Ryan Mee, CEO of Fulcrum Metals, reviews FY23 and progress on the Gold Tailings Hub in Canada. Watch the video here.
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- Probability rapid covid-19 test is successfully released to mass demand:
90%
- Average price per test sold (bearing in mind bulk orders may be heavily discounted):
$18
- Cost of manufacturing per test:
$3
- Other costs per test e.g. distribution, admin:
$5
- Avacta % of profit share with Medusa19:
25%
- Number of months of mass demand:
36
- Average # sold per month of mass demand:
800 million
Quidel info as below, so this has to be at least the baseline for AVACTA - that would be my assessment of a successful outcome and would obviously be sufficient to get the FDA and CE approvals...
The assay demonstrated acceptable clinical sensitivity (80%) when compared to an EUA molecular device. The assay demonstrated excellent clinical specificity (100%). There was no demonstrable cross-reactivity with seventy-nine (79) specimens containing seasonal CoVs detected by the BioFire® FilmArray® Respiratory Panel (20-229E, 19-HKU1, 20-NL63, 20-OC43).
Interesting RD, have you got a reference? The recent broker notes pretty much just said they wouldn’t dare put a value to it.
By the way a large group of people have run a very similar excercise including the bit that models for risk (I believe the bean counters have a special course on it). They arrived at a current share price based on rates of return vs other options of £1.83. Problem being that next month the shares will be worth a lot more or a lot less since whether tests works is unproven. As the wise man at the top of the monutsin said " if I want warm feelings, I'll pis in my pants" not a doctor.
Quidel you say? +$6Bn Quidel? :o)
80% is a good starting reference point and given Sir Al’s confidence and the wonder of very small affimers, I’m very hopeful we’ll smash it
Probability rapid covid-19 test is successfully released to mass demand: 50%. Based on what works in a LSB doesn't always translates and I have doubts over LoD.
- Average price per test sold (bearing in mind bulk orders may be heavily discounted): £15. Based on webcast and belief governments will buy more then individuals. Profiteering will be met with legislation eg war powers act.
- Cost of manufacturing per test: £2. Again provided by CEO in webcast.
- Other costs per test e.g. distribution, admin: Difficult cause I believe is a fairly fixed cost rather than variable but let's go with 2x CoGs. £4.
- Avacta % of profit share with Medusa19 and Cytiva. 35%. Note I believe the Medusa test will be own label and Avacta have profit share.
- Number of months of mass demand: 12
- Average # sold per month of mass demand: Stated above (and previously) but test, trace and isolate means that multiple testing will fall off especially with phone apps reporting potential exposure. Therefore I think initial mass testing of 20 M in UK followed by about 1M per month for 11 months. This is UK only. Multiply by 10 for first world - say 330M tests total.
Hi Chengdo, I think we’ve had this discussion :-) I should probably check, but I think I went for 80% sensitivity being a useful indicator - but the lower % would have us struggling despite the convenience (Abbott territory), 90% being a game changer (in line with the ‘100%’ Roche test) and 95%+, well, I’d be taking a test to go and kiss Sir Al.
Yup, absence rates have been very high due to the advice to isolate with symptoms. This advice will change to isolate if you test positive with Ava-Gotit
Let's examine why the retail sector want to test, it's not so they can be nice to their employees, it's because they want to operate, even in warehouses they need staff, if someone is carrying it into the building they could have a substantial part of the shift off in a week, there will be a point that the cost of lost sales or goodwill outweighs the cost of the tests, and they'll try and stay on that side of the line. If it costs £1000 a week to test a shift and the cost of managing the losses in a shift is £10000 they'll be happy.
Abraham, tell us what you think likely sales volumes will be with your reasoning, it may provide some counter to some projections. I think 15bn is high, but we do have that odd product that is high volume & high margin, just potentially of course. I'm not getting that high, but certainly high enough to generate enough cash to fund the company until the other products hit market as technically they appear to work so the biggest problems are out of the way.
Hopefully that reads ‘2.9m in the UK only’, as in, then think globally. Not ‘it’s only 2.9m’. It’s the largest private employment sector.
Agreed Abraham, I tried psssing on this bonfire, but it’s smouldering too strongly.
The numbers are absolutely silly when you start thinking of potential, but it’s just that, potential. Yesterday we discussed airlines.
Let’s have a gander at retail.. Ocado ordered 100,000 tests and bear in mind it’s an online operation so less risky than others. They have about 15,000 employees. The retail industry in the uk only employs 2.9m. At the same ratio that’s 20m tests as an initial order for one industry. It’s mind boggling.
The other thing that’s missing from the below is the competition, they’ll turn up at some point. That’ll put pressure on margins, so I think the average selling price will fall fairly rapidly. The suggested RRP of £25 will also fall with multipacks, more than halve to companies and reduce further to govts. We might be left with a quid a test revenue. Still a huge amount.
