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Inkose thanks for the heads up on the Washington post. Good that they put in a bit of the science for people to understand. I did the equivalent of a level science in Australia when I went over there ( emigrated). Whilst I was working in the oil/ gold mining industry was bored so decided to do some courses at the local tech collage and learnt a lot about T cells etc, and that was in the 1990s.
So I can understand a bit. Moderna are trying new technology so it’s quite new , will it pass phase 111 ,who knows . But it’s certainly overhyped, the trump probably has it with his breakfast.
These are the ones to watch. Sanofi, gsk/ clover, Novavax, GSK/Sanofi, Merck, Pfizer , As these are the biggest vaccine makers on the planet missed another two who I can’t recall . possibly Jenner/Oxford/ AstraZeneca collaboration may make it. Moderna haven’t even got a vaccine on the market yet, just had loads of money invested in them. Sp is massively overpriced in my view.
The European Commission (EC) has reached an agreement with AstraZeneca (NYSE:AZN) to purchase up to 400M doses of COVID-19 vaccine AZD1222, if approved.
The EU has allocated €2B ($2.3B) to procure vaccines from up to six producers.
If you want to understand the different types of Covid-19 vaccines, and who is developing them and what stage of development they are at, the read this article in the Washington Post.
They let you read a few articles each month without taking out a subscription.
This is the reference:
AstraZeneca set to start making 400 million COVID-19 vaccines for Latam early in 2021
Thanks for the info Inkose. :-)
AstraZeneca (NYSE:AZN) has shipped the first lot of Flumist Quadrivalent (Influenza Vaccine Live, Intranasal) to the U.S. for the 2020-2021 flu season. It is indicated for people between the ages of 2 and 49, although it may not prevent influenza in everyone who gets vaccinated.
As per GSK, buy on the bounce. Expect the sp to go back up over the next few days.
3... By the time a good vaccine is announced along with the scale and efficacy to ‘kill off testing’ it will be.. well might be never. The narrative is clearly that testing is needed well into 2022 to 2025. And that’s coming from high level analysts. All types of testing too. PCR is staying put. Lab testing is staying put. Voleon are academic, they don’t make silly bets on ‘vaccines killing testing’. Let’s just move on from that.
If you’ve survived to this point, then here’s where it gets interesting. Because although there are a few threads left we could head down, there’s nothing personally I’d consider convincing, except merger arbitrage.
Merger arbitrage is super sophisticated hedging. Definitely not for a random hedge fund an definitely not for retailers – so if you’re reading this and thinking you’re about to base your next trading strategy on it, just, well do not. It’s super risky, and the margins are small.
You’re looking for maybe a few percent on the merger.
The basics are you would go long on the company being purchased, and you would
go short on the company making the purchase.
So if for example a merger arbitrage was taken out on Novacyt – you would go short
on Novacyt, and you would go long on whoever Novacyt was buying.
Why not go long on both you’re likely wondering. Well historically the prices shoot up on the company being acquired and the price on the company doing the buying usually takes a small hit, it’s not much, but you can make a few percent on the short, and maybe make the same on the long.
Usually merger arb goes on after speculation or an early stage announcement. No such thing has happened on Novacyt. But again, maybe there’s a head’s up going around. Maybe they’ve been doing their research. No-one knows their strategy aside from they market the academic machine learning angle. Machine learning at the high end is no longer about trading strategies, it’s also about pulling data from tranches of news, reports, studies etc. Getting the algos to do the hard human work on text and context.
My question is – are Voleon getting good enough that they can now predict M&A’s from a range of material then pull off a sophisticated early merger arbitrage?
If they are, then Novacyt’s about to buy someone. And Voleon has a long on them. Or maybe the company is private, and they’ve only shorted the buyer. Merger arb can go the other way (ie. go long on buyer, short on company to be bought), but none of it makes much sense then – if you short the company to be
acquired, you’re betting the share price is going down due to a low ball bid. Unlikely
2... There’s a rumour going around about Astra Zeneca buying Novacyt. Rumour breaks down roughly like this:
Astra and Novacyt are existing partners
Astra took out a $3 Billion bond loan
Astra paid $2.7 Billion for ZS Pharma
Voleon shorted ZS Pharma 2 weeks before purchase
Right, so you got it. The rumour goes that Voleon has a tip-off as they did previously perhaps on ZS Pharma and are trying the same game again, possibly even at the behest of Astra. Their short on ZS Pharma was perfect. Large bear raid and Voleon likely made a killing. Price shot up as short closed and ZS Pharma acquisition was announced. This is market manipulation – we know it goes on, but to do it so brazenly, especially twice with the same company involved – with the level of scrutiny that M&A’s get? Could be, much worse happens regularly, and we’ll never know, but it’s maybe not the most likely scenario.
