Adam Davidson, CEO of Trident Royalties, discusses offtake milestones and catalysts to boost FY24. Watch the video here.
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Yes, well put. I need to keep reminding myself of the upside, and that is two very good explanations of it.
Thank you shandy and GoldenDust.
Good points. US launch is an easy milestone to meet. More milestones like that please! Tim pumped price on the fact a US deal would be signed, and then paid the price when it didn't materialize. From what I understand, the 30p placing should have been 40p, right up until the last minute, when they were again naive. The fact though is that for anyone who has looked at the fundamentals of the drug and its competition in the market, and taken into consideration the fact it already has broad approval in the US and Europe, it is a no-brainer that this will eventually be a billion dollar company. That might not have been possible with a US partner. With self-commercialization it is a very real prospect. The potential upside is so much greater. So perhaps we should be thankful for the way things have played out.
i think CEO is quite a cautious person so has never committed to an actual date for US launch, hence the Q2 2021 timeline.
I did question this and he told me he was reluctant to be more specific as a week or two delay would be poorly received and clearly there area number of moving parts that are sometimes out of your control.
IMHO the Q2 date will be met but what does launch day 1 actually look like?
Undoubtedly not every salesperson will be recruited on day 1 - this is pretty standard. They have identified 100 super prescribers , surely they only need 4 or 5 people to contact them.
Similarly they are undertaking some marketing to increase the product awareness. Not all of this needs to be ready for day1.
For me the big date is when revenues start coming in and i suppose that cannot be guaranteed, hence the vague dates.
What STX need to avoid is a poorly worded update though as any perceived delay will not be well received.
It would have been sensible to use that wording in the original. But changing it now ... sigh.
Exactly my thoughts also. Then the new wording at the bottom of yesterday's rns saying 'during 2021' - what is the matter with them... as you say, it's all self-inflicted.
The former CEO was the driver. Tim filled vacuum when he left. There was so much interest from US companies in a deal (and a deal was just ink on paper away from being done on at least one occasion) that it was almost inconceivable it wouldn't happen. The mistake that was made was letting the market know this and putting a "deadline" on it. That was entirely unnecessary and so everything that followed -- including the 30p debacle -- was self-inflicted. You would have thought the lesson would have been learned. So why on earth give yourself a June deadline on US operations when other factors could intervene to delay a few weeks, a month, or two?
Interesting insight - thanks.
The replacement is a bit iffy though also. Really hope he delivers on the promised June timeline as promised ...
Hi Shandy - I've been in this share since day one. The 2017 dip was due to a failed trial. It was later discovered that doctors in the trial were topping up iron for some participants on the control side, those patients were eliminated from the study, and the results were confirmed as positive for the drug. But the fail had immediately been released to the market, as required, the share price had tanked, the damage was done. There was no way back. Prior to its Aim listing, Shield was tantalizing within couple of days of a main board listing when the markets crashed and funding disappeared. Things would have been very different with a $300m+ valuation on listing. The former CEO's favoured route to market in the US was always self-commercialization, but the VC blocked it at every turn. That relationship was never good after the initial funding round. Follow that through to last year's admin slip in the head-to-head data release and the mechanisms behind the departure of the former CEO last year can easily be deduced.
I hope this is just me being pedantic, but noticed this at the end of the RNS (note phrasing change on date - why not just say June 2021 as previously stated) ?
Shield's lead product, Feraccru®/Accrufer®, has been approved for use in the United States, European Union, UK and Switzerland and has exclusive IP rights until the mid-2030s. The Group plans to launch Accrufer® in the US during 2021 through a highly experienced sales and marketing team.
They have just potentially added up to 6 months to the launch .... GLA.
Thank you x
Agreed, shandy - the US update by mid-May is crucial imo as this is the first deadline given under the 'new umbrella' so to speak. If it fails to materialize promptly, I will be concerned of old habits resurfacing. With luck, it will be the catalyst to instigate the recovery process.
