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It’s coming soon… pounds not pence! IMHO DYOR
Mikodx - 100% agree that Renx has huge potential. That said - as we are all aware - the company has an FDA approved product (the regulatory bit); a US government approved cost model (the reimbursement bit); and goodness knows how many insurance/healthcare partners signed up who can access the test (the insurance bit). Despite this - there is little evidence that the clinical market is ready to purchase the tests, despite all the validation evidence available. Perhaps the medicare local coverage determination is the final piece in the jigsaw. In its defence the company has achieved a lot in a short time period; however its commercial and financial approach has appeared at odds with its positive healthcare journey. I do not assume a takeover at a decent price is a foregone conclusion; but given the potential there are pharmas/diagnostics who could view this as a bargain - even at multiples of its current valuation. On the subject of dilution - you are correct to note the company currently has c.124m shares in circulation. My estimate was based on the addition of the 26m second close funding placing shares which will be approved at the GM next week - gets you to 150m. Interesting to see if GB Capital take up their option at 30p by close of play tomorrow - if so that adds a further 8m. The convertible bond holder will continue to be paid in shares - currently 3.6m per quarter based on current share price. There are also a significant number of options available to directors, management and employees - exercisable at various values which will effect whether they are taken up - a further 37m in total. Lets hope we get some clarity soon on what's going on. SB
Silverblade - I agree the dilution is bad, but it's gone from 95M - 120M not 150M. Still not too bad, and the latest dilution should be the last. The company now has enough money to keep the lights on and see out the Takeover bid.
I've only invested in RENX because it has the KidneyIntelX platform which is FDA approved and being used and fully funded by Medicare. It's also being used by major United States Insurance companies and multiple state Blue Cross Blue Shield organizations. RENX has huge potential and could be about to be taken over by a big pharmaceutical company. That's the only reason I'm here, If it was because of it finances, I would have stayed well clear of this company, it burns through far too much cash. This Takeover has possibly come at just the right time.
Trickymatters - Too right, we really should be around the 35p mark, just a couple of pennies short. But it's to be expected as the UK are currently in the middle of a recession. Used to be able to get almost two dollars to the pound, now the dollar has almost the same value as the pound.
1x ADS is equivalent to 2x UK shares.
Even taking the exchange rate and the 2 for 1 situation we are rarely evens with the US. If and when it gets bought out the price will even up. Shows what a nonsense Aim is.
Each ADS is equivalent to 2 UK shares
Sorry to sound dumb but I thought if a company trades on US and UK exchange that the share price should be the same on both? Why is there a difference?
Might catch up with NY this afternoon, but at present there is a near 20% difference (if there is the ability to trade)
Hopefully open strong today and good volume, here's hoping :)
Moving nicely over in US
I do agree. I only invest in RENX because they are listed on Nasdaq. US got a privat healthcare and I think they more respect and value medical/biotech companies. If they won't be listed in US, I would expect the share price to be around 1p now.
Its a strange position in the UK where the FTSE is continually testing the 8000 level and yet the majority of PI's seem to be having a difficult time. The constant flow of funds out of UK equities does not help - and there does not appear to be a safe haven unless you opt into managed funds, bond, gilts etc which do not really suit typical PI's. I have holdings in various 'profitable' companies and they are also way below in value terms; although they are debt free and not in need to development capital which is possibly the point the pharma boss is making. Another 3.6m shares yesterday to the account of our convertible bond holder - this constant dilution is not good - 95m shares to 150m in less than 6 months. SB
This might be behind a paywall but the article is about another small pharma quitting AIM, calling the whole UK Market broken with funds wanting to invest only in profitable companies.
Https://www.telegraph.co.uk/business/2024/04/10/london-markets-broken-closed-pharma-boss/
Looks like this is sticking around the 30 mark until we get some Takeover news. I’ll take that.
This company has been doing the hard regulatory and clinical yards and is tantalisingly close to embedding its tests and IP into diabetic and CKD treatment plans in the US which is a huge market. The unknowable is whether they can access the market effectively and overcome the hurdles of suddenly needing operational scale. I think they will need a significant capital injection and operational partnerships. The sale process is one way of crystallising these.
The outcome I hope for is a JV with a distribution partner providing a cash boost to RENX today and a stake in the future profits of that JV.
