The latest Investing Matters Podcast episode featuring Jeremy Skillington, CEO of Poolbeg Pharma has just been released. Listen here.
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Risk wise if we had been using aptamers or antibodies in the LFT I would have been cautious even at this stage. But this is quite a different situation with the Spanish data feeling like simply a prelude to gold standard confirmation that was always likely given the quality of affimers, the exquisite Elisa test and the great lab performance of the LFT. And don't forget the ease of manufacture of affimers, greater batch consistency and lack of harm to animals in their production. Not saying its a done deal that we will be the best but it would be a surprise if we are not.
Saint Al has, all along, said that it is all about manufacturing capability.
The ramping approach is to say that internationally everyone is increasing capacity to X/month. Which is pretty much certain. Then to say that we'll have the best performing test. Fingers crossed. Then we'll make Y squid each. Well... we will be making a profit on them. If we are the best, we'll take Z% of the market. Quite what the values of X, Y and Z are won't be known for a while. Each investor will make their guesses and look at the current SP and buy or not buy.
Me, I'm hoping for another drop and I'll buy some more . Failing that, I probably already have too many, so won't be too upset if it takes off before I can have one last cheeky little top up.
DP - I think 5-7per test is a reasonable guesstimate.
1. even at the lower end of 119 m a month that is 2x what PA Consulting April 60m a month target.
2. 119 plus target might not be hit in April but by the sound of what they want to achieve with school testing etc. and gradual opening of economy we can surmise the Govmt would prefer to be closer to 119m plus in April/May.
3. For this they need to have had a strategy.
4. the strategy might entail using several tests, but is going to largely entail prioritising production and use of the best performing/most easy to use.
5.That means whilst we can use the remaining Innova tests brought they will not be buying more if they can avoid it. Surescreen they may buy more but they will also be hoping that Avacta's test is as good as a initial Spanish data suggest and that it is therefore a new gold standard. They may already know it is because they may have significant data from patients in the UK. Alternatively, they may be about to get that (we know there is some AN testing trials of some kind happening now). 6. Lots of manufacturers upping capacity but, if you exclude any capacity the government are providing, I can't see more than 30m a month by April and I can't see the Govmt wanting to make up the shortfall other than very partially from import/ inferior tests.
7.So I think there needs to have been a plan to get UK manufacturing levels to close to 100m this spring. I suspect a big part of this is via loan of Govmt purchased automated lfd machines. They bought from Ginolis and from a Cambridge company. They may also have other members of BIVDA that we haven't heard from contributing production capacity.
8. If Avacta is the gold standard test most of the government laid on capacity will almost certainly go to producing its test on top of the 10m or so it has already contracted for.
9. This is just UK. If the test is gold standard it won't be just UK wanting 100m plus but probably Europe wanting several hundred millions , US similar and more to elsewhere. The ceiling is probably a billion or more a month. If there is demand for the test, new manufacturers will come in to supply
10 at 5-7 per test we should be looking at a couple of quid gross margin per test for Avacta. The maximum potential is of the order of a couple of billion pounds profit a month or potentially 10s of billions over the lifetime of test demand.
I can understand people focusing on 10 million per month capacity for the LFT as that is what AS alluded to in the recent interview.
However, to me the capacity for the ‘sovereign test’ is akin to dark matter - everyone knows it must be there, but until it is observed directly it can’t be taken as fact - and so AS is unable to refer to it.
Following on from my post yesterday the two huge clues this week are Avacta’s ‘mid-single digit GBP range’ comment and the Government’s £10 billion spend over 12 months.
Taking a range of £3-7 as mid-single digit then logically the Government consortium must be highly confident that they have access to capacity in the region of between 119 million and 278 million units per month on average, although I think a price point of between £5-7 is more likely, so 119 million - 166 million pm.
The only question remains is whether the Avacta LFT forms a significant part of this, but the clues are looking pretty good and we will find out for certain in the next few weeks.
Matt. A little respect please. Have researched but looking at different areas including energy so just one of those early morning oversights. I do not read every post on this forum but will keep up to speed.
Thanks will have a read. Didn't click when I was looking. Just saw Abingdon...??
Strangy - there is a big difference between antibody and antigen. I suggest you look them up first before investing.
Strangy really - facepalm moment that one!
Here’s some weekend homework.
“ AbC-19TM rapid antibody test”
Now have a read of the last RNS, be a good start to some clues.
So for a newbie like me does this have any link to Avacta or is it not related?
https://www.abc19.com/
A little o/t but have to say I was so pleased when my Son at a relatively young age got his head around compounding.
