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Note Dr. Cathy Fiatte & Dr. Lena Kastl photo
https://avacta.com/diagnostics/diagnostics-team/
https://avacta.com/people/lena-kastl/ 1 2024-05-20 07:57 +00:00
https://avacta.com/people/cathy-fiatte/ 1 2024-05-20 07:57 +00:00
GMCC importantly Lena is the MD of Launch DX Germany....this was a planned expansion country. Is this progress on that front? I hope so.
Yes Rambo Lena must see some merit in joining LD . Might still be future asset value to be gained , do hope so for all the LD/Coris staff employed . Seem have a wide range of proven IVD products to distribute & sell .
Be good they get a chance to make the business work and prove the doubters wrong .
https://avacta.com/diagnostics/
GMCC for me this isn't about whether DX works or not. It has been a misallocation of capital. The ROI of TX vs DX is chalk and cheese. Keeping it for longer doesn't resolve the wider optics on this. We have been heavily diluted as a result. The sooner DX is sold the better.
Rambo, if you end up with a division that's cash generative i.e. can cover heights in cash and provide additional funding for Tx, why sell? Selling doesn't reverse the dilution unless they bought back shares, which would be bonkers.
That's an IF of course. Still waiting to see if Tony had his calculator the right way up when he worked out it'll be cash generative in H2.
All depends if you think DX is a good vehicle to get Affimers better known/utilised.
Avacta has PreCision and Affimer tech which are up against big yet less effective alternatives right now. If the get a range of Affimer based tests out there this might help the tech become more attractive to Pharma.
DX doezn't have to be just a side show...abd eggs all in one basket is never a good approach unless a huge deal is struck based with the previso DX is dumped...
Too many unknowns right now.
PL75 - The argument for selling DX over the last 18 months hasn't changed. ROI in TX is a no brainer. We can't reverse the dilution now but it should never have happened it has cost all shareholders hugely. HCI and DX have only led to dilution and we borrowed money to buy a loss making business many never wanted but will show little to modest growth.
Keeping DX now weighs on the SP along with HCI. If people are worried about a low bid we have to remove the parachutes DX and HCI asap and move forward. Waiting until next year and selling for a little more for a business not in vogue is in my view a waste of time and money. Sell it for £20-30m now (even at a loss), reduce / remove HCI and be taken as a credible TX business. DX and HCI have been drags on the business for too long, been a factor in the SP being hammered down here. HCI is a traders play-thing each quarter. They have to go. Lastly they might have prohibited investment from II. I'm here for the big prize TX not the DX side show.
In summary the opportunity cost of having that £20-30m now boosts the SP and mkt cap far more than waiting until next year for DX to be in the black and doing very little. It is a seriously unexciting business which is why we hear so little about it and have not seen any prod dev progress. It is an easy decision. AVCT likely don't have the luxury of time before a bid comes so they must go all in on TX to maximise that opportunity which starts with getting a decent value assigned to the mkt cap before that happens.
@Bella re affirmers I don't think we have the time to get the DX business to monetise that. Affyxell more likely but IPO 2026 so it will still take time. If you think a bid comes in the next 12 months or sooner DX and affirmers hardly get to play a part of the show hence my view. TBC when we see the first move but with MoA proven a long time ago, Q2W data accruing daily what else do you need? This is no longer about the 6k trial.
You've ignored the point I made. You've called it a loss making business. The acquisitions weren't and aren't loss making, they appear to be once you've added in all the existing cr'p. IF, repeat, IF it's not a loss making business and generates cash, all you're doing is making another bad decision.
Selling Dx at a loss to clear debt leaves you in exactly the same position but without a cash generative business (that can cover heights in cash). I would never argue it was a good decision originally and I agree Dx is a distraction, but if you're selling for anything other than a healthy profit then your financial acumen is on a par with Tony.
Hights is £16m a year isn't it?
Also, I thought LD was profitable, Coris wasn't.
Plus I have no idea what we would get for them if we sold now. But I would be surprised if it cleared the remaining heights debt.
PL75 I didn't ignore your point I replied saying it comes down to ROI. Even if I retract the loss making comment to make this easier it comes back to capital allocation and ROI.
The first high level question to answer is would £20-30m invested in TX be a better ROI over DX? (the timeline could be pre DX purchase or now for me it is the same answer) If you agree the answer is yes then we need to remove DX.