There are no easy answers here - that's the reality of being a private investor on AIM. I don't think its as simple as to whether DB are smart or dumb - its what is going on behind the scenes that led to this transaction which appears murky. Why are they being allowed to pick up 10% of the company for $4m when as it stands Renx does not need the funding - that's a larger holding than Harwood/Mills - and their 10% holding cost a lot more than $4m. The company has made it clear the formal sale process may or may not result in an acceptable offer - and if not the company will continue in its present form. In the event the company ran out of money with no more funding available then it could go private via a low ball offer from existing majority shareholders or even a pre pack administration. I don't think that will be the case given the recent take up of new shares from the equity placing. The company is essentially owned by 10 major shareholders and its management - who have shown that when funding is required they commit, albeit the recent 'strategic' interest no doubt helped matters. PI's probably account for less than 20% of the shares in circulation so we are all essentially bystanders. The growing II interest is what provides comfort that we won't end up being shafted as they would end up in a similar position - DB Capital included.
One final point - the securities purchase agreement RNS relating to DB Capital includes reference to the funding being used for 'commercial sales' and to 'provide enhanced optionality' during the sales process just to throw some further intrigue into the debate.....SB
They have to follow the takeover code. It's the law.
Not up to the board to have a quick sale. They have to open up bids to the wider market. Anyone can bid. Shareholders have to vote to seal the deal once the process for bidding is completed. Why would any shareholders vote to accept a low ball management bid?
Not very transparent……but I doubt the recent investors expect to lose money so it is either
A) guaranteed profits from a quick sale for the new / participating shareholders
B) significant dilution of existing shareholders through a series of these transactions so that if the business is ultimately successful they take a much larger share of the spoils.
Answer me this, do we think
DB Capital is Smart or Dumb money?
And how much integrity does the Board have to act in the interests of all shareholders?
The funding issue has been apparent for a while…..arguably RENX should have raised significant liquidity (many years of expected outflows) several years ago, but it has almost deliberately existed with minimum liquidity for maximum control by a couple of shareholders who might not mind a low share price to take control.
I expect a knock down sale to the recent investors / management. - 40-50p feels about right so the Board can justify a transaction with a significant premium for other shareholders.
This still depends on test volumes…..what is the catalyst to unlock a significant increase in volume? Or will it never come?
The recent fund raising is perhaps sufficient to be able to demonstrate growth…..but then if that occurs why would you sell out?
Sorry - CVI Investment bond to date has been settled in shares, not cash....doh. SB
Yesterdays funding announcement came as a bit of a surprise, but is the latest in a series of what is now becoming a complicated shareholder/funding structure. Within the last month alone we had the equity placing to raise $10m at 20p a share (although at that time only $4m could be raised because of the nasdaq 20% restriction). So the placing was split into two - a first placing for 20m shares to raise $4m; and a second placing to raise a further $6m subject to a general meeting on 22nd April to deal with the Nasdaq listing issue. As it turns out, forward commitments to the second placing now mean a further $2m has been raised, taking the total under the equity placing to $12m. We know the take up was good amongst existing shareholders. Now, less than a month later, we are told that DB Capital Partners Healthcare are taking an initial 2.6m shares for $1m on nasdaq; with the option to increase for a further 8m shares at the same price (c.30p) to take them up to $4m. That's just under 9% of the business and would make them the 4th largest shareholder. The web site link for DB Capital looks like it was put together over the weekend; and good luck finding out any details on the 'founding partners'. How did this come about - did they try and get into the initial equity raise, miss out, and come back to be told told price was now 30p under a share purchase agreement? Who do they know that allowed this to take place. What drove the need to raise $4m so shortly after the $12m last month? Alongside this, anyone remember the $21m convertible bond fundraise in 2022 advised by Heights Capital. Turns out the fund behind this is a company called CVI Investments (channelling money for high net worths, trusts etc), based in the Cayman Islands, and represented by William Walmsley, Director who lives there. They now own 8.5m shares in Renx as a result of the company settling its annual interest coupon and capital repayments in cash. Its an intriguing picture to say the least given the current 'formal sale process' and I'm not entirely sure what to make of it all. SB
Kyborg, don't think that $2.75 is inconceivable - RENX has great potential, let's hope that potential gets fulfilled and the PI faithful get some decent return for a change. GLA
They won't sell before the LCD decision. That would be silly. They know that decision will attract attention and engagement from additional pharma wanting to bid. Chronic kidney disease is a huge market. Reducing acute kidney disease will be a real prize for big pharma especially if they can tie it in with a US healthcare plan, covered by US insurance. The healthcare industry will also save up to 35 billion dollars if they can achieve their aim to make acute kidney disease negligible.