Sapan Gai, CCO at Sovereign Metals, discusses their superior graphite test results. Watch the video here.
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At no point has it been mentioned that NCYT ar exited up in the GLP review. However NCYTs contract was awarded during the same time period. As time has went on and that case got dragged on, the suggestion has gained legs.
Personally I dont believe it is because if it were, other parties like the GLP would have released it.
I didn't think Ncyt was anything to do with Abingdon or anyone else?
I think I know exactly what is going on with the DHSC dispute. Under EU law if a contract hasn't gone through the correct procedures, the contract is void. I think the contract is therefore tied up with the outcome of the Abingdon judicial review which is supposed to be determined in May. I reckon if the court decides the contract is valid, outstanding invoices will be paid in full. If the contracts were illegal, DHSC will argue that all they are required to recompense will be for the materials purchased etc on a quantum meruit basis. To complicate matters DHSC seem to be arguing that the goods were defective, but that might work in Novacyt's favour as it is then a warranty claim. All a bit of a mess, but I reckon May/June for setllement. Unless DHSC decide for political reasons, they want it buried.
Risehall
I had high hopes that an announcement of the dispute resolution would be made this week but no such luck. I can't believe that this has not been resolved through arbitration or whatever dispute resolution provided by the contract. DHSC has the NCYT in a stranglehold and appears to be using it for leverage.
That said, I think the market is also looking for a plan to deal with sales eroding by 50% a year (per NCYT's own projections).
I invested in NCYT and did well with the shares I bought in July 2020. and sold later that year. Unfortunately, I thought it got beat down way too hard and bought in again starting last August. I was impressed by the speed at which Primer Design reacted to the needs for pandemic testing and thought the innovation would outflank competitors. I learned about NYCT through their research relationship with Immunexpress. Both BCART and NCYT have partnerships with Immunexpress. To be frank with you, after 5 years of research and a two contract renewals, I thought the NYCT - Immunexpress team were on the cusp of announcing a blockbuster point of care sepsis biomarker assay. Sepsis has a huge unmet need in emergency medicine and Immunexpress has more than a decades worth of research into host response biomarkers that led to development of Septicyte Lab and Septicyte Rapid. The development of a sepsis assay has drug out a while and now other competitors such as Inflammatix are seeking to bring similar sepsis host response diagnostic products to market. I still think we are likely to get a glimpse of this product later this year but it will likely face more competition than when I first invested in NCYT. A good sepsis biomarker test that runs on a platform like the Q16-Q32 that is already in use in Emergency Rooms and ICU's would fill a major unmet market need. The IT-IS hardware has already been deployed into many hospitals where the test would be most useful. So I have no doubt that Sepsis biomarker assays are a high priority for NCYT. If this assay looks good during validation then I'd look for NCYT to buy out Immunexpress.
Good Luck
FL
The thing that is really holding Novacyt back it that DHSC dispute. They need to get it settled.
Poidster
R&D to develop new assays is expensive, global expansion (especially with their own salesforce is expensive). IVD registrations in each geographic jurisdiction is expensive . BCART has stated on numerous occasions that they want to remain independent rather than going the route of a Cepheid and being acquired by a large diagnostic company. The buyer/partner is going to want any acquisition to be quickly accretive to earnings but BCART is still likely to be a couple years short of breaking even. BCART has a razor and blade business model. Once the console placement is made then the cartridge use ramps as the user gets used to the time and labor savings associated with Idylla. The problem is that the initial placements were slow since they were growing the content assays that could be run on the console. They are reaching the point (at least in the EU) where they have sufficient offerings to entice adoption. The advantage to this business model is that it can produce many years of compounding growth (i.e., like Cepheid). The disadvantage is that the start up is costly as the company has to place the consoles at relatively low margins knowing the profit is in the future use of the cartridges.
Regards FL
@FL dunno if that was a cut n paste reply or manual one, either way thanks, very informative
@flat, thats a good suggestion, I said a while ago that the oncology market would be a great area of expansion for NCYT, the downside is that the R&D would be more expensive that microbiological investigations, acquiring or merging with a company who has already got several tests already would be a shrewd move.
