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I think there’s foul play going on behind the scenes in all aspects of business. Though when company is getting desperate they shouldn’t push their luck, it would be excellent for sentiment if they said they’ve managed to reduce monthly cash burn buy sourcing more competitive suppliers or anything to reduce the costs… unless they’re absolutely vital to the running.
Sally, I know how tempting it can be to jump into another stock when the stock you’re in crashes and when sentiment seems so low. I used to do that all the time, for years. And almost every single time the original company ended up flying back up, and almost always I lost more money in the shiny new stock that seemed to be a no brainer in comparison to the seemingly hopeless and down stock that crashed. So I’m definitely not selling genedrive to buy another stock lol. I’ve also never seen sentiment so low in this company, and I know if I wasn’t already in it I’d be seeing this as pretty good buy at the moment… which is indeed why I’ve been buying more. The placing was my big worry and now that’s done, I see mainly upside …and from this level it could be a pretty big rise. I keep reminding myself also that the Genedrive deice is their main product, the high throughput Covid test was a surprise opportunity which in fairness they developed quickly. The mistake was expecting the FDA to continue approving large numbers of tests, the reality was after the initial mass EUA approvals in the first few months of the pandemic they slowed right down. Of course though, I can’t understand why they didn’t just reduce the cost and sell it cheaply to Divoc. I keep thinking about this, there hasn’t been a good explanation. We also haven’t been updated how many tests BC have actually sold, and whether they’re still trying. Presumably they haven’t given up as the test is still all over their site. Who knows!!
But at this price i think it will soon start to look attractive again.
Jimi as i said there is some foul play going on behind the scenes. I suspect some of the "supplies and services" are being purchased via intermediate companies at inflated costs, where Budd and other BOD are silent partners. The rest of the staff on the company will be on moderate to average salaries, so does not account for the cash burn.
We have a Chief Commercial Officer that is nou doubt on a similar salary to Fowler, but has commercialed sweet FA during a pandemic. The whole BOD needs a clearout.
Jimi: with all The news materialised, we should see around 50p and then slow drift until some sales news on those products.
I have my doubts on SP reaching 87p in near future. It will still be a bit short from breakeven of 89p for me.
The question is whether I can get 400% rise anywhere else..
I am more inclined to move some of my money to ODX etc as they are due some news soon and then jump back in or move it again to HYVE/NEX and leave it there for a year. Better chance of recovery there especially in HYVE once all the conferences start happening. At least They are not in need of additional cash and may end up being bought by some Chinese investments. I believe that there will be lot of FTSE businesses targeted by these foreign investors over next 12 months.
Just a thought...
Dave - as I have said, they have not once addressed overheads, instead ask for more money to commercialise products.
Well, if I was 100% committed to my business and its success I would either forgo some salary, reduce overheads and also consider salary to shares options.
I have also seen we have a Chief Commercial Officer - So we have so many ppl focused on commercialisation, together with partners and external distributors!!!
It’s a bit more than just a room in Manchester university, it’s in the Incubator building…
“ The Manchester Incubator Building is a state-of-the-art biotechnology research and development centre combining the latest in laboratory facilities with an excellent infrastructure. This combination of an exceptional building resource with a commercially and academically supportive company offers a unique package for biotech start-ups, R&D satellites from pharmaceutical companies and service based companies.”
https://techmanchester.co.uk/hubs/5y8qy0l
But still, I agree their salaries are way too high… and I’m not sure where 400k a month is going. Seems to be a similar situation with most AIM companies though.
It will be interesting to know if the IIs that took part in the placing at 80p also participated in this latest one , if so then you would feel they have been giveen the nod about something.
Pacman/Sally, it's not even an office, it's just a room inside Manchester University where they are based. £400k a month is eye watering cash for a company this size with no current manufacturing or prodution cost. Mind you Budd's and Fowler's salary and bonuses combined come to about £60k a month, and i'm sure there are some under the table dealimg going on here with mate's etc...
Why on earth do we need a Chief Financial Officer costing £180k a year + bonus, when we have 0 financing coming in!!! This can be outsourced for less than £10k year.
I also don’t believe the placing has been forward sold. I’ve seen that happen in the past and what happens is despite huge buying volume the share price doesn’t move up, it stays pretty stable and then once the volume drops the share price drops too.
