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Hi TechTonic,
Started writing a long reply to your post, but too long for my phone!
A few key points. I re-read Aug RNS . Ciz has never stated they have started clinical trials. The Aug RNS states that recent development "meet key milestones to begin commercial clinical trials" , not that trials had started. Specifically, the key milestone was that they could get it to run on an automated platform. It goes on to say ciz is "now engaged in clinical trials *design*" which actually indicates they haven’t started. This subtlty was discussed on the board at the time , though I'd forgotten about it.
Trials have to use same prodction reagents they will use for real, so same manufacturing, handling, transportation protocols. Allan does talk about the work needed for this in the Aug Stockbox interview.
Sounds to me like we've assumed trials had commenced without appreciating the work needed for the reagent production. I am guilty of this, as i expected trials had begun.
I don’t think we have run any formal trials at all yet. No evidence at all that we have run trials and they failed. That is complete supposition on your part, perhaps negative confirmation bias you night say?
Indeed, spending all that money on scaling up suggests to me they have used these reagents that have been developed on some internal trials and they work. Otherwise why proceed to scale up and incur that cost? Supposition on my part, but seems like common sense.
Existing investors have just stumped up £600k. Would they do that for a random punt on whether these new reagents would work?
I have questions over why we raised this way, but it actually speak of confidence that existing investors have chosen to stump up more cash. Also interested to know who the new investor is, though it may not be significant. If its BioTechne on the other hand...
Re Biotechne. Still time for them to be involed. Again, no reason to assume we've changed at platform at all.
Why would we? Its one of the best and worked sufficiently well in trials for them to RNS it. We will need partners for a point of care test. That is the really big market and Biotechne would be good here.
Proteogenix. Could simply be the best company to scale up. Again, no suggestion here that they have gone elsewhere because something else has failed.
My problem here is that ciz is not communicating very well at all. Especially the stages and timelines that need to be gone through. My jolt in confidence from the last RNS was around the trials not having started, but having re-read RNS , unless anyone can find anything to the contrary, i dont think ciz has ever said they have. But they have been unclear about the steps, sequencing of those steps and timelines!
It really wouldn't take much to get this share moving again. If we really are just requiring scale up, re-run of trials, accreditation and a charge code, then we are not too far away. Question is, is there some other steps ciz has omm
Hi again Green..I've had a re-read and think.
Imo, with voluntarily or involuntarily confirmation bias, you’re giving Ciz lots of leg room, maybe shifting your own views a tad to fit the prevailing info (ala shifting sands I mentioned - you may not realise you’re doing it)
We were all extremely happy with “in the market in the near future” and gave it weight; now you’re retrospectively putting “context” on it and giving AS lots of leeway ( although bio-tech timelines are different to real world). However, you can’t have it both ways to fit shifting disclosures by Ciz.
Reagents - your take on it is “refinements”, but that is not evidentiary based, just giving them the benefit. Refinements to me means - in context of “clinical trials being done”, it DIDN’T work. I’m surmising here, but I think the sensitivity data on scale-up was poor. You can’t assume by changing the source that this will improve. It could be an intrinsic problem. (It may not be - but you’re assuming to the positive - of it purely being “Comms”. “Reading too much into it” is a subjective feeling.
China - something that was once pivotal, almost a Raison D’etre for some , is now “couldn’t care about China”.
Now, I completely understand that you don’t care about China, but a cohort on here (Jace et al) used this to prove-up their £££s valuation with £100Millions/ year.
The (possible) loss of China reveals something not simply of monetary value itself but the institutional naivety of Ciz. They spent so much time developing that ‘relationship”, flawed from the start IMO (got to understand Chinese mentality). Now it’ not a deal, but that’ ok??
This, in itself reveals the weakness and possible gullible nature of the BOD.
All these things cannot and shouldn’t be taken in isolation; they build a picture.
It’s the investor who has to try to see that picture clearly, without bias. Hard when money is invested in something you want to succeed.
But ,again, the most important element is that if you cannot trust what they're saying, how do you ever trust what they're saying??
Green, thanks v much. On first reading fair points, but will read again, digest and reflect
Part 2…
5) Is Biotechne still involved..to what degree? Ciz is so shoddy with communication, anything could be going on.
Most people - me included - wanted a bigger tie-in with Biotechne. It hasn’t happened.
(DG) Agree, wanted them involved for scale so we were closer to an IP royalty model rather than the OBD scenario - is currently unclear re Bio-Techne.
6) China no longer in the picture it seems. I think my first post I warned of this to much derision. Why? - again NO update from BOD. Nada! Investors seem happy to go along like it’s all fine!
(DG) Personal view - couldn’t care about China at the moment. More than enough to keep them busy in US - scale of opportunity is sufficient there alone. Mail that, then worry about other markets. Would be more concerned if China did pop up given they aren’t juggling existing commitments brilliantly.
7) Not using drawdown. Not selling CDT shares. Probably mates rates for a raise. Awful - again. Trust?
(DG) I don’t think CDT shares were ever going to be sold in ideal world - he had mentioned a long while back about building an asset base of these devs. On the shares, I think the discussions on funding would have been going on for weeks, and the climb in SP in the last 2 weeks was problematic, if it had hovered around 2.2p wouldn’t have been an issue. Climbed on expectation of news - comms again!
Evening TT…I’m sure Neil will reply later, but he tends to do the night shift, so thought I’d chip in with my thoughts :-)
1) Allan Syms with “market in near future” quote was either naive, optimistic or willingly deceptive. (Any one of those is bad trait for a leader of empirical science).
