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Thats my point Oaks, I don't know, i can't possibly, and I won't waste time guessing on an event that hasn't happened and may not ever.
And the whole point is, say we do secure our £2m per month for 24 months. great (I mean that would be GREAT!) but it won't happen in a vacuum, the market will price in potential increase in sales beyond the 2m per month, and then the market will also knock the SP every month as the 24 months gets ticked off in the calendar and the income will ever more shortly stop, but on the other hand the AVA trial will be nearer to completion and so the market expectation on that will affect the SP. There may be more tie ups, Deepverge might get some sales. etc etc
All or none of the above might happen
Its impossible ever, to value the company in question at any given time.
All I care about is trying to buy a stock and then sell it above what I paid for it
I am really not kidding when I say I don't care about Avacta the company because I don't know what's going on with it. I can't react to a bad RNS, because it will be too late.
I have to find another method at which to try and profit from companies that offer potentially good reward and the see if the risk is small enough to justify the risk.
Valuation is arbitrary. The SP isn't. it is what it is, every second of the trading day.
And for me therein lies the solution.
Wyndrum, I'm failing to follow your argument here. You seem to be suggesting that a company that has a demonstrably useful technology, that other companies are willing to license, has a value of zero because those particular applications my ultimately fail from a commercial point of view:
"Well, yes I guess it does, because it could fail and if it does what is the SP worth then?"
The value of a company is derived from its assets (Avacta's IPR in this case) and the potential rewards these may bring, and this is discounted by applying a set of risks. It isn't some binary outcome of failing until it succeeds. The share price is the valuation of the company, not some separate measurement.
No, he said it was the breakeven volume - I can’t remember the profit he postulated off the top of my head.
If we are breaking even I value us higher than the current SP then we can discount any placing and so we have a bigger upside
Out of interest what is your personal valuation for Avacta as it stands today?
Ditto we secure HUE and say we are able to generate £2M gross a month for next 24 months ?
Ndn, that's probably because it would cover the current share price assuming a profit of £1 per test.
2m happens to be McNumpty’s breakeven volume too
I think GJ the market "valued" AVCT at around 40p prior to the pandemic. So all things being equal the LFT income is valued today, at about 70p, but there have been developments since with the AVA600 trial starting, the cash raise and the the LFT for sale as well as more tie ups, so what's the balance now?
I would suggest that LFT income has been discounted heavily since, because of the previous delays and non-events.
I think when you start to have this type of discussion it becomes impossible to value the company. As you rightly say do the other strands of the business remain at zero value until completely de-risked. Well, yes I guess it does, because it could fail and if it does what is the SP worth then?
You take a coherent, different view, so which one of us is right? It becomes subjective and based on opinion rather than being objective.
The best we can say is Objectively if all goes well and certain milestones are achieved then the SP will rocket but if they don't, it wont.
Risk reward is a different conversation entirely but it is risk reward that influences and drives the SP and again is open to a wide set of opinions but theoretically the market, through supply & demand, will come to a conclusion. But that conclusion will vary from day to day depending on what the majority feel about risk & reward at any given time, and not just about AVCT. Other macro influences will affect the R/ R relationship
AVCT are still the same company doing the same thing that they were 3 months ago yet the SP has collapsed. So whats changed?
This is why its not only impossible to "value" a company at any given time but futile.
If you want to take a long term view then by all means give me a timeline and a share price and try and justify that objectively.
For sure everything comes with inherent risks, and this is why shares contain potential upside. So far the evidence suggests things are positive. Their technology is sound, they have a strong record of building partnerships and we are seeing these coming to fruition, so from a sentiment point of view I am confident.
As for the £2m LFT's, this was a number I used to illustrate what would be required in terms of sales to support the current share price, placing *zero* value on the rest of the business. If you were to take Avacta's substantial other programmes into account, then the required number of LFT sales is even lower, and anything lower than that across 28 UK/EU countries is a very modest number of sales required indeed.
Now, do you put some value on the rest of Avacta's business, or does it remain at zero until it is completely derisked?
I do GJ a bit yes, know how to value a company.
What evidence do you have that 2m sales per month LFT are is being achieved? What is the profit margin? What if (for whatever reason) HUA is not granted?
How do you know cash burn is still at £2m per month?
How long will testing last at the rate of selling a minimum of 2m tests per month? If it has a shelf life of say 2 further years that affects the valuation, does it not?
