The latest Investing Matters Podcast episode featuring financial educator and author Jared Dillian has been released. Listen here.
London South East prides itself on its community spirit, and in order to keep the chat section problem free, we ask all members to follow these simple rules. In these rules, we refer to ourselves as "we", "us", "our". The user of the website is referred to as "you" and "your".
By posting on our share chat boards you are agreeing to the following:
The IP address of all posts is recorded to aid in enforcing these conditions. As a user you agree to any information you have entered being stored in a database. You agree that we have the right to remove, edit, move or close any topic or board at any time should we see fit. You agree that we have the right to remove any post without notice. You agree that we have the right to suspend your account without notice.
Please note some users may not behave properly and may post content that is misleading, untrue or offensive.
It is not possible for us to fully monitor all content all of the time but where we have actually received notice of any content that is potentially misleading, untrue, offensive, unlawful, infringes third party rights or is potentially in breach of these terms and conditions, then we will review such content, decide whether to remove it from this website and act accordingly.
Premium Members are members that have a premium subscription with London South East. You can subscribe here.
London South East does not endorse such members, and posts should not be construed as advice and represent the opinions of the authors, not those of London South East Ltd, or its affiliates.
https://www.fda.gov/media/151527/download
OMG, what a fiasco this is
This is a nice catalyst - some steady buys will certainly get us going and get some sentiment back
Latest coverage by Calvine Partners
https://www.calvinepartners.com/post/diurnal-group-efmody-s-commercialisation?utm_campaign=33c9396a-a320-4810-b073-7489e38374d9&utm_source=so&utm_medium=mail&cid=361b0d21-3561-415f-8921-1bcc20e4c532
I think it may be coming sooner than we think
Does anyone see a catalyst for this stock in the near future?
Thanks Hun Sen,
You have a unique ability to see things from a different perspective and that truly is a credit to you. I have learned a lot about perspective and DNL just by reading your posts.
If I can chip in my two penneth, that is to say that the addressable market here is extremely small and hence it will struggle to yield significant turnover yet alone profit whilst current circumstances persist.
Regarding share issuance for senior management, whilst nobody can deny the achievements here which are exceptional, we would do well to remember that any such benefits are subject to income tax and likely high percentages too. Whilst the SP is shall we say bound by circumstances , it is not helped by issuance and the inevitable selling that ensues come the 31st of July as one would presume none of the board have stacks of cash hanging around to pay tax bills. Indeed, this is a common theme for developing companies but a strong SP is key to balance things.
ATB
Yes, terrific post - thank you for going to so much trouble
Fantastic post hunsen
Going back to Alkindi, I previously looked at USA, UK, China and Europe.
The rest of the world would be around 85,000 additional CAH cases in kids.
Cash and equivalents is now £34m (20p per share), this has been earmarked for the following;
- funding the Phase 3 trial in the US for Efmody - this should start in Q4 2021
- extension of Efmody for AI which is a much larger opportunity
- development of DITEST
These studies take time, I'm sure the institutional investors are applying pressure to the board to control costs and deliver the expectation (in this update) that the current cash balance will fund DNL to profitability.
The current market cap of £100.5m, is £32m LESS than DNLs peak valuation in 2018. If all things were equal, the share price today should be 78.5p - but things are far from equal, DNL
- has twice as much cash as in 2018 (20 pence per share to fund development)
- DNL has Alkindi approved in all major markets and it is generating revenue
- has Efmody approved in Europe and the UK and will start generating revenues 4 x faster than Alkindi
- has the funding to get Efmody approved in the US
- has DITEST in the pipeline
None of the above was in place in 2018.
I'm not so good at sum-of-the-parts valuations, but this company appears to be exceptional value.
ALB
Hi Scored, All,
I will try to post some thoughts on progress during the day today, although I do need to go out shortly and will resume later.
Keeping things in perspective, this statement looks back by up to 14 months, i.e. trading from 30th June 2020 to 30th June 2021. Think of where we were then in terms of covid and lockdowns. We actually passed "freedom day" after this period - and STILL my GP waiting room is in the car-park under a small tent!
Remember also that Alkindi was only approved by the US within this time (30th September 2020), the challenge is to switch patients from the existing treatments to Sprinkle, in a pandemic.
As a rare disease, I estimate there are around 10,000 cases in the US amongst kids, perhaps 1,500 in the UK, 25,000 in China and 22,000 in Europe (plus the rest of the world). I estimate the annual revenue per child (Alkindi) is around £3,500, so revenue would suggest there could be around 700 patients - so we have accessed just 1.2% of the market in the above countries. Providing patient outcomes continue to be positive, awareness of Alkindi should grow very fast amongst GP's and parents.
The statement said children born with CAH are going straight onto Alkindi, I believe this will be around 600 new patients per year generating revenue of £2m per year (compounding), so in 5 years this will be £10m from births alone. Add GP's switching patients and the 2022 forecast revenue of £11.2m doesn't look unrealistic.