Question 2 - Selling DX asap becomes an opportunity cost point. You either have £20-30m to invest in TX right now or you might have a little more in a years time from DX but that outcome is uncertain as is the timeline. What would you prefer? I would sell now as TX offers more ROI and the faster that can be deployed e.g pipeline the better.
Question 3 - Would you consider selling DX at a loss? Yes/ No? I would simply because the options to add value to TX right now across the platform etc are significant. Even if DX made a few million profit in a years time to spend it on paying the HCI dept is a waste of time and small fry. For perspective that same profit money potentially progresses a tumour agnostic asset 3996 towards IND filing immediately? Which has bigger ROI potential a DX business with £30m in revenue or a tumour agnostic drug that has multi billion TAM in its sights which also enhances the value of the wider precision platform being the second prodrug.
ROI every time on this DX debate.
Key point right now is that we don't need the cash from a DX sale to fund TX for 12-18 months. Would be madness to sell it right now if it would be at a loss. So, unless there's a clear path to more TX value thats being hindered by lack of cash, then we should wait until they have a chance to increase it's value through synergy and expansion. I suspect people might think we could progress more pipeline assets if we had more cash but I suspect the bottleneck could be organisational as it's not a simple process and requires involvement from multiple teams who are already busy and committed to projects.
My view is we sell DX in 12 months if we need the cash which isn't a certainty by any means.
WaG, you seem to be under the illusion that a sale of this complexity would take a couple of weeks to go through.
You think selling a house can drag on, well guess what it would be like selling 2 recently acquired companies and trying to get fair value.
Finding a buyer in this market, due diligence, negotiation, lawers, and finally, getting the money in our bank account with potential for a pull out all the way along and then to start the process off again.
If they are going to be sold I would bet the sale process has already started given the unknown aspects of all of the above.
The only route to a quicker sale would be such a bargain that it would speed the process up but that puts it in £10-15m bracket. (imo)
Selling off DX now might help put the funding/dilution question to bed and really get sentiment moving in the right direction again. In this event the cash runway would be extended to 2027 and the share price might improve to the 140's again. In this scenario I would then like to see a few smaller cash raises along the way at these levels to really consolidate the balance sheet - this time using PI sentiment, or institutional investors who are serious about this proposition, and avoiding AS's wonga contact list at all costs.
Wyndrum i see you are pulling out made up numbers again to suit your negative agenda.
Who’d buy, what is now a loss making business?
It’ll be Avacta having to pay another company to take it off them at this rate. The whole thing has been a complete disaster of the highest order. CEO only stepped down once the damage was done.
Oh no. Here comes more dilution via the CLN. 20p placing anyone?
A bit rich Gje given your previous post?
Wearegroot - I respectfully disagree. Agreed we have cash in the bank but the company have to keep the cash position looking as long as possible and move things forward. DX cash is a non dilutive option and would further add to the cash pile and allow a more aggressive approach to progress the pipeline. We have hardly progressed the pipeline on any front in recent years due to a lack of cash. This is at the expense of cash being in DX broadly speaking which was purchased using dept and we dilute in shares each quarter to buy a business that is not able to pay the dept in cash. DX will never provide a ROI like TX so keeping it for 12 months to see a profit is a bad call imo.
If you had a choice would you prefer DX being sold enabling HCI to be removed (making the numbers straight forward here) and we are sat at 100p+ or keep DX and and HCI for and sat sub placing? The optics of DX and HCI are so bad if removed the upside would be huge. If we see a low ball offer before we have got rid of these two parachutes it would be a travesty as they are holding this company back and SP back and might well cost us a lot of money on any near term offer as a result. Then you might regret the SP not being higher before an offer comes just because of the presence of DX and HCI.
Sell DX and remove HCI asap and perhaps we see some serious investors come onboard to support a TX business that is 100% focused on delivering Precision to the market for billions of pounds.
Rambo, I fully agree that flogging Dx and using that cash for Tx is absolutely the right thing to do, but with a caveat relating to the amount of money we'd receive. Assuming something near what we paid - despite expanding in to Germany and cutting costs - then that would provide enough cash to get through P2, get a product to market and we'd be a self sustaining business. At that point, pay off HCI at your leisure.