The programs AVCT are developing will be transformational if they are successful. What objective evidence do you have so far on the AVA600k trial?
It seems to me you are valuing AVCT based on assumptions that there is currently no objective way of calibrating.
You are hoping that it will all turn out ok in a market where small Bio-pharmas have a poor track record of success but the ones that do crack it can do extremely well. Lets hop that AVCT are one of the successful ones.
(The main point of course is that the SP never matches the "valuation" of the company, it measures something completely different and that's what I focus on.)
Suspect Institutional Investors now currently see limited downside here but they obviously love the ‘Hot Retail ‘ stocks knowing how they get driven up on sentiment and not fundamentals, hence the likes of Jupiter eyeing an opportunity. Anyway they have more immediate concerns to worry about ...the Chinese Evergrande issue ( $300 billion of debt) teetering on collapse could just give everyone a cold shower !
Sharestock - you’ve made your point. Credit given for saying the same thing many times, in a different way.
Seriously - why go on? Your view is as valid as anyone else’s, but we’ve all heard it now. Childish name calling like McNumpty is getting tired. Uncalled for.
The market cap is only 280m right now, lol! Conservatively speaking, that is a forward looking profit of just 30m. Hmm, let me think, could avacta possibly reach that? That would be 2m per month in LFT sales, without *any* value attributed to all the other programmes avacta are pursuing. It would be covered by a couple of milestone payment in fact.
Do you understand how to value a company?
It's hilarious that so many think that a company like Jupiter employ people to post on this site to protect their short position.
They are not in the least concerned about chat on shares sites, or anything else.
Neut, I have thought for some time (and posted) that one of the few remaining opportunities for AVCT LFT was for travel and that getting any sort of that pie should will make all the angst worthwhile.
Some tests will be chosen (I am guessing AVCT will not get it as a monopoly even assuming its one of them) price will play a big part I am sure, but it always comes back to the fundamental question: Will it be AVCT?
I agree wholeheartedly that the opportunity remains but I find it hard to make the leap of faith that it will be AVCT.
I will be as delighted as anyone if it turns out to be AVCT but so many opportunities seem to have been available and for reasons we may never discover, its not been AVCT yet , but fingers crossed.
Just wanted to get rid of the Ndn header.
Should be a good week ahead hopefully.
I know it was discussed s few days ago (AgentB IRRC) but it is disappointing its not classed as a rapid test, nor does it come up as qualifying under the EU common list of rapid antigen tests
We’re on here, but I couldn’t see any pro/self usage descriptor
The gov has just announced that the LFT can be used for travel.
But the important caveats is that they can not use the NHS free test.
This in itself, has created and opened up the market for Avacta.
I would have agreed with some of your statements, but this is developing into avactas favour with HUA imminent (whispered) huge capacity uplifted and a private market just created for Avacta to slip in.
This may be out of date but links to the govt docs
The one on self-test still states this:
A device (test) intended by the manufacturer to be able to be used by lay persons in a home environment. (Source In vitro Diagnostic Device Directive 98/79/EC Article 1).
The manufacturer of the self-test must demonstrate that they hold evidence to support the intended use as stated in their Instructions for use (IFU). For example if the self-test may be used by a lay person to help another lay person take the test, they must have evidence to support this use scenario.
UK MDR 2002 (as amended) requires self-tests to be reviewed by a third-party Approved Body before they can be UKCA marked. CE marked self-tests are reviewed by an EU Notified Body.“
It foes seem relatively trivial to accomplish - particularly as the Innova one has been out for so long, it would be strange if Joe Public couldn’t grasp how to use it by now
If had been granted it would be on some Govt website somewhere or other, wouldn’t it?
So it's been 3 months since:
'AVACTA Business Update and Q&A
21st Jun 2021 at 10:00am BST
Q8...When can investors expect an update on Medusa19 ?'
Is it feasible HUA may have already been granted and news withheld by Medusa until production has been geared up/stock levels sorted at one or more locations ready for launch...??
Or is everyone if the opinion the latter has already taken place and they're just twiddling their thumbs waiting for HUA...?
All a bit chicken and egg isn't it?
Playing golf ;)
Where is Robbo...???
Great stuff Templar, no wonder them Jupiter boys are working such long shifts to try and spread doubt to get us to part with our shares so they close their short before the positive updates arrive.
Best of British all…
So hopefully Home Use Approval (HUA) news this week.