After that mixed bag of waffle I’m not sure what my conclusion is other than margins will be squeezed, we’ll only have a proportion of the market but that the market will be so huge we’ll still earn silly amounts.
The important bit - If, and only if, the test works
Edit bit fail = big fall*
I know everyone is excited by the potential here but some of these forecasts are absolutely dreaming. If you genuinely believe we have a 95% chance of success and will make 15 billion PROFIT next year and then give two thirds of it away in a dividend then I think you are at best very naive, if you are doing it to ramp the share and attract rookie investors then that’s worse. I have seen this type of projections on so many shares and so far none have ever achieved them. Have also seen a number of sure things and no brainer drugs fail trials so anything can happen.
I bought in at 20p and then topped up at 60p and continue to hold but accept that at this market cap we are getting into the risky territory because if there are any issues or delays we are rightly or wrongly going to see a bit fail. Of course if everything goes to plan then the upside from here is huge. Although a caveat to that is that the market doesn’t always respond the way you expect even when things go well - have a look at the ncyt board - they are all very upset their share price has been falling even though they are selling huge numbers of tests.
Fingers crossed we do well but it’s better at this stage to keep your feet on the ground and be conservative, then hopefully we will beat expectations rather than disappoint.
Probability rapid covid-19 test is successfully released to mass demand: 96 %
- Average price per test sold (bearing in mind bulk orders may be heavily discounted): £13.50
- Cost of manufacturing per test: £2.25
- Other costs per test e.g. distribution, admin: £3.50
- Avacta % of profit share with Medusa. 19: 65 %
- Number of months of mass demand: 9
- Average # sold per month of mass demand: 40 million
Here we go! These are the inputs we need:
- Probability rapid covid-19 test is successfully released to mass demand: Agree binary, so model on 100% - if it doesn’t work then there will be a lot of hopes dashed!
- Average price per test sold (bearing in mind bulk orders may be heavily discounted): £12.... if the UK government ordered 68million if these tests and devised a testing strategy to have all residents test within a given window then we could potentially get close to eradicating Covid in this country for in the region of £800 million... given the covid borrowing is 2bn a day at the moment, this is a bargain for a 100% accurate test. At this volume, I would suspect they would want a discount of 50%!
- Cost of manufacturing per test: £1-£2
- Other costs per test e.g. distribution, admin: £2
- Avacta % of profit share with Medusa19: 60%
- Number of months of mass demand: globally, 12
- Average # sold per month of mass demand: Globally 50 million / month
Special dividend next year anyone of £48 per share (cost £10bn) with £5bn left to fund future cancer trials and increase the PhD headcount to develop future diagnostic tests to sell via Medusa19. Please note based on my guesses as to all the variables listed by cautious.
Scary just done the maths on my figures - 95% chance of £4.5bn from Medusa19 collaboration and £12bn from bulk sales - profit of over £15bn in year following launch.
Goes without saying..
But this next week could be absolutely monumental.
Probability rapid covid-19 test is successfully released to mass demand: 95%
Medusa sales - households/businesses
- Average price per test sold : £25/$30
- Cost of manufacturing per test: £1.50
- Other costs per test £8.50 (including marketing, Cytiva payment, fulfilment)
- Split say £7.50 Avacta, £7.50 Medusa19
- Number of months of mass demand: 12
- Average # sold per month of mass demand: 50 million
Probability rapid covid-19 test is successfully released to mass demand: 95%
Bulk sales
- Average price per test sold : £12.50/$15
- Cost of manufacturing per test: £1.50
- Other costs per test £1
- Split say £5 Avacta, £5 Cytiva
- Number of months of mass demand: 12
- Average # sold per month of mass demand: 200 million
@cautious - Great idea. I think that the model needs to be slightly more complicated as there are two very different strands to sales - sales to governments, multi-nationals (e.g. airlines, cruise operators), bill gates foundation etc where volume will be higher, price lower, costs lower and no medusa19 involvement and the direct to consumer market - lower volume, higher price, extra costs for medusa but share in their profit.
Thanks for doing this - most wouldn’t be arsed! And ignore those who decide to **** off whatever comes out of this! Hats off to you because it will be a really interesting and could be highly informative! Thank you
@cautious - Kbiz did this 2 weeks ago and came up with 3 quid a share. Be interesting to see what you come up with based on more up to date information that we have now. Look forward to receiving your post. Better than 90% of the dross we get on this board.
I’m pretty sure you’ll be comfortable at £10 :o)
Sir Al hasn’t released any commercial details so who knows. He’s very tight lipped, he must be negotiating some other deals...