Gordon Stein, CFO of CleanTech Lithium, explains why CTL acquired the 23 Laguna Verde licenses. Watch the video here.
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Nothing particularly of note to add from the webcast. Again, the reaction of the SP is very Puretech. The tender offer will at least remove 36 million more shares and the mechanics of this should squeeze the SP.
The new CEO said he is committed to unlocking value for the company. When pressed on this, he repeated part of the presentation.
Lesley
Spot on with your comments..share price now down 13p from its early morning high.
Exasperating share indeed.
Presentation at 2pm alongside the release of the annual report. I will tune in and summarised any points additional to the RNS today.
Its Puretech remember Could be down by the end of the day😊😊😊🤣
Not likely! Especially since they have indicated they will pay any untendered as a dividend and it is obvious the NAV is close to double that. And what would you do with the money you get from the share tender? You would find it difficult to get better value than Puretech!!!
Market seems to like so far. Not really anything new here though, except cash a little higher than I thought.
$575 million in cash before the Seaport financing ($32 million) and tender offer ($100 million) so the company will have around $440 million.
I’m guessing next week we will have the information for the tender offer.
CEO Chowrira has highlighted that the market hasn’t fully recognised the value on offer.
Annual report and presentation later today which I will be watching.
The new management certainly need a better way to communicate the value held within the company. The management have said previously that the company is chronically undervalued but that hasn't improved the situation. We will know by tomorrow if they have been effective with this communication.
There are so many biotechs that are on the knees due to lack of funding and market conditions and Puretech could really exploit this in their favour. They will have almost $500 million in the bank (with more coming in by September) so why not pick up some assets or take positions in companies before sentiment in the sector turns up.
I am hoping they make the market cap disparity Vs NAV really clear tomorrow. This is something that has been lacking in the past as they don't seem to attach a specific valuation to their more embryonic projects or even ones that have been through funding rounds. If they want the SP to be where it should be, they have to really spell it out to investors!
We are all missing something Doff! When the share price was 400p (£1.1 billion valuation), they had $480 million cash. That is likely to be an additional $100 million and a pipeline which is much farther advanced. I appreciate the markets were toppy back in early 2021 when Puretech were at 400p but they have progressed a long way since then and I think that 400-500p would be a much fairer valuation.
In April 2021 the share price was over 400p and now it's just over 200p. With all the recent news I find this totally baffling, am I missing something?
I can see either a takeover coming, a structural change to the company or change in strategy very soon if the market performance doesn’t turn around soon.
Let’s assume they have $575 million (pre tender) in the bank and the market cap is $690 million. For $115 million, you are getting $400 million in KAR-XT royalty payments ($50-100 million due in the near term), 100% ownership of Gallop and LYT-100, significant stakes in Seaport and Vedanta of which Puretech’s stake is worth north of $100 million in each based on the last fundraises.
The results will be interesting to read on Thursday. Let’s see if they address the disconnect between market performance and company performance.
Everyone will be able to tender at least 14% of their holding regardless. Invesco hold 24% of the company. I don’t see them tendering any shares and I think other big holders will follow suit. If you tender all of your shares, you’ll have most of them taken for 250p.
Once 14% of the shares are off the market, the share price will move up towards that figure and possibly beyond.
......the less value to the co the tender will be. All new holders who may be eligible will tender their entiire holding and get nothing or perhaps a single £2.50.
Good to see the enrolment has now completed and the topline results are on track for Q4.
Lesley
Zohar is NOT remaining on the Board of Puretech but is going to be "an observer" what ever that means.
A bizarre changing of the guard with Chowrira taking over as CEO who has been a senior executive in Puretech for some time.
I see Invesco as the main instigator behind the ousting of Zohar after 8 years of chronic underperformance in the share price ( £1.80 in 2015 ..£2.14 today)
Invesco has maintained its 24% over the past year or so but had c33% in 2021 /22.
It had to reduce below 30% to accord with internal Invesco rules on holding large stakes in companies after a major review in 2021.
I was quite critical of the buyback at £2.5 in my correspondence with Kana in Investor Relations and now appear to be blanked.
Strange behaviour indeed.