Also, it could be massively beneficial to patients and outcomes.
Good post
Baby Huey,
Last point , POC infectious disease MDx is a very crowded space. Point of Care oncology is a very fragmented market with no single dominant player. Roche and QGEN are behemoths but still do not have a lock on the segment. Fisher and Ilumina are huge in NGS but as shown in the initial links Idylla can be used in a synergistic manner with NGS.
FL
Cash is not the only thing that is being burned. In August they had a warehouse fire that destroyed most of their PCR reagents and significantly hampered operations for 2021. So instead of 80% sales growth they finished with 40%. They brought a high throughput cartridge manufacturing line into production that was designed to drive down the COGS and improve margins but the fire hit just as the manufacturing was ramping.
Outside of the EU where they have several IVD assays, BCART offers primarily RUO assays in the US, Japan and China. That begins to change in 2022. MSI should receive US FDA 510K approval in the next 2 months. China and Japan registrations EGFR, MSI and BRAF are anticipated later in 2022. They began building a 3rd cartridge manufacturing line in China hence additional increase in cash burn. The EGFR product should do well in Asia since mutations in this pathway account for about 50% of the NSCLC in the Asian population. Also, NGS is not as widespread in China. The emergence from the Pandemic is an Ideal situation for BCART since the system allows assays to be conducted with minimal staff and the cartridges can sit on the shelf for up to a year until they are needed. These features are ideal for social distancing in the lab.
BCART dumped Fisher as their distributor in the US and built out their own sales, servicing network. While this was expensive, it was necessary since Fisher sells competing NGS equipment for small labs and POC use in hospitals. Having your competitor selling your diagnostic systems was not a good situation. Long story short they have been burning about $60 mil EU per year placing the consoles globally but are just getting to a large sales inflection point where margin improvement should occur rapidly. Selling RUO product is not that lucrative, and that is one of the future endeavors that Novacyt is pursuing (based on yesterdays PR).
I think a NCYT match with BCART would make sense for NCYT since it would diversify away from infectious disease, the growth in onco is expanding at least 50% per year rather than contracting at that rate as Covid becomes endemic. Based on the speed of EU marking I believe the NCYT has one of the best R&D and regulatory filings groups around. These are areas where BCART could use a shot in the arm. The Idylla system suffers from a chicken and egg problem. They need content (i.e., assays) to make console placement/purchases more attractive but they need more consoles deployed to make the platform fore attractive to 3rd party assay developers. SkylineDx (a dermatology partner) appears to be greatly accelerating the pace of their Merlin melanoma assay and should be starting clinical validation later this year. To me, this indicates that the RnD necessary to develop an assay can be cut to a year rather than 3 that BCART has been taking. BCART wants to avoid being absorbed into a large competitor, NCYT might make sense as a merger part
Yikes, spotted the reason for drop, they're losing cash, lots of it
@flat I like your thinking, but why is their share price dropping
NCYT desperately needs to show a future growth path beyond Covid, BCART desperately needs a cash infusion but is on the cusp of worldwide registration approvals of a number of RT-PCR oncology MDx assays. Oncology is projected to be the fastest growing area of MDx for the next 20 years. BCARTs Idylla system automates assays such as EGFR, MSL ALK, ROS1, BRAF etc allowing results to be available quicker without the difficult interpretation associated with NGS. Also, Idylla can resolve about 25% of the NGS tests that fail due to degraded DNA. My bet is that NCYT's expertise in PCR could greatly accelerate the rollout of content assays offered on the platform. An increased number of assays would make the platform more attractive. NCYT would get access to fast worldwide growth not tied to the pandemic and would also get access to the Phillips IP that makes point of care oncology testing possible. NCYT does not presently have sufficient cash for an outright buyout, so a merger would seem to be most logical approach. Here is some info on BCART, which is trading at all time lows.
https://investors.biocartis.com/sites/default/files/2020-11/201112-bcart-cap-markets_day2020_final.pdf
https://pubmed.ncbi.nlm.nih.gov/35042754/