saliva LFD we’re currently aware of, this is a multi billion pound opportunity.
As well as helping the planet and keeping shareholders happy, the price will need to be set at a level that regulates demand. If for example, we were to put the POC test out there at £2 a stick, the explosion in orders would be impossible to meet. AS will nail the pricing I’m sure. Will start high then come down through time as we grow more manufacturing capability.
We can't pay for the last lockdown so how on earth would we pay for a second?.......
Sir David King has just said that unless the government sort out a test and trace that actually works this month then failing that he sees a national lock down in September !
Agree it will be difficult to gauge price now. NCYT (only other covid stock in invested in) originally charged around £900 for a 96 test pack - they were one of the first to market so could, recent RNS show volume sales to be around £6 - £6.50 per test with a 60% profit margin (rapid test is essentially the same thing just with different steps), and enough to support a £3 so. Obv you need either hospital lab or one of their portable mobile testing machines to run it. NCYT has one advantage that they design, manufacture and distribute a lot of the tests themselves, esp in the beginning. I'd be interested to see the breakdown of costs for Avacta. They licence out in the affirmers, but manufacturers need their cut, distributers need their cut, cytivia need their cut.
I know Avacta when ready will be looking to sell huge volumes, so even a 10-20% profit margin per test, assuming they sell for something like £8, will be huge if they can push out 10m+ units a week. The more manufacturing partners the better, and if they can push govts for guaranteed orders rather than trying to flog stock then that's even better. Even if a vaccine came out tomorrow, i wouldn't be taking it, they'll use the old and clinically vulnerable as the guinea pigs, testing will be needed for years, so even if our test isn't ready till the winter there will still be huge demand.
I'm all for helping the planet BUT they didn't risk any of their hard earned cash to develop the Awacta products WE DID.
Interesting thst the DNANudge telecom posted earlier on this BB
https://www.bloomberg.com/news/audio/2020-08-07/dnanudge-founder-on-device-that-finds-covid-in-90-minutes
will be supplied at cost. To scale up DNANudge may make a loss. No commercial acumen.
Is the test cost for the rapid tests from Quidel Corporation, Becton Dickinson, Sona and the PCR tests from NCYT, Thermo Fischer, Roche known?
How many total tests (from all sources) would a $75B budget (Rockefeller Report) provide to the US? Someone has worked this out to get to this figure!
Is there a widespread disparity in the cost structure for the tests provided by the Companies listed above? I recall reading that the US Companies were charging a very high unit test cost for the PCR tests. Cost to me is the difference between US and UK products.
Lets hope Awacta get the price point correct. Its a delicate balance between helping the planet and keeping shareholders happy.
Test, test, test
$1 to $2 a test......
Surely not ?????
Apologies typos....
CD,
Suggest the Medusa link illustrates a shrewdness on the part of the Avacta team,I’d suggest, not normally seen in Biotech to take commercial advantage . Though these are strange times.
More relevant is the now certainty of a ‘good test’, and potentially significant revenues.
If these near the level likely, then the company valuation will head upwards to match.
At up to. A conservative 15xmultiple for Biotech,this will be impactful on the valuation.
MylesMcN prediction sees a takeover, of go further and suggest several big pharma AQ teams will have them on the radar. Could be before end 20 ,subject to pressures from COVID demands.
Serendipity rules ?
GLA
Once developed, the PR will take care of itself. Matt Handjob will be all over it and I wouldn't be surprised to see Boris at a lecturn telling everyone about it. Same goes for Trump due to the great American product we're developing.
What I mean by the software model is that it will be easy for Boohoo to meet various countries requirements... for example NA wants to tract every test taken.. simple to use a code, upload to website with result etc... Not all competitors in the rapid test space will be able to meet these requirements. This is the added value that our parnership brings on a global scale... Getttt innnnnn...
A lot of govts look to the FDA and their approvals. Mina is only lobbying in the states so it’ll have little impact if the FDA hold firm. Looks like he’s realised that which is why he’s now trying to get individual states to go their own way. Bill Gates agrees with him and might have more global reach, but in this interview he just sounds weary from trying to best that drum in the US....
https://www.wired.com/story/bill-gates-on-covid-most-us-tests-are-completely-garbage/?utm_source=twitter&utm_medium=social&utm_campaign=onsite-share&utm_brand=wired&utm_social-type=earned
Chengdo4 I agree and what people miss is that BooHoo are really a software company( some will know what I mean), this is the hidden gold in the partnership... OK they have the supply chain model nailed but in reality it's the software model thats supports the supply chain that's the real value..
Pl75 it's not the FDA or the fact that there aware.. its Government strategies across the globe that need to move to the rapid testing way of thinking... it needs more dialogue and airtime, the common man on the street has only heard of vaccines vacancies & vacancies but actually it should be rapid testing, rapid testing, rapid testing... let's see the shift and then this share and others in this space will be the winners....
Nice one Phantom, thanks for sharing. A swell in the change of thinking would be a massive game changer. It will be very interesting to see if this narrative can bubble it's way up over the coming days.. then the talk of high valuations for Avacta will have real substance for me. GLA... watch this space...
A good article on this in the current issue of Science
https://science.sciencemag.org/content/369/6504/608
An extract below giving an idea of the number of tests needed in US
'Antigen tests, which immobilize antibodies on a test strip, promise an even greater speedup. Those antibodies detect viral proteins in saliva or a nasal swab. Such tests cost as little as $1 to $2 each, give a yes/no readout within minutes, much like a pregnancy test, and are already used to detect influenza, HIV, and other viruses. Two companies—Quidel Corporation and Becton, Dickinson and Company (BD)—have received emergency use authorization from the U.S. Food and Drug Administration to sell antigen tests for SARS-CoV-2. Other companies have similar tests in the works.
Because antigen tests don't amplify viral material but simply detect what is present in the sample, they are less accurate than PCR. Some antigen tests correctly detect only one-half to three-quarters of infections. But they could still be a valuable health tool if performed often enough; few infected people would be missed in multiple rounds of tests. And people who receive a positive antigen test could be isolated and retested with a PCR test to confirm the result.
Among the hurdles facing widespread, repeat screening is the scarcity of such tests. Quidel and BD together manufacture about 3 million antigen tests per week. But a national screening strategy would likely require 25 million fast tests or more, says Jonathan Quick, who heads pandemic response for the Rockefeller Foundation. On 16 July, the foundation released a national COVID-19 testing plan calling on the federal government to spend $75 billion on providing 30 million screening and diagnostic tests per week.
Quick says companies are reluctant to ramp up production dramatically if they are unsure of the market for the products. One solution, he adds, could be a promise by the federal government to buy tens of millions of tests, much as it has done with vaccine doses. In one such effort, the governors of six U.S. states announced this week they are banding together to ask Quidel and BD for a total of 3 million tests.'
5 minute summary of of the video from Dr Mina Phd
Good post Matt, interesting video, let's hope the narrative with the powers that be shifts towards the rapid tests approach.. been topping up since April where I was lucky enough to buy at 53p .. GLA will be holding...
https://www.rapidtests.org/
Preaching to the converted here, but if you are new to Avacta, this website will help you understand why rapid daily cheap tests are key to controlling the spread of the virus. After the last week with competitor issues, our product is in pole position to be THE TEST to solve this global pandemic.
Feel free to spread the word, and follow professor Michael Mina's work on Twitter, and watch this latest YouTube video here: https://youtu.be/3seIAs-73G8