Where does it say they’ve reduced ? They have 24% it’s never reduced
Patience indeed! Years in most investors case.I would contact Puretech 3 to 4 times a year and always got a polite reply. I contacted DZ after the tender and politely said in my opinion 2.50 was a bit low.She then blocked me So again very politely contacted Puretech asking why DZ departed at such a strategic time.So far nothing in response.I have one positive that DZ is still staying on their board.Any comments anyone?
Thanks JSB for your thoughtful assessment. I am a holder who feels positive about the potential value, one way or the other. It is also healthier that Invesco has sold down some of its massive interest. Obviously there are risks, but for patience there is a real opportunity for good results.
There is no love for the company. The hub and spoke model and company strategy significantly derisks them as a biotech but it doesn’t seem to attract the appetite of many investors.
Many mid cap biotechs are one or two trial results from being boom or bust. Had Puretech kept a significant % of Karuna and it failed P3, they would have been left with very little but in hindsight we can look and say that they could have had another couple more billion if they held a higher % for longer.
I see four valuable assets in Puretech now. We have Seaport, Gallop, Vedanta and LYT-100. I’d expect the first two to list on the NASDAQ at some point as Karuna did and more value unlocked as they progress through clinical trials.
I don’t know what the answer is to unlocking the true valuation but here is hoping that our new CEO does. The share price is dire for what is on offer. The company is sitting on $600+ million (pre tender offer) and the valuation just under $750 million. So you have the above mentioned for $150 million and the remaining royalties and milestone payments from KAR-XT still to come.
I am not that stupid
Sorry
Hi Dallo, if you don't mind can you please name the small pharma that you wanted PRTC to acquire. Thanks
Unprecedented
Firstly Invesco hasn't been selling down recently and was instrumental in getting rid of Zohar imho.
Short term traders didn't effect the SP and it was the $50m buyback plus the BMS takeover of Karuna that generated a small lift in the SP.
LYT-100 is awaiting Phase 2 trial results later in the year which may spark a rise in the SP if positive but still will require a Phase 3 study which normally takes 2/3 years.
Seaport and Gallop are at an early stage of drug development and will require years of positive trials before commercialisation.
Vedanta is much closer to a breakthrough and could be a big winner.
The market and Invesco didn't appreciate Puretech trying to bale out Gelesis where Zohar's husband was CEO.
Why would Zohar leave Puretech to run an effective start up when she was CEO of a large Public Company which she founded if she wasn't pushed.
I presented an opportunity to Puretech to buy a small Pharma company where one of it's drugs is in Phase 3 trials and another drug in Phase 2/3 trial each with market potential of over $5billion with significant other assets for a cost much less than the tender offer amount of $100m.
Only a deeply unimaginative management would use its cash surpluses to buy back its shares at £2.50 which effectively says they cannot think of any alternatives to enhance shareholder value other than giving back the funds at a derisory valuation.
I didn't ask for a return of £2.50 a share but told them ,if they were going to do it....do it big at £3 to reflect management's view that the share price was totally undervalued.
It would have cost an extra $30m of our $300m proceeds from Karuns with the $400m royalties still to come and the cost savings in R&D from the hiving off of Seaport and Gallop freeing up major cash outlay over the coming years.
With all this good news, if this does not attract buyers in London I see no alternative but a move to the US. This must be in to the directors minds.
Unprecedented
I am not a short term trader and I have been invested in Puretech for 6 years.
My problem is that you live and die as a CEO of a Public Company on the basis of the share price .
The SP was £1.80 in September 2015 and par a brief jump 2 years ago , it remained at c£2 which when you apply an inflation discount over the past 8 years the £2 is worth a little than the £1.8 of 2015.
In other words a disastrous performance given the circumstances and Zohar had to go imho.
Hopefully the new CEO can be more investor focused
but how long more can we long termers wait for a return on our investment.
That's why I was disappointed with the £2.50 tender offer and is why I urged Zohar to be more aggressive with the surplus cash and look at acquisitions as a possibility.
The market has shrugged at Zohars departure and the tender offer.
Where are the next catalysts for a rerating of the share price?
I will continue to hold for a while longer but I am getting old!!