I do not agree at all you would use that cash to pay off any of the Heights cash immediately as there is no benefit to Tx and you're still in need of more cash to get through P2. If you absolutely have to, keep it in cash and pay HCI in cash quarterly.
Why would we sat at 100+p if we've just taken a bunch of cash for Tx and used it to pay off what is Dx debt? We'd be debt free, but the cash runway is limited and what's the option then - head back to Wonga for another painful dilutive raise?
Keep it and cover HCI payments or sell it and cover HCI payments unless you make such a whopping profit from the sale there's enough left over to pay off HCI entirely, extend the cash runway and maybe even enough for vol-au-vents and battenburg cake at the AGM.
Gje "Wyndrum i see you are pulling out made up numbers again to suit your negative agenda."
My apologies, when I said at the end "imo" that is shorthand for "in my opinion", which meant i was guessing.
However given what AVCT paid and they are still loss making, then a fire sale would (imo) have to be a big reduction on that original price. so wasn't completely plucked out of thin air.
Accept many here not impressed with Avacta Group management - delivery & execution - funding - diagnostics purchases , that can/will be fixed in due course .
It is not the current SP or more share dilution that is important to me but the amazing fact -Avacta have already achieved :
"The first of the pre|CISION molecules, AVA6000, has achieved clinical proof-of-concept."
"The Avacta pre|CISIONTM platform is a proprietary warhead delivery system based on a tumour-specific protease that is designed to concentrate highly potent warheads in the tumour microenvironment while sparing normal tissues."
This is what really matters & folks should look forward to ---- a win for cancer patients ,clinicians & eventually a huge payout for shareholders - as i keep repeating the value in the proprietary assets IP.
Meantime HCI Loan will continue to be paid in shares until a substantial deal is done that fully supports Therapeutics pipeline , then loan can be settled in full - Sorry might be more pain before gain , but will be worth the wait IMO.
Good luck everyone .
How times have changed. When the deal was struck the Pom Pom girls were saying “it works” look at the brilliant investment it’s drawn in. While others were shouted down for pointing out that it was in effect a loan not an investment. Just another example of the ppg twisting the facts to suit their hyped narrative.
Nothing changes.
PL75 just coming back to your points yesterday pm. If we agree DX and HCI are parachutes on the business solutions to them both are required. News of selling DX would rally the SP but being left with a CLN doesn't look great for new investors if they are going to get diluted each quarter. Also the debt is a large % of our mkt cap right now so the optics are terrible and would be priced in for any offer. There are a few options on how to use DX cash imo.
1. Extend the cash runway and leave HCI as is until a bigger deal lands then clear it.
2. Use it to remove HCI asap in sum or part. If a shortfall raise say £10m at a higher price
3. If the SP can be back at a level where HCI can be taken out at spot by a cornerstone investor & DX cash left on the balance sheet then great.
My preference is option 3 if achievable but option 2 if it can be done with the SP much higher than now (£1+)and quickly.
I don't mind DX cash being used in this way because the momentum that comes with removing a quarterly trading signpost that has had a hugely negative impact on the SP every time more so than the actual HCI payment itself has been self harming for too long. It also removes a reason for II's not to invest and we need the register to be adding II's especially if we expect bids at some point and want a positive outcome not a low ball offer accepted. Lastly my comments above are heavily weighted on my expectation that a deal lands before the end of the year extending the cash runway, removing any P2 funding concerns and next years going concern audit point. We need the house keeping done before that to look like a credible BP.
There is a list of potential near term news items that might finally enable us to move on from this chapter
- New Executive Director added to the BOD
- Management buying stock
- New Broker
- Sign Goldmans an advisor eg Goldmans
- A complete response is confirmed in the UPS patient by the AGM
- DX Sale
- Affyxell news
- Partner milestone payments - Point/ LG Chem
The list goes on. The tide changes soon.
Hi Rambo, thanks for replying. We differ on this one. I'd rather see option 1. For me it's just about getting ava6k over the P2 line as at that point deals should start appearing as well as sales and HCI is then not an issue. A miserable share price in the meantime doesn't bother me if the end result is improved. All we need is cash to get to approval. I appreciate it leaves us in a vulnerable position for a cheap takeover, but I'd imagine the share price would respond rapidly if interest was shown as I'd imagine there'd be more than one interested party.