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AS stated clearly in the webinar they are still engaged in Porton Down process. Given numerous tests have passed PD, but we have struggled with their (flawed) “futility testing” (like Mologic), the fact we are still engaged with the process suggests to me their is still a high level of interest on behalf of the Government, who’s states objectives remain in procuring a British based test and moving to a “test to release” system on a national level.
Ndn, you clearly weren't listening. He said they continue to test negatives to drive thr decimal point. It's only negatives that they lack for the new govt requirements. Govt deal is still very much on the cards.
Ndn - in the April webinar there was talk of other Clinical Validation ongoing in the UK. Maybe still ongoing, maybe it has been suspended, or maybe completed and not yet published, so as not to muddy the waters - who knows? While Al didn’t mention it yesterday, he did talk about further work on negative samples to get a better handle on specificity.
And I agree that a detailed timeline is not possible, but it’s clear what the direction of travel is, and that self-testing certification will be a major milestone and piece of the commercialisation puzzle, and (imv) a lower risk milestone than any UK gov orders.
Bump
Great questions. Obviously I don’t have all the answers.
But I’d suggest that a lot of these are a question of timing and short term obstacles. They’ve told us that further CV was ongoing, and that they’re working towards the self test cert.
Personally I think since the test is undoubtedly top performing and will pass self test CE eventually, and the uk government quality protocols. But at this point who would dare to give a timeline and blow by blow account of how we get there?
Your other questions seem to be around test performance as a moat and barrier to competitors. Again, I don’t think it’s helpful to get lost in the detail here. There will be customers who value quality whether it’s mandated or not, and they only need to make a small part of the market to hoover up all the AffiDx.
The way I imagine things unfolding with the LFT:
- Over the next few weeks, pro-use test sales and orders building steadily. Building a base that continues over several years. Major value, but potentially more of a slow burn than a hard inflection point, punctuated by a few major customers eg airlines. APAC customers valuing quality an intriguing proposition though, along with “routes into FDA”.
- Within a few weeks, to a few months, self-test CE Mark landing. High probability, major value inflection point, but the main uncertainty being around timeline. High profile roll out with Medusa19 (and others?). Again, steady build up, but to a larger revenue stream, recurring over multiple years. US could be a big expansion target market?
- Within a couple months, UK government orders landing. Low to moderate probability, major value inflection point.
- Getting paid by Uk gov, at some point. Huge value inflection potential, low probability, minor miracle. Think I saw a vision of the cheque on a slice of toast.
Apologies, quite long-winded in the end, but if BBN, Myles and Joe are taking time off, some of us have to have a crack at it, right? ;)
Let’s hope tomorrow is a better day.
Just listened to today’s webinar again, after a pretty bruising day. Not gonna lie, I was initially underwhelmed by the RNS and lack of orders, but on reflection, see that this not arriving today is only disappointing given we all were hoping for some big reveal, but changes nothing. I agree with PSB and others about the LFT supply capacity being the buried lead from today. On demand, I believe “we’ll sell all we can make” was originally predicated on the idea of the UK government being a sole, hungry customer with a demand for 100m/month. Delays there continue, but the overall picture on Plan B is now more nuanced.
On manufacturing capacity:
- ABDX (near Wetherby) and GAD (near Cambridge) are still onboard, along with potential for other undisclosed UK manufacturers (presumably ODX, maybe the likes of Medusa/Novacyte), for minimum capacity of 5mln, up to 30mln/month if the gov equipment comes on stream.
- Overseas capacity of up to 1mln/day available, to be brought on-stream as demand arises. TT will be undertaken after necessary due diligence, etc, which says they are confident of said demand.
- Everything is being done in a step-wise, methodical way to be ready to respond to massive demand, while controlling risks. They can’t just fire up the machines and start making 10s of millions of LFTs at sole risk, or they’d go bankrupt.
- BBI are out, because they can’t meet time/cost of goods targets. Or maybe their new owner changed the dynamics? Either way, it’s a shame but looks to me like a sound decision to protect margins while being able to deliver the test at a competitive price.
Demand & sales:
- With the current “professional-use only” CE mark, Avacta can sell to governments and large commercial customers.
- Distributor deal with Calibre targets larger numbers of smaller volume customers for professional-use tests.
- UK gov route hasn’t gone away (as Al said, they’re “still engaged with” this procurement process), but in my view it is unlikely to deliver anything for at least two months, basically until the Innova EUA expires, and then it is becoming more uncertain. However, if PHE are still working with them on testing against variants, obviously the DHSC hasn’t given up on them yet. But there’s nothing they can announce yet, hence investor disappointment today. If the DHSC stops buying tests, they may yet do Avacta a big favour by policing competitors to keep poor-performing cheap tests off the UK market.
- I am confident that under existing CE Mark will come, but it takes time to build those relationships, close those deals and create large volume repeat customers. I’d expect these to come in over the next few weeks and comfortably support the low-side value cases.
- The consumer self-testing CE Mark will open up a massive additional market and expansion of demand, also launching Medusa into action. Al made it clear several times that this is a key piece of the puzzle.
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