GLA
My kids are young and I’m betting that there will be new ways in the future of communication so in all likelihood post interception would not be workable lol!
The child is notified at 16 so you had better intercept their mail haha. They have full control from 18 and all funds remain in an ‘adult’ ISA wrapper.
So I found this:
Q What happens when a child with a Junior ISA reaches the age of 18?
Any money held in a Junior ISA is automatically rolled over into a normal ISA once the child reaches the age of 18 so it will remain tax-free. The child can then continue saving or spend the money as they wish.
So looks like it wouldn’t use the 20k allowance at all it just becomes the historical savings within the ISA wrapper. Who knows how they will contact the children in the future but it by post then they don’t necessarily need to know about it. Probably best educating them as much as you can about money and savings just in case in the future banks have different means of communication with customers.
Interesting about this actually because I’m not giving my daughter access to her Jr ISA till she’s buying a house...
I think at 18, would need to get her to convert to a standard ISA? Then if over 20k annual limit, how to add in one go?
Hmmm
Junior Isa lol- can you not let them know about it? At least until they are 28 and more sensible? Or do they contact them at 18 ?
Already planning to put max into junior ISA for my lad. That should sort him out well when it's available to him :D
Apologies PExpert but haven’t been following posts but if you are referring to our first clinical trial then the PreCISION technology doesn’t contain Affimers so more patience needed. However we do have other dark horses running. Moderna’s star has certainly risen with the success of their tech in producing a successful COVID vaccine not to mention billions of cash flow. They were the first to collaborate with Avacta back in, without checking, 2015. After working with them for 4 years the further licence was signed two years ago. Avacta say they have no vision of what Moderna’s plans are and COVID has put many projects on hold. But there remains the possibility of Moderna being the first to take Affimers into the clinic potentially this year. Apparently Avacta will only be informed if and when a related product goes in to the clinic. South Korea is the other dark horse. We have begun to get known there so whether it’s our partners performing a miracle and getting Affimers into the clinic this year or production of our LFDs or just another collaboration watch this space
The moment when people realise the IP value over potential LFT sales.... OOOF
SD
Couldn’t agree more. Validation of Affimers on the world stage plus cash flow to progress. I was fortunate enough to attend the Avacta science day a couple of years ago. ‘Matt’ was adamant Affimers outperform antibodies in numerous different diagnostic scenarios. As he said with his Abcam background if anyone should know, he should. ‘Bill’ does give the impression of a mad scientist but his excitement over TMAC was tangible. If I understand him correctly Affimer conjugates with a selection of ‘warheads’ using the PreCISION technology were potentially a cure not just a treatment for many cancers. If their LFDs and for that matter BAMS are indeed world leading the resulting cash flow and global acceptance of the Affimer technology would bring truly mind boggling success. Please note still very big IFFs.
Once phase 1 completes, we'll have confirmation affimers work in humans. At that point I'd expect takeover proposals from anyone who has been monitoring avacta of at all, at that point the tech is derisked entirely. Typical pharmaceutical pe is 20 but given the limited windows for lfts, you'd revise thay down ofc. NCYT been running at avg 4 pe given their limited future (as of yet), so any where between 4 and 15 probably reasonable.
Yes the near future sp value will not be p/e based, it will be driven by hysteria and emotion (especially on Aim!) so be prepared for a wild ride once we know value of contracts!
For me the valuation of our company when contracts become known will not directly correlate to any kind of mathematical equation you can do whereby factors like profit per test amount of tests sold and P/E numbers are input and out comes the answer.
That may be more relevant for NCYT or ODX.
For us just consider that every hundred million added to the bank is going to mean other drug candidates being pursued faster, more waves being made in the industry, more and more publicity, more takeover talk meaning of course all bets off re valuations.
This is not pie in the sky talk imo.
This is likely to happen.
While its impossible to say how many tests and for how long, what it should result in is many millions of £ revenue and as a result I can see a special dividend coming because if is relatively short lived and therefore might not be seen as annual revenue, what are they going to do with all that cash? Sure, keep some extra for fast tra ckdevelopment (£50m) but really, that should leave an awful lot left over?
P/e of 1 would be for 1 years earnings, 2 for 2 years, etc. AS thinks this will be min 2 years and then maybe reducing, so say average 3, add in the ROW and you have 3-4 times those figures at least! So that means sp £30 ++. Then the cancer opportunity and more and a further ++. Just amazing .......will take awhile to get there, but 12 months will be just gobsmacking......hold on for an an amazing ride!
ok - yeah if it goes on at that level for 2 years straight. worst case we might have 75% production reduction required 18m on. I do think at least £1 is already built in at present.