The latest Investing Matters Podcast episode featuring Jeremy Skillington, CEO of Poolbeg Pharma has just been released. Listen here.
I'm guessing that the scrappage problem is around 40% of saleable product. This means that we are loss-making for every sale and probably would still be loss-making even with scrappage at 5-10% as the volumes are too low.
I would guess that we are burning through a £1m mth so cash is now around £3m FFS.
I can't believe that we need more money already after a raise in Nov. Clearly, there has been no significant operational improvement otherwise we would not need a raise. I imagine that pressure from customers to deliver has led to a willingness to continue to run at high scrappage levels.
It would appear that the volume of scrap material produced during production is significantly impacting the company's ability to ramp up profitably. This was supposed to be a high-margin business. What a cluster ........ So now we have production and scrap issues.
Gold has peaked, struggling miner news article, only option!!
The arrogance to think that investors would fall for such nonsense is mind-blowing.
Patels can hedge production at these higher prices to pay for an increased offer.
Don't forget Singida expansion and super pit potential. They must nearly be ready to confirm the order of new equipment to increase production.
Last week I thought the share price was going to zero or there would be a rights issue at 5p. So very happy to have sold my shares today at these prices. As there has been no announcement as to the reason for this rise I would not be surprised if this returns to sub 20p within a few weeks.
I don't believe that the benefits are in doubt, just need to get PCP's requesting the test as a standard part of treatment / best practise. We are going to be added to the KDIGO 2023 Guideline, so that should help.
Everything is taking 18 mths longer that everyone hoped and expenditure should have been slashed 12mths ago to extend the runway. Fingers crossed Renx survives.
The new sales guy stated that the biggest impediment to sales was PCP's identifying suitable patients. I had assumed that a simple algorithm was being used in MS to ID patients and recommend that they come in for testing. ie anyone over x age, x weight, high blood pressure, diabetic etc. All covered by insurance so everyone is a winner and the insurance company saves on much bigger costs down the line.
“ The question many should ask is what would happen if no offers arrive, and the board proposal is then voted down.”
I think that Bidco would increase its offer as it is getting such a good deal.
If Bidco sells WK next year after getting licences approved for c $100m and free cash flow continues to run at $10m per quarter as it currently is, then Bidco get their money back within 2 years................ That is a very very good deal for
them and a very bad deal for us.
"The only acceptable explanation for today’s bid for Shanta by existing shareholders is that they are doing it to spark other bids at a higher level"
I disagree............this feels very much like an inside stitch up.........Interesting that the face and voice of the company Eric did not contribute to the RNS. He may feel he cannot recommend the offer based on his undervalued comments over the last year. I imagine there may be a nice big job waiting for him with ETG.
The reasons in the RNS are ridiculous.............basically, large shareholders can't sell because share is illiquid so want to accept this crap cash offer............
Here is an alternative strategy
Sell WK next year when the licences are granted. Should raise around $100m.
Start buying shares back and start paying 5% divi.
Buy another ball mill for Singida.
Will be generating $10m plus cash a quarter
Everyone is happy
I imagine Bidco will sell WK next year and combined with the free cash flow will more or less get their investment back within 2 years.
I have never seen a company with good prospects agree to a takeover at such a low premium. What was the point in agreeing to the takeover at all?
At current gold prices Shanta is generating approximately $10m free cash flow a quarter. Why are accepting this offer? It does not make sense?
"included the discussion of their first clinical case where a patient was admitted into the hospital with exacerbation due to cystic fibrosis. XENOVIEW MRI uncovered surprising ventilation defects that were not detected in the patient's chest radiographs, which prompted a specific change in management for the patient."
Mu Health care video - https://youtu.be/iFZ6oml7NhY
A gold price over $2000 means we earn approx $10m a quarter free cash flow. We are trading at approx 4 times FCF. Not many companies can say that. It is worth mentioning that cash flow doesn't increase in a straight line as I know some people were disappointed in the cash position at the end of last quarter.
At last some serious cost-cutting.
I think the plan is to reduce costs to about $5m in calendar Q1 and then reduce cash burn to around $2-3m per quarter by the year end as revenue increases.
Need to raise $15m ! Not easy in this market !
I expect Tues to be grim.
The one piece of news that could make a real difference is Wake Forest integration and uptake news. Not holding my breath though. MS testing should be ramping up as it is now fully integrated, but is still only running about 100 tests per mth? I'm guessing that a lot of costs over the last 2 yrs have been related to IT and real world evidence.
MS are big shareholders so a clever move would be to add the test to the standard care requirements for all their PCP's when a patient has xyz. That would make a big difference.
The question is have SCE been able to ramp up production this quarter ? If so debt funding or a small equity raise should be no problem or not required at all.
If not and there are still production issues then 15p is likely to come into view quickly.
Renx seems to have entered a doom loop. The simplest way to stop the loop is to announce a major cost cutting exercise,
giving them a runway to show they can sell the test. If they don't do it proactively, any raise will forced it upon them.
There are now enough things in place now to make this test a success, just need 12 mths to prove it.
MS could step in and transform the situation by using guidelines to its PCP's to start using the test.
The insurers can see the high-level benefits and savings that Ki can bring, which we all know about. Getting an insurer on board which is a difficult thing to do is now no problem for us.
I believe we are having problems gaining commercial traction due to a combination of the below
Education of PCP's on the benefits Ki and being to easily order it
PCP's knowing the test exists
Ordering the test when it is not integrated into the hospital system.
Ki reading the patient records when it is not integrated into the hospital's electronic record system
I'm surprised that MS sales have not started to accelerate now they are on a full commercial model and everything is fully integrated and set up. An RNS stating MS has now started to issue practice alerts and is part of the standard of practice, would be very good news.
Let's hope for Wake Forest news in the next few weeks.
There is a hope that one of the big pharma companies might start promoting Ki to help accelerate the sale of their Kidney drugs. "Ki leads to 4 fold increase in the prescribing of kidney drugs"