There hasn’t been much volume in recent months, and certainly share price has never felt like buys are not having any affect - quite the opposite in fact, it usually shoots up pretty easily on buying pressure.
I also think the share price dropping immediately to the placing price (bid) suggests the shares haven’t been forward sold. In other words PEEL wasn’t going to let private investors offload their shares at 40p to them before they’ve made their own money. So they immediately drop bid to 25p. It will rise soon IMO.
Jimi that news alone will not take it to 50p, as the investors are spooked and have lost total confidence in the company. People are not excited about CE marks anymore like they were last year, and we've already proven we can CE mark products but can't even sell one item in 18 months!!! AIHL is nothing to get excited about as the initial order is just over £100k, hardly going to investors excited. Budd has deliberately did nothing about the FDA delay, wheras you'd have expected a CEO to change his strategy afyer a few months and try to target other markets and get some sales. Yet he sold nothing in the EU, SA, Thailsnd, or India, despite having approval, but just made out FDA was to blame for everything
I very much doubt that Budd will have known that the market makers would immediately move the share price down to the placing price when the placing news was released.
I’ve not seen that happen much in the 10 years I’ve been doing this. Usually the market drives right wherever it’s going over time. Often it’ll be quite stable way above the placing price and then gradually drift down over the days/weeks after.
So with that in mind I actually think the BOD probably this was a good thing for shareholders. And of course the funds from the OO will speed up development and FDA etc. They said the shares they are planning to buy will come from the placing or open offer… which does make me wonder if they will end up buying even more (if the OO is not fully taken up by private investors.)
Positive news and anticipation should easily take this back above 50p in the next 2-6 weeks. News on the biosafety and perhaps a PHE deal, distribution partners, CE markings x2, initial AIHL sales and details about European launch should all be coming in October.
Sally, regarding POC I personally think this has a very good purpose within the testing mix. Both in terms of direct testing for specific sectors and operations but also for quick confirmation of any +ve LFTs.
I do think they are now afraid to make a stance on its real value given the outcome of the lab assay test.
Do I think we should be talking about US for POC. Absolutely not as the FDA give no attention to non-US org unless you have a US partner or US registered subsidiary.
The recent PP andOO throws up more questions for me having thought about it. Why do they need £10m if they are confident about future sales of current products , are they going out for a full blown pr ramp to sell them as a detailed costing has nt been provided?. Why the need for a PP and OO when it is so much cheaper for a PP , is it because the ii s only wanted £6m worth even with the big discount so they had to go for an OO to achieve the £10m ?.
Did they have to offer the big discount to the iis based on the possibility of a longer term return to make it worthwhile to the iis to invest as the bod could not assure them of a worthwhile return in the short or medium time?
Will /has the bod learnt from their cataclysmic mistakes of focusing purely on the US market for the pcr and the high profit margin and look to sell our products to acceptable markets?.
Whatever happens or the decisions we make the mm s and the iis will always win in the end its just a matter of can we get some of the crumbs , break even from here or hopefully make a profit?.
Rbr: I kept pumping money at 81p, 63p, 51p etc etc, thinking that it can't go any lower and now nearly 75% down. Is it worth adding more? Is it the bottom?
Basic calculation for MCAP at the moment:
£12m in cash
£20m (£5m/Yr if AIHL is rolled out in whole UK x 4)
Total £32m /106m shares: 30p
Other businesses are not generating huge amount. FinnCap assumes 14m income from POC but I find it optimistic at best.
@Winni - I agree, the CEO and Chairman have to take responsibility for the position the company finds itself.
Show genuine interest and desire to make this company a leader in commercialised products rather than proof of concept.
Grow a pair and come speak to investors - and PIs that is. Time to face the music and convince us!!
http://www.genedriveplc.com/company-reports/Circular14September2021.pdf
The full document above for anyone who hasn’t read it.
I’ve made it clear I’m not a fan of the OO but for balance, and I know the amounts perhaps don’t look huge for them, it does look like the Directors are after more shares than their basic 7:2 entitlements.
Sally - what ever games the MMs and brokers play to increase the share price without any news, implies a clear as day agenda. So I can't see the point of taking the OO. In this game, you can't be played all the time!
