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My buckey needs 4 Unfortunately.
Who needs a buyback!
Lesley
Fully agreed.
Time to reward shareholders now, not mañana, mañana.
At least with the $325m coming in within a few months from the closing of the Karuna takeover by Bristol Myers allied to the establishment of Seaport and Gallop to reduce significantly the development costs of a wide suite of in-house drugs, there are no more excuses not to return at least c$200M to shareholders very soon.
I think Zohar wants to do this as Invesco and other Institutional investors are getting very testy.
Big few months ahead.
Maybe far too many ifs and buts are holding investors back.They dont like investing in jam tomorrow companies in my opinion and if Karuna isnt approved and lyt100 fails where do they go from there? Another 5 years? For me is Zohar sold out for less than the sp a couple of years ago i.e £4 i would be very very unhappy
TakeAim
I may have been too bullish on the timing of the remaining Royalty Pharma payments of $400m.
The company remains coy on the details of the agreement ( $100m already paid last year by Royalty Pharma) but a Royalties accountant friend of mine suggests that the next tranche of the balance of $400m will be paid on the FDA approval of Karuna's KarXT on the 26th September 2024 with the remaining amounts paid on commercial milestones most likely the achievement of $1billion and $2billion revenues from Karuna, now part of Bristol Myers.
Accordingly he suggested figures of $150m on regulatory approval in September and two further payments of c$100m and $150m on Karuna revenues of $1billion and $2billion respectively.
Puretech will receive a milestone payment of c$10m on FDA approval and 20% sub licence fees going forward.
Puretech will also receive 2 % in royalties on Karuna revenues above $2billion with Royalty Pharma getting 1% royalties over this figure.
Pure conjecture in the absence of the company confirming the details of the agreement but looks plausible.
What action Bristol Myers may take on the seepage of revenues from royalty payments is another interesting
feature of the deal.
ATB
I think the bull case has been very clearly documented below Lesley by Dallo and others. I'm personally envisaging a buyout at 3 or 4x valuation or a re-rate to around £4 when Karuna and hopefully favourable LYT-100 data lands in H2.
I did note fewer sells yesterday and a £200k buy. Was that the turning point or was the seller on holiday? Next week will be revealing.
Why does Peel Hunt think PRTC will ever reach £9.I would be over the moon at half that if even thats possible.Does anyone have thoughts what price this time next year
Correction
Royalty Pharma is receiving 3% of Karuna revenues up to $2billion equal to $60million per annum for approx 10 years equal to c$600m...Bristol Myers see $2billion revenues as a base level in its acquisition document and much higher in its investor commentary.
Regarding the Puretech/ Royalty Pharma deal on royalties from Karuna it should be noted that Puretech has already received $100m of the total $500m agreed and it is my clear understanding that the balance of $400m will be received on the FDA approval of KartX in September.
This approval is almost certain otherwise why would Bristol Myers have paid $14billion for Karuna.
Royalty Pharma are getting 3% of all KartX royalties up to $2billion revenues equal to $600m plus 1% on all revenues above $2 billion which could amount to a further $40m per annum for say 8/ 10 years when revenues , for example, reach $6billion thereby giving Royalty Pharma a possible total ROI of up to 100% on its investment.
So why would Puretech forfeit part of its royalties rights if it wasn't paid upfront by Royalty Pharma.
Remember Puretech retains royalties of 2% over and above Karuna revenues of $2billion or possible annual payments of c $80m on revenues of $6billion
As Archer quite rightly says in his analysis you must risk discount these numbers for obvious reasons and so it is a great deal for Royalty Pharma and I am not sure Puretech would have done if it knew the Bristol Myers takeover was going to happen.
How Bristol Myers deals with such a revenue drain from the royalties is another issue altogether...it would be wise to take out Puretech now at say £4 a share or £1 billion which would be a snipe in the context of its $14billion acquisition of Karuna and get all of the c$700 million in cash ( including Puretech's shares in Karuna) plus the whole shooting gallery of Puretech's remaining assets.
This underlines the crazy undervaluation of Puretech shares imho.
I hope I got my figures correct as I am a bit jet lagged after returning from Florida after a month on the beer and sunshine 🌞.
ATB
Be interesting to see whether the SP sags without the buyback, maybe more buying opportunities although I am overloaded already. I see from Karuna SEC filings that the next step to get Karuna shareholder approval for the takeover is set for 12 March. Based on experience to date, do not think that we will see much SP improvement until the cash is in the bank, let's hope I am wrong!
Malt
Thanks for that news on today's RNS update.
I did not read it as I thought it was just another share purchase notification.
Confirms capital return on completion of Karuna acquisition by Bristol Myers which is due to be finalised within the next 2/3 months.
ATB
According to this morning's RNS the buyback is now complete, 7% of issued share cap now held in treasury. New buyback will be considered when Karuna cash in the bank
Don’t know how he would know anything .I guess he’s just speculating.
In the article, Archer mentions that the bulk of the milestone payment of $400m might be paid once KarXT gets FDA approval. I wasn't aware of this. Is he just guessing or is there some truth behind this ?
Thanks for posting the link. It’s a good summary of the investment case and as Dallo pointed out it does miss out a couple of important notes such as returning capital to shareholders following the Karuna sale.
Whichever way you look at the investment case, undervalued is an understatement. I will continue to add whilst the SP is playing around at these levels.
By the way I am not being critical of Archer's analysis which is very thorough and informative for new investors.
I only hope the market focuses soon
on the hidden gem that is Puretech before a smart predator swoops.
Lesley
Archer has copied and paste some of Puretech's website comments but also appears to directly quote some of my own recent analysis ( and others here on LSE ).
I agree with many of his observations but he has omitted the company's commitment to return cash to shareholders following the completion of the Bristol Myers acquisition of Karuna which is only matter of months away which could result in a special dividend/ buyback of the order of £200m.
Also following the completion of the current buyback programme in 4/5 months the free float will be approx
50 million shares which is nothing.
An announcement of an IPO for Vedanta in the near term could also be a major catalyst for a mega rerate of Puretech shares imho.
Like others here I am dumbfounded by the current share price but this could dramatically change in the weeks ahead.
ATB
Been watching for a while and have dipped my toe.
Scratching my head trying to work out why the SP is where it is. Don’t like assuming the old cliche of ‘there’s a seller’ but can anyone please briefly summarise why it’s so cheap?
Downside risk looks almost non-existent (famous last words…)
GLA!
Don’t know who this guy is but he’s just copied and pasted from Puretechs web page
Nice write up on PureTech here:
https://uksmallcapstocks.com/f/puretech-health
Any idea why Gelesis is reading $0 00
Leslie50
‘Investors not in it for the long haul’
That’s AIM summed up nicely! ;)
JSB I agree, surely the SP should be higher than £2
If LYT-100 were to fail, you will still have a company with more cash than the market cap, 40% in Vedanta which could IPO in the coming year and a stacked pipeline across multiple indications. I don’t see much risk on the side of shareholders when the SP languishes under 200p.
Lots of positive comments here.The big concern for me the constant “ Potential “ of the company. I bought at £4 so long road ahead. My concern is investors aren’t in for the long haul.and are they a once trick pony If even Karuna is approved If Ly100 fail then I think the company is in big trouble.Sorry for being negative but I do think a bit of realism is needed