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I just picked 100m as a significant number, whereas 50m is a bit underwhelming. My expections were we get to £5 which would take us to over 1bn market cap. But to get there, we need real revenue numbers. I know the real profit will come from EU, but the gov deal needs to be significant (it should be because this is a big deal). Ive seen too many sell the news moves, never thought of avacta as one, but thats how it has traded lately.
Hope you're right PAH00, but not sure CE mark has anything to do with it.
Sounds to me that GAD are using a third party contractor for part of their operations and ODX are not. I’m not convinced of the significance of these contracts in terms of the identity of the test developer - but it is significant in that matters are clearly still progressing and possibly about to reach a conclusion.
If I were the government, I would choose GAD over ODX - they’re driven by price.
They’ve loaned ODX equipment to reduce overheads in that £374m contract, diluting it’s potential share holder return.
Have these contracts been taken down now? I can’t seem to open them from the links here.
No still there (although once you have followed the link you may have to refresh the page F5)
Thanks Rolly - there has been no ‘news’ for nearly 6 months. Until CE lands, and we have orders arriving, it’s sentiment based movements that have driven us to this crescendo. Granted, test performance news has derisked the investment.
Any order will see investors develop even stickier hands, forcing the SP north. Regardless of the value.
Fascinating expert level stuff Rolly. I’m assuming you do this kind of analysis professionally?
Just to confirm, you think that £100m is good because it sounds nice, but £50m is bad because it’s smaller? You think the former will get us to £5, but the latter will see the SP suffer? So, the share price is currently on a knife edge due to a difference of £50m revenue? By the way, the market cap moved by £50m today...
my 6 pennyworth:
the contract is between The Authority & GAD
3.1.10 Test Developer to grant a licence to Mologic......
3.3 Supplier not the 'manufacturer of record'
If neither Mologic nor GAD, whose IPR is being licensed for manufacture?
Well we know Mologic have been working with 2 companies with IP. Affimers and Aptamers. I know which one I would bet on it being if I had to!
We’ve been working with Mologic for months developing AffiDx. Do you think conversations were not had on working with HMG? The relationship is clearly very good.
I don’t think the relationship would be that good if they had been lined up as sovereign behind the back of Avacta. Especially, as of the presentation, we were still in active discussions to use their manufacturing capacity.
I am saying the market sentiment will not be good on a 50m deal, we didn't wait this long just to have a little 50m fee. 100m is a better base to build a higher market cap off, as we know bigger deals will follow. 50m will just lead to a sell off, and we have to then go from a lower starting point. Which then feeds into the chart traders who will call 290 a top. Sentiment, momentum and real numbers is what is needed, 50m is meh, wont be impressed at all.
Rolly
Oh dear your numbers, you were good at Maths in Grange Hill but you seem to gone down the nick a bit since you started knocking about with Tucker Jenkins
We are proving our technology on the world stage, I don't think it matters £50m or £100m. Once the world sees we have the best test/technology on the market and it is being used in real life our value will soar.
Startup companies accept some contracts just to prove their technology.
The market price is based upon potential not just one contract.
If Alistair pinned potential on the UK government contact, yes I would be concerned but he has talked about European deals and that brings higher margin. We need a use case for technology and what could be better than UK Government.
The first deal(s) will be small as our initial capacity will be small. We’re not going to sign a deal for a billion tests if we can only initially supply at 5m a month. Chances are we’ll not know both the number of tests and the revenue anyway as that immediately means losing the ability to negotiate
Agree, it is based on potential, but we are already 600m+ MC thats not exactly a small unknown company. We have no idea what our margins are going to be, ODX have the same problem, noone knows the numbers. This contract is the first glipse of how much money all these companies will make. Odx is struggling because investors dont know how much profit they will actually make. I dint think we get to 1bn on potential alone, we will need numbers.
But we are not a one trick pony, look at the depth of other technologies we have. To me our tests were a revenue stream which avoid further placements. This company isn't about COVID tests alone. The market will see this and I would expect a substantial rise, we will win contacts all over the world if we remain the gold standard and this will bring years of revenue for an existing technology
For a company that’s just revealed £3.6m revenue for 17 months, you don’t think the current market cap will be justified when bringing in £50m for an initial contract with more to come, whilst also transitioning in to a clinical stage biotech? You think an additional £50m makes a difference? Deals starting to arrive will be a massive step for what was a tiny company.
Rolly - Avacta is not a diagnostics company, and not just producing COVID tests. It can’t be compared to ODX, not even on contract terms. They’ll be completely different.
The market does not rely on Twitter to value it. Thankfully. It’s value is based on a forward looking powerhouse.
Madness that people are expecting £8bn revenue on day one. You’re either investing, trading, or gambling. If you’re invested, you believe in the MCAP.
So for a tender of 1.4bn (odx and GAD) we only make 50m and you think the market will like that? I think we would struggle to go past the PT of 310p on that. Then we would need to wait for the next deal and based on AS record, i dont fancy waiting till xmas. Personally thought we would be a lot higher after the CV rns which is why i think, we are at the stage where potential is priced in, and now need the numbers.
Also interesting that Al has been moaning at length of time it's taken the govt to get it's arse on gear, this contract was signed way back in Feb. Al would have known it was signed. We (or I) thought he was moaning about how long PD took, actually he was probably moaning at the time being taken from organising manufacturing to them approving our test, and forcing us to pivot from our planned saliva.
Al met with Boris on 27/08/2020 to discuss scaling up mass testing, along with mologic and a few other players, such as Novacyt, optigene, who were just in the PCR space at the time. 8 months later and we're only now approaching the finishing line.
Full list is
Oxford, Nanopore, Mologic, Novacyt, OptiGene, LGC, Quantum DX, Avacta, LumiraDX, AstraZeneca
https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/958306/Rt-Hon-Boris-Johnson-MP-meetings-July-to-September-2020.csv/preview
None of those are now in the running imo, so I'm 99% certain the licenced tech is ours.
You better sell up first thing monday roly.