RE: Price2 Jul 2024 12:40
I invested when Martin came on board, thinking the changes would bring a new exciting strategy. However, the interim results are not pretty. Cash outflow for H1, FY2024 was £2.18m, despite the cost savings, and leaving £911k in the bank! Assuming the same level of sales in H2 (as indicated in the forecast) and release of the escrow amount (£1.17m), this would mean a further outflow of approx. £1m in H2. This suggests a placing is likely. It seems that AIM placings for biotech companies are 30-40% below market. The current share price is likely to take a hit.
Longer term, I am concerned that, with the sale of the diagnostics business (likely the reason for the post-covid spike in valuation), the current offering is a niche technology in a niche market. Precision medicine requires diagnostics not biomarkers. The commercial models for biomarker discovery and use are still not well established. The technology employed by oncimmune is good but more likely a nice-to-have, rather than a necessity, as evidenced by the downturn in sales due to belt tightening in biopharma. So, while we can expect some growth with the larger sales team, it is possible the sales may never exceed £3-5m. Hence the lack of interest in the shares.
As always DYOR.