Deeno It's required by the LSE (the London Stock Exchange!!)to confirm the number of shares in issue, from which, by multiplying by the share price you can work out the Market Capitalisation (ie the perceived value of the company).
Hi can someone explain what the rns means ?
Dave - as a fellow LTH it's impossible not to be concerned with the current CEO.
However, i think the US operation almost takes care of itself now that we have a core US managerial team in place.
Also based on the companies own revenue projections, which are quite conservative IMHO (i've spoken to Tim Watts re this and he agrees but he's naturally quite cautious being an accountant by trade), then even 50% of the 5 year revenue target will make this a £1bn company.
Shorter term we need to start selling though (so mid May update is crucial) and get to cash positive within the announced timescales (15 to 18 months). I also think this date range is quite conservative but probably best to be cautious on this one.
Incidentally re share i remember last March/April when STX announced they'd mucked up the H2H end point the share dropped to c50p (also covid sell off). At the time i thought this was massively overdone as it was mainly an admin error, the results were still positive. So i bought a few (more). A few weeks later we had a 40% one day increase (50p to 70p) and a week later another big day to get it back over 90p. There were no RNSs to trigger this. I suspect we might get a similar move in the next few months when people realise the US operation is in place.
Great summary shandy - thanks. I'd seen a sequence of sharp drops and saw corresponding RNSs in the timeline. Bought in at 38p simply on the basis of intending for a 50-60% rise and then sell out. But the more I see of the potential, the more I am like Sambar and just thinking this is worth tying up 10% of my portfolio for a year.
Current MCAP/price is a steal compared to where it's likely to be once results inspire investor confidence. Buy when others are fearful, etc.
Good stuff, shandy - only trouble is old damaged goods will be making the announcement in a fortnight or so! Hopefully anyways, unless he's just tugging our chains again as per the whole of last year.
Sam your timing is fantastic - 33p must have been right at the bottom. Anything under 50p is a steal.
STX has had a strange few years - much of the ups and downs are based partly on sentiment.
There was a placing a few years ago (2017 i think) at 150p a share (before FDA approval) and afterwards STX tried to market and sell feraccru themselves in Europe. This didn't go well so they signed a commercial partnership with Norgine. Due to sentiment the price dropped to 40p. Things picked up and clinical study results were good so FDA approval was less risky. Before FDA price had risen back above £1 and after FDA it went up to c190p (late 2019).
2020 was meant to be the year of growth and Chinese deal was signed in early 2020. However, the much expected US deal never materialised despite STX saying it was almost nailed on.
This was confirmed in Dec 2020 when price dropped from c110p to c60p.
STX then said they might go it alone as sales process in US wasn't rocket science and profit to STX is massively higher.
However, a placing would be required. Clearly golden rule is never say you need a placing until you've done it so price dropped again.
In the end it was discounted at 30p so share price dropped accordingly.
However, hopefully all the bad news is out of the way now.
Market is still not convinced that STX can go it alone, however, they have taken 4 directors from a competitor so risk is much reduced.
Also, CEO is now damaged goods as you can't say you are confident of a US deal in mid Sept and then a few months later say oh sorry it didn't happen.
A positive update in a week or so should see sentiment start to improve. When it does this could rise quickly. Company's revenue forecasts seem quite conservative IMHO
i notice 2 large buys have just gone through (50k and 51k shares) so it looks like positions are being taken . On HL i can't buy a bean ATM.
We all know there is much upside here if US sales kick off (STX was worth £200m in 2019 based on a potential US deal) and taking the 4 US Directors off a competitor massively reduces the risk of failure.
In year 5 STX has stated US revenue estimated are $300m to $400m. At the lower end that still generates $225m net profit.
Based on a PE of 15 that's a valuation of c£2.5bn for STX (excluding Europe and China).
So let's assume only 50% of this profit. Well that's still a valuation of over £1bn and a £5 plus share price. So a 10 bagger if they do 50% of expectations.
The new Astra Zeneca CKD drug getting FDA approval will massively help too.