(DG) I think this was an off guard comment given it was an internal call with scientists, I think very near term can be 12 months with that audience. However, if there had been better dialogue with shareholders we would be clear on timings rather than relying on inference.
2) Last year he said we were about to start clinical trials, but this was patently false. (Again, deceptive, naive or optimistic)
(DG) I think probably naive, links into your point 1) if steps are known and timescales, these issues don’t arise.
3) The Portugese reagent company - supposedly the best - is out of the picture (with no RNS) and a French company ‘suddenly’ involved. (With no RNS).
The obvious conclusion is there’s probably been problems (of nature unknown). That’s a fair assumption, no? (Again, no communication from CEO, so assume negatives)
(DG) I think there is way too much being read into this. There will have been a period of refinement of the various consumables and processes. We know it works on the protein simple platform, they know it will drive accurate results otherwise we wouldn’t have got to this stage. You aren’t getting folks to stump up £600k or getting Bio-Techne signing RNS statements without knowing there is a tick there.
That testing will also had to look at sensitivities around shelf life, cold storage etc… and among that different mAbs. Again, I think this comes down to comms, rather than anything sinister. You can’t just pull these off the shelf. If they wanted to change something that they think improves sensitivity, resilience etc… there’s a process of gene synthesis, sequencing, engineering mAbs etc… time for this could be anything from 4 weeks to 4 months. It sounds like they have now got to a final commercial solution here. Add to that the question around capability, commercial scale etc… I’d expect deck chairs to move in that process. Having said this, if they had advised the longer part of the process is finalising mAbs, establishing them for scale, rather than folding that into a generic clinical testing narrative, folks would understand it more. Equally if in the RNS they’d stated they chose Proteogenix over Bio-Techne or Fair Journey because of X and Y, that would have been acceptable - back to comms again…
It's a tipping point for many of us ...from giving the board the benefit of the doubt to no longer being willing to do so.
They should expect a much tougher line from investors moving forward and be prepared to provide the information we need.
We have a lot of reasonable questions and they need answering.
Some open questions. What if:-
1. any delay is due to widening the scope of the test to make it more valuable?
2. one set of clinical trials has been done, but we didn't like the results, so are optimising to make it more valuable?
3. points 2 and 3 are linked i.e. CIZ tried to use the same test on different cancers but identified a different reagent would be preferable?
4. progress is being made ('scaling up' 'commercial' 'insurance codes') but folk are just impatient and don't realise how long the process takes?
Unless you have sector experience (I don't) and /or an inside line to the BOD (I don't), it's all guesswork. One thing is certain, AS is playing his cards close to his chest. I like the understated approach. He has a good track record, so I trust him to deliver to the best of his ability. However, I understand that other folks may have lost trust, and that is a personal thing for them, and it is hard to regain once lost.
Neil, I sincerely enjoy your excellent intelligent posts and admire the time dedicated, but I wonder if you’ve lost objectivity?
Cognitive dissonance is a powerful force.. leads to self-justification in the best of us. That shifting sand analogy I used can carry investors to a place they don’t recognise without awareness of change.
So, serious questions, if I may:
Could you please explain your thinking behind “believing’ in the final outcome when:
1) Allan Syms with “market in near future” quote was either naive, optimistic or willingly deceptive. (Any one of those is bad trait for a leader of empirical science).
2) Last year he said we were about to start clinical trials, but this was patently false. (Again, deceptive, naive or optimistic)
3) The Portugese reagent company - supposedly the best - is out of the picture (with no RNS) and a French company ‘suddenly’ involved. (With no RNS).
The obvious conclusion is there’s probably been problems (of nature unknown). That’s a fair assumption, no? (Again, no communication from CEO, so assume negatives)
4) With Reagents not even verified at scale-up - and clinical trials posing another unknown, the permutations are unknown. Where is the foundation for staunchly standing by your ‘belief’?
5) Is Biotechne still involved..to what degree? Ciz is so shoddy with communication, anything could be going on.
Most people - me included - wanted a bigger tie-in with Biotechne. It hasn’t happened.
6) China no longer in the picture it seems. I think my first post I warned of this to much derision. Why? - again NO update from BOD. Nada! Investors seem happy to go along like it’s all fine!
Blinkers off, people !! It’s huge and, indeed, the main Market reason some people invested! The Avuncular cuddly AS probably eaten alive over there.
7) Not using drawdown. Not selling CDT shares. Probably mates rates for a raise. Awful - again. Trust?
8) Don’t you agree that the direction has appeared to have changed? The tone? Material things? Timescales?
Without knowing the full context / picture, how can you remain confident with duff data and disingenuous company statements. I don’t understand the basis of your belief, apart from “It will all be ok in the end”…which isn’t an argument based on the facts.
One of the main rules of investing - divesting - to me is simple:
When companies start lying/ being liberal with truth on promises/ timescales and progress, it's usually time to , at the very least, question your investment, or get out.
The awfully nice Allan Syms does not impress me, and after that shocking RNS plus the antecedence regarding communication with Ciz, I no longer understand my investment.
Do you? Really?
Ps Brondby/ Green especially. Also love your thoughtful posts.
For transparency, I sold 2/3 of my holdings after that diabolical RNS at 10% loss yesterday. That RNS was the pits. Very disappointed.
I’ll keep 1/3 and assess