Remember - the above is only Alkindi.
Chronocort / Efmody has only been approved for sale for ONE MONTH during the reporting period. Sales are expected from Q3 and CAH in adult is a far larger market and the outcomes on Efmody are much for patients.
Think logically, we had £2.4m in sales from Alkindi (in a PART year), and Alkindi is used to the age of 17, then Efmody should generate sales 4 times faster (assuming average life expectancy in these patients of 68 years).
PLUS managing the condition in adults is more complex and Efmody provides a key advantage over the competition in supressing harmful androgens.
So, if my ASSUMPTIONS are close, then Efmody should generate at least £9.6m in sales during the first year, which means Alkindi should easily push DNL through the £11.2m revenue forecast for 2022.
I will try to post more later.
ALB
Calvine take on the update.
https://www.calvinepartners.com/diurnal-group-fy2021-trading-update
Hi Scored,
I'm working right now but on the surface, I agree with Albinio. The fundraise cash will be needed to get them through the US trial which I believe will take 18 months or more.
I will take a further look later and may post some further thoughts.
ALB
skimming through pretty much as expected, Alkindi take up will be a grind while covid restrictions are in play, but still growth in key markets, plenty of cash and really it is about roll out of Efmody now and Alkindi sales growth with less covid drag to underpin the SP, while we await updates on pipeline treatments (most notably Ditest) and regulatory progress (most notably for Efmody in US and Chinese progress). Good to know some Milestone payments have come in and more due once the Orphan Status is granted for Alkindi in the US.
30 million in bank they should of waited to share price was a pound and less dilution for us they did not need the last placement
Rns thoughts please not that impressed
Rns’s
How many more of the RNA’s is it going to take to even get a 5% gain
This is how I understand the LTIP - I may well be wrong.
The LTIP awards service if certain goals are met, these are the goals (I now see this relates to an earlier LTIP);
Raise sufficient financing to fund the Group beyond Chronocort approval in Europe (DONE)
Complete a minimum of one licensing deal in either US, China or Japan (DONE)
Ensure that the Group is on track for EMA positive opinion in Q4 2020 to enable commercial launch in Q2 2021 (DONE)
Exceed forecast revenues by 10% or more (Not sure of this one!)
The Management Team have delivered on the above (not sure on revenues) so they deserve to be rewarded.
I think we all agree the Management Team consistently deliver their goals, the tax bill for this award will be significant but they are then tied in to the award shares I believe.
The next LTIP is the one that includes the 100p price target - as I said, this is an earlier LTIP.
I'm quite comfortable with this now.
ALB
Morning Scored,
it's not unusual for management to sell some shares to cover some exceptional costs but you are right, the CEO earns £262,500 and the CFO earns £210k.
I am more disappointed that they management team has so little skin in the game, DNL market cap is £109m, the CEO is holding around £637k worth of shares (0.58%)
Richard Ross (CSO) has a more significant holding worth around £1.4m (1.34%).
But, what is interesting about this RNS is that it relates to the Long Term Incentive Plan (LTIP) which was announced in December last year.
I struggle to understand exactly how these arrangements work, but I believe there is an option to pay income tax in advance (this minimises the tax bill on future capital gains)??? Why he needs to sell shares to meet the tax bill, I'm not sure - but assuming they are issued on meeting the LTIP criteria of 100p a share, then his tax bill could be at least £146,700 on £326,000 of shares. When you consider his salary is taxed, his take home pay could be around £150k - perhaps this explains it??
The more important point is that we haven't yet met the 100p criteria. I believe the LTIP is still aligned to our interests - and after doing this digging, I am not too concerned.
Is there anyone here who understands LTIP arrangements who could better analyse this situation?
ALB
Martin Whitaker and Richard Bungay have informed they will sell sufficient shares to pay tax liability on vesting shares fk me don’t they get paid enough to put there hand in there pocket . Imo they are overpaid !
Hopefully we will see some upward movement this week then. We have had a fair few decent rns’s but it appears the placing is still holding us back somewhat. How was level 2 looking on Friday?
Now cog has runaway it’s 185 unbelievable and dnl is 64 why I compared as one of our board I’m sure is on cog board
All still relevant HunSen - the AI opportunity is substantial, but the timescales for that, US Efmody approval and Ditest progress is probably why there is not much PI attention around Diurnal at the moment, the big ticket news has gone for many I guess (FDA Alkindi last year and recent Euro Chronocort/Efmody approval) - so maybe lacking some snap, crackle and pop.
However I still think with some positive news around progress for AI studies/regulatory processes, some ditest updates, clearer info on China progress and general sales traction for the existing approved treatments there is still some steady near term upside possible here and the downside should be well underpinned going forward (i.e. heavily derisked and still offering some near term potential with some medium term blockbuster gains possible with the right progress)