Gordon Stein, CFO of CleanTech Lithium, explains why CTL acquired the 23 Laguna Verde licenses. Watch the video here.
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Thanks for the comments, PL75. In some ways I agree, but I think the good thing with having a model is that you can update it as more info comes in to see how the new (hopefully higher) share price stacks up against the updated potential. Right now I’m very comfortable, but at £3? £5? £10? And absolutely agree with you on the chance of success. It’s meaningless to take a range for a probability - but you can take an average of multiple informed guesses.
Cytiva is manufacturing with Avacta retaining all commercial rights, hence is included in cost of manufacturing in my model, which was previously stated as ~£2/$2 per test in Avacta presentation - lets assume this input includes cost of development. Am I missing anything?
Probability rapid covid-19 test is successfully released to mass demand: 99%
- Average price per test sold (bearing in mind bulk orders may be heavily discounted): £12.50
- Cost of manufacturing per test: £2.50
- Other costs per test e.g. distribution, admin: £5.00
- Avacta % of profit share with Medusa19: 60%
- Number of months of mass demand: 6
- Average # sold per month of mass demand: 20 million
No math application, simply off the top of my head.
Holy crap D9Ber1.... ‘Just for my understanding, does AVACTA's treatment work by telling you if you currently have covid-19 or had it in the past?’
https://avacta.com/investors/documents-presentations/
https://webcasting.brrmedia.co.uk/broadcast/5e985bc231da814c9fc6a477
Probability rapid covid-19 test is successfully released to mass demand: 50%
- Average price per test sold (bearing in mind bulk orders may be heavily discounted): £15
- Cost of manufacturing per test: £6
- Other costs per test e.g. distribution, admin: £2
- Avacta % of profit share with Medusa19: 35%
- Number of months of mass demand: 9
- Average # sold per month of mass demand: 150m
Interested to see the final summary, CautiousOptimitist - thx for doing this.
The biggest hurdle is no 1 in your list - probability of a successful release. Life is full of surprises - good and bad. It was Macmillan who was once asked by a reporter "What, Prime Minister, do you fear most in the future?" (or similar words) - to which he replied "Events dear boy, events".
I have every hope and expectation for my Avacta investment of course, and every confidence, and I speak as a ex-scientist & medic. But there are persisting doubts of course until we arrive! I worry for folk who talk about early retirement, paying off mortgages, Ferraris and lambo's etc, perhaps not so much for them as many speak in just I think, but for others they may well influence.
Roll on Tuesday, but meantime enjoy a relaxing w/e peeps!
https://en.wikipedia.org/wiki/Groupthink
Be aware. The world needs more wares.
Although Boris said stay alert, so maybe we need more lerts.
Interesting post Cautiousoptomist, great idea!!! Will read your post later with interest. Are we a game changer in our field with Covid-19? If no one else doing what were doing and we can get out to market quickly, surely this will drive the current SP by many multiples? I would have thought towards the £10 mark with distribution channels in place worldwide. Just for my understanding, does AVACTA's treatment work by telling you if you currently have covid-19 or had it in the past? This is going to be very powerful unlocking the crisis, a great example at airports, telling airlines if pax can fly, no need for quarantines and can get aviation moving worldwide.
PS, I’d imagine Cytiva are going to be pretty upset if they’re not getting anything.
The only important number is the first one and it’s not a probability, it’s binary, we’ll have something that will work or we won’t. If it works, and Sir Al seems confident, then I’ll stick with my fiver to a tenner forecast for starters
Here we go! These are the inputs we need:
- Probability rapid covid-19 test is successfully released to mass demand: 95% +
- Average price per test sold (bearing in mind bulk orders may be heavily discounted): £28
- Cost of manufacturing per test: £3
- Other costs per test e.g. distribution, admin: £2
- Avacta % of profit share with Medusa19: 50%
- Number of months of mass demand: 20
- Average # sold per month of mass demand: NAFC! Quite a few!!
Would be interested to see your calculations but here's my inputs:
- Probability rapid covid-19 test is successfully released to mass demand: 80%
- Average price per test sold (bearing in mind bulk orders may be heavily discounted): £15
- Cost of manufacturing per test: £2
- Other costs per test e.g. distribution, admin: £2
- Avacta % of profit share with Medusa19: 60%
- Number of months of mass demand: 4
- Average # sold per month of mass demand: 200m
For anyone wondering about where the share price could be going over the longer term, whether to hold or jump off while the going is fair, why don’t we run a simple probabilistic model of profit for just the rapid Covid-19 LFTs? As PersonOfInterest said elsewhere this morning in a great post, it is more useful to relate share price to future earnings than past share price.
Just to say, I know there are a lot of other highly valuable strands of the business, but this single near-term revenue stream alone could be transformational.
I’ll do the hard work and report back, and all I want is your estimates (single number or a range) for each of the below inputs. The idea is to sample the “wisdom of crowds”. (God help us!) I have got my own estimated ranges for each, but I don’t want to anchor you by putting them up right away.
Here we go! These are the inputs we need:
- Probability rapid covid-19 test is successfully released to mass demand:
- Average price per test sold (bearing in mind bulk orders may be heavily discounted):
- Cost of manufacturing per test:
- Other costs per test e.g. distribution, admin:
- Avacta % of profit share with Medusa19:
- Number of months of mass demand:
- Average # sold per month of mass demand:
I’ll come back after lunch to see what we come up with and post our results in the afternoon sometime. I don’t know how this is going to go, so if no one posts anything/anything sensible I’ll put my results up anyway. ;)