Also, either way, it doesn’t seem to be happening here with Novacyt. The stock price isn’t collapsing. And ZS Pharma was more volatile than Novacyt is now. It looks like Voleon got a safe, high price to short from with ZS Pharam, and and good low to close it out after the bear raid.
Novacyt’s bear raids are done and dusted. The days of that sort of volatility and large institutions looking to close out look to be over for good reasons relating to the type of holders and what they’re expecting.
Okay so it’s all a mess now. Loads of waffle and nothing really conclusive.
What if Voleon are more sophisticated than any of our presumptions suggest. They are academic and and their positions are likely to be more opaque than a casual investigation would detect.
Hedge funds shorting Cineworld for the past two weeks? We get it. Well done, any of us could have joined the bear raid and cashed out around the mid 30s. Not particularly clever.
And at the odd prices starting around 270p and increasing around 300p and 320p?
They didn’t increase the short during the recent highs, at 330 to 340p. Why? That makes sense if you’re increasing your short – you buy the highs, just as a long buys the lows. Were shares simply not available from a broker around those prices – could it be as domestic as that. Or is the algo set to buy around a certain price and missing something even better? Shorts are deals, so if they’ve missed a good price, it’s likely they didn’t have the option, or didn’t want it.
That leaves us with two avenues next. One is pretty prosaic and it’s regarding some catastrophic news killing off Novacyt – vaccine or some competitor’s technology.
This is the some of retail-level back and forth you would expect, but a hedge fund is much more sophisticated again.
1....Voleon Merge-Arb Brainstorming.
Feel free to share, edit, criticise, dress up or add anything to this. I have edited it as it’s just a stream of consciousness.
Before we get into this, lets assume everyone agrees Novacyt’s price action has unusual and appears heavily suppressed. The market cap (a method of valuing a company for our new friends) reads strongly that the company is undervalued. By any stock market metric, the company is currently undervalued.
Okay we can write that off for now as being due to the market’s uncertainty that sales will continue going into 2021, or that the market is unsure what sales Novacyt is actually making at present.
We can argue against this, but for now let’s leave it be and have a look at Voleon’s Short position.
There’s good observation in the public forums/social media regarding the technical reasons why Voleon would have opened a short when they did. I wouldn’t argue against that. The indicators show a loss of interest compared to speculative Covid stocks as those are considered to have the potential for quick and huge returns (100%+). Novacyt is seen as being in a different stage to those riskier stocks, as it has products on the ground and making sales. Just no-one actually knows how much, so it’s in limbo. Eyes are on it though and it regularly appeared in most followed lists throughout July.
So the short timing made sense. Novacyt uptrending yet it has little buzz or volume. Some resistance is seen just over 300p.
Fundamentally the short doesn’t make sense though – you short overvalued companies to make a profit. Usually. We know that overvalued companies can grow and uptrend for years and shorters has suffered considerably and have learned considerably from those mistakes.
So we know shorts aren’t simply due to a company being overvalued. Let’s rule that out for Novacyt. No-one’s shorting Novacyt thinking the company’s not making any money and the share price is too high. Everything points to the opposite being true. We also know there was a stunning bear in the past couple of weeks which Voleon could have made a killing on (and many hedge funds have) – but they’ve instead slipped this curious short in amongst all the other positions (they have just over a dozen open shorts right now, much less than you would expect given the volatile period that shorts have been making record profits in).
Right, we got that out of the way. Hedge funds hedge positions. Long/short sector trades. That still doesn’t tell us much, and still seems unusual. Why short Novacyt which is strongly uptrending, and go long on something speculative. Why not go long/short on two speculative EU Covid stocks when it’s improbable that Novacyt could lose much of its currently undervalued share price.