The chairmans role is meant to look after the investors making sure the executives are driving the business in the right direction in terms of effectiveness and strategically. As with all Businesses, once product development has been achieved then sales becomes imperative to future success of a company. No stone should be left unturned in the pursuit of achieving sales.. I don't for one minute think GDR have done this! They have blindly pursued the US market without really exploiting any of the other opportunities afforded in this pandemic. I put this down to arrogance of the COE and possibly to the chairman, believing that the US market offered the best opportunities for large volumes and higher unit pricing. But over 18 months since the product was launched there has been no meaningful sales.. No flexibility in pricing to exploit opportunities in other poorer regions. It's all to easy to go back to the II's offer huge discounts and get further funding through dilution to the detriment of the wider shareholders.
So not only has the COE failed in his role but also so has the chairman. The AIM is a breeding ground failed executives who are rewarded handsomely for failure and i see this company as no different!..IMHO
Rbr: what I understand is that the only way to stop dilution will be to vote on 'whole' of the placing including II. If it goes ahead, they will release the OO shares and wee what happens.
What I recall from ODX placing last year, I was in two minds on taking the offer because the SP was close to 40p placing price. But they pushed The price up few pence on last couple of days and I ended up taking the shares, only to find SP drift down to 30p over next few days. More or less same with IAG. The new price with dilution was 150p and they are still struggling to reach there.
I am not saying that GDR won't recover to 50p but it will take time. No brainer to enter at this price. I also see temporary drift in SP after the placing! I would love to be wrong.
1) Profit (Loss) = Revenue - Expenses
2) Insanity is doing the same thing over and over and expecting different results.
If anyone can explain to me how DB and the board have acted to address cash burn and create a more sustainable business model, I'm happy to listen.
But keeping a cashburn rate of 400k per month and none related to stock manufacture is absurd now.
I need to see/hear commitment from the BoD and/or a revamped BoD.
LTH14 - if the 4.5m they can get from the OO was really to keep the business alive they would have gotten it from the IIs.
6m already secured from IIs and you are saying the company will go bust without more via PIs and OO??!! . You can't be serious OR you have an ULTERIOR MOTIVE.
Cashburn
Pacman: that is exactly what I have been thinking. £400,000/month cashburn to essentially run an office!!! They don't have factory to run. No products to manufacture. We can understand higher costs when they were developing products but they have done sh*t all since March but the cashback remains the same
Blox was worded post. it the OO never has made a sense to aby sane investor. You ate not only adding to the dilution, but giving Budd the extra £4.5m to pay his bonus. As you say and like i've said before, Bigal and LTH clrarly are associated with the company or broker hence they keep pushing for PIs to take up the OO.
LTH- how will the company go bust if PIs don't take up the open offer? They still get £6m from II placing in addition to the current £1.9m they have. £7.9m is more than enough to launch their new products, and gives them at least a twar to close any sales? So you're not expectinv any sales obviously hence pushing the OO :)
Board need to deliver. They have failed against every timeframe and kept shareholders in the dark. Walbrook have lied. Statement to address placing rumours should have been released, it wasn't. If they can't deliver to budget they need to give someone else a go. I've had enough of them d1cking around with their little PDA device and 3 month delays on everything. £6m. If that's not enough then do one. Maybe just invest it in one of the other diagnostic companies. They should of invested the last £8m in novacyt rather than themselves. That would have been worth over twice their current market cap.
£450k a year salary. The guy isn't in a rush to deliver - where's his motivation? Why isn't the world's first antibiotic induced hearing loss diagnostic test pending launch on Google somewhere?
State a reason to keep Mathew Fowler? His job can be covered for £45k. Seriously what does he do?
It's time to bring in some revenue with all these products longtermholder. Anything else is not acceptable with a £500k per month salary cash burn, plus the new sales team which is predicted to add another 15%. That's c£900k for 7 people! Who the fk are they employing?? It's wreckless and needs to stop.
Board need to go. Open offer is a calculated plss take.
Simple..it'll go to the institutions and the PI's will lose out. It's their choice.. GDR need the cash or it's broke then you'll all lose your money if the institutions in the end don't take it up..quite simple. Shareholders must pay to provide the necessary cash flow which in turn will make the company grow. It's business....wake up all!