They have more than one product, Covid revenue is expected to continue through to 2026 at least, AZ could by Novacyt for £1billion and make that back in year one.
Good call PMoran, I also hold unilever and to me I actually took the plunge at 82 the other month and bolstered the position. It has stuttered alot lately but see today its showing a bit more stretch this afternoon, which is nice. My only regret wasn't taking a bit of profit on mad Monday when it went to £101, all beit for short period.
COVID-19 has weakened the US economy more than China's.
New research published in the journal Nature may partly explain the much lesser burden placed on China by COVID-19:
Long-lasting T cell immunity stimulated by prior exposure to the virus that caused SARS in 2003 (source: Le Bert et al., Singapore).
Not only was the US less prepared strategically for this virus to arrive, its populace may have been less prepared biologically.
Absent natural immunity via prior coronavirus exposure, vaccines that result in long-lasting T cell immunity are in the interest of national security.
I’m a holder of azn who recently topped up my original tranche was Ought at £35 a share. So even with a recent add on at just shy of £70 a share the company owes me nothing. As a long term holder I’m used to azn stuttering every now and then but they have grown consistently over time and I expect them to continue to do so. For me it’s up there with my Unilever and Diageo shares in the forever hold em category. I’ve given up trying to understand why the price moves as it does (or doesn’t as the case may be) and just stick with it and hope to stop reinvesting dividends and start spending them one day in the future.
Agreed. If Astra brought NCYT i would be extremely perplexed and concerned. Whilst the product seems good, a company like AZN surely would not be interested in a company going through a revenue spike in which has absolutely no guarantee of consistency going forward post covid and virtually based on a single product in a rapidly evolving competitive market.
AZN paying £2-3bn for Novacyte? You must be barking mad, what have you guys over at NCYT been smoking? Wishful thinking is putting it lightly. How on earth can anyone justify this sort of price tag?
We seem to have to price ranges ,am, and pm , the bstrd yanks always tend to take down any morning gains just 'because they can'
because of the high price of each share we are not in a position to make any difference to the SP. Large institutional trader's can take it higher or dump a huge chunk and take it back down again creating their own rang ,imo.
Unfortunately we have to go along with it.
Thankfully AZN, have a huge lot going for it ,sales and treatments way ahead of the markets expectations if you look at their trading figures Etc . Imo.
blue start to week
Been a long termer with AZN and my aspiration is to hold and see year on year growth.
However, after Mad Monday when in the day it went to £101/share this has really become stagnant and jittery.
My question is why? Confidence levels in the business stalling or is this healthwarning from JPM of overweight now a burden? From the heady close of three weeks ago its lost around 2months of steady growth.
I see a lot of chat on this NCYT link and previously when mergers were talked up the share price dived. All seems a bit odd given the market place.
Personally I can't ,and hope AZN, would not be interested in NCYT,.....A company of AZNs size are only concerned with long term longevity/growth ..once we are on top of Covid which won't be long off, the big question is what do you do with Ncyt's
Expertise, ...??' exactly' , nothing...
There are much faster and better tests coming to market soon, so not convinced NCYT is a good buyout for 2-3 billion.
However who knows with Covid, demand for testing will probably mean the need for multiple companies tests.
AstraZeneca Signs 1st COVID-19 Vaccine Supply Deal With Chinese Company
Looking likely, Novacyt's got the whole suite of testing products now, and the best 100% rapid 60 min PCR test. Antibody coming too. Not just for Covid but all diseases, covid has simply pushed them to up their game. Probably the best microbiology/diagnostics buy for AZN on the market. Wouldn't be cheap though. Novacyt's share price will be at least twice what it is now when September's results are out. Likely 2 to 3 billion for a buy at this stage.
If not then Nova will likely move to mid market and do an acquisition themselves in Q4. CEO has already shown appetite for M&A so that would be option B. Either way, they have too much cash coming in, looking to be 30 to 50 million in revenue per month from now to Q4 so they can go shopping.
Big jump on NCYT’ share price today . I hear they have been working very closely with Astra Zeneca on CV 19 and have something interesting to announce .
3 billion bond announced for Astra today also ?
Are they on the acquisition trail for the fastest , most accurate CV19 test supplier at he moment ?
Possibel takeover of Novacyt/Primerdesign? NCYT