Member Info for B2HS2L

22:30 Slide ‘Portfolio Prioritisation Matrix’
I feel that with the advent of IVDR and the clinical requirements and the regulatory hurdles in the future, we had better be confident of where we place our investment for organic R&D in the future. What you can see on this slide is that we have performed extensive market research primary and secondary research and advisory boards in order to inform where we focus in the future. Here you can see the market attractiveness on the bottom axis and Strategic fit for Novacyt on the side axis.
Things that migrate up the top rh corner of the chart and the size of those bubbles are indicative of the most attractive. More detail soon.
The reason we are interested in panels is much more to do with our work with WHO, and NGO’s and the southern hemisphere concerns over Arboviruses. - The WHO has just launched an initiative, they can see a major threat from Dengue, Zika, Yellow Fever and the like, and that’s why it features low here but it is a significant opportunity globally.

24:30 Slide: ‘Initial R&D priorities beyond Covid-19’
I want to underline that this is the initial R&D prioritisation, this is not the end, it is the beginning of a transition to a broadened diversified non-covid portfolio.
1 The most obvious adjacency for the organisation is respiratory disease.
We already have a winter panel on the genesig platform for this winter and we will be developing this for Promate, going forward and that then to bring in additional respiratory panels in some of the viruses mentioned here, the research confirms that is a huge opportunity for us.
The other area that was confirmatory was in transplantation, we already have developed the CMV, EBV, BKV assays, and the CMV isn’t far behind them, and are the most common types of virus within organ rejection. The new areas here Gastrointestinal (GI), are exciting, very large opportunities, large unmet needs, for us to serve Viral GI, – I’m sure you are familiar with Norovirus, that’s appearing as we come out of the pandemic in schools, hospitals ships etc. Then bacterial panels for GI infections, and I did mention previously that a separate piece of primary research we’ve done a lot of work with advisers especially the WHO thinking about how we support the emergence of viral vector borne disease in the developing world so we are also developing an assay there too. Let me finish this slide, I’ll read some research:
‘An extraction – less viral GI panel workflow would be great for these tests. It would be quicker, and because there are a billion bugs, I wouldn’t have to worry about decreased sensitivity. ‘ – Nordic Lab Director.

27:35 Slide: ‘Novacyt has an extensive product portfolio and a deep development pipeline’
This slide hopefully gives you three key points to take away
1 It shows you we have a broad commercial portfolio now to commercialise to strengthen our reach and our global team.
2 It shows we have a deep development pipeline we are investing in and that pipeline although it will take in brand new assay development because of IVDR and clinical development, needs 18 plus months to bring to market. There are double arrows there to indicate we are not starting from scratch in all of these areas. We already have Winterpannel, we are late stage development for dry formulation of Promate for Covid-19, we have transplant assays near completion, so the way to think about the IVD timelines is we will have a flow of new products launches over time as we seek to diversify away from Covid-19 alone. The research use only we are good to go second half, we are just working on the primer probe relevancy to make sure they are up to date, we are looking at the customer base, - the team are going to be redeployed and trained up with the right materials to revitalise that portfolio, and we will integrate the instrumentation where we have good to go Q series, Mygo’s and our CO-Prep recently launched to be described in a moment.
Something new, we do have a partnership where we are investigating proof of principle / proof of concept on a Biosensor platform for future longer term potential application in point of care.

29:44 Slide: ‘PROmate workflow has strong potential to meet decentralised laboratory needs’
Back to first principles which you would expect from a marketing guy, - I want to know what customers need and want. When we asked that question in recent research we just competed, they want performance, ease and convenience of workflow, relatively quick turnround time, flexibility and practicable lab logistics. When you break that out by tests, assays feature, you can see the top 7 here and I’ll mention PROmate workflow in a second. Well, we have a competitive differentiated solution for ticking against those 7 customer expectations, and I’m really excited because the one thing I care about is serving our customers ultimately to protect lives.

31:10 Slide: ‘Integrated, near-patient workflow with PROmate direct-to-PCR offers differentiated medium throughput, scalable solution taking precision diagnostics to the front line’
Here we are as a workflow example, it’s is not about linear thinking here of assays versus instruments versus research use portfolio, it’s about how this works together in a decentralised or near patient setting. An example of integrated workflow with PROmate, direct to PCR, medium throughput solution scalable solution to take diagnostics to the front line. You could take this workflow to the front line in Africa, because you could put it in a versalab or briefcase with a q16 with the exception of the CO-Prep, this is highly versatile bespoke laboratory, for maybe ward testing, private labs, perhaps shipping, perhaps nursing homes. This is really exciting to bring this together, CO-Prep is an automated liquid handler simple workflow, sample stewardship, convenience with walk away times for lab staff is a desirable need, we can reduce contamination and human error by deploying CO-Prep in this work flow. Many are familiar on the Right hand side that’s the q32 32 well PCR device rapid results high sensitivity and specificity with a direct PCR assay such as PROmate, so this work flow I believe is highly competitive for Novacyt to win in its chosen segments in the future.

33:50 Slide: ‘Novacyt has a differentiated proposition in the decentralised market segment’
Let me describe that more – if you take a view of the market in 3 main segments if I start on the right hand side, I don’t want to go head to head with the big guns mentioned. They have the instrumentation and assays and serve the central labs, we actually do supply products into central labs and will in future where we see unmet need, but it’s not our primary focus. Our Primary focus – discussed shortly, but before that think of the Left hand side of the chart where you see point of need also occupied by some key players, in that segment where you typically see syndromic testing low volume high plex low throughput, relatively high cost per test, - that’s not our Primary focus today. We might play in that growing segment in the future if we bring a Biosensor platform to bear, but today Novacyt’s workflow and it’s offering sit in what we call the decentralised setting, or near patient setting, where we believe we have the winning formula to be differentiated and highly competitive versus competition we are the only QPCR solution and as we have menu, we can really compete here. When I showed you that workflow earlier, you could imagine deploying 8 Q32 off the back of one CO-Prep, and you could be cranking out 1000 tests per day in a relatively near patient setting, with or without a Versalab combination. We could really go for precision and scale on the front line.

35:00 Slide: ‘Novacyt has global commercial reach through direct presence and a comprehensive distributor network’
I said I would give more info on the global reach of the company, so here is the insight, starting in UK we have a direct team that deal with UK sales both public and private, with a direct commercial team, we have enhanced the EMEA team we have North /South sales leadership and we have enhanced our distributor network across EMEA, we are now present in Germany which is the biggest market in the EMEA. You are aware we are present in America we managed that business through distributors and we have the boots on the ground to manage them in the US in US time, we continue to do that and the same in Latin America we have boots on the ground, we manage our distributors pro-actively. Distributors chosen for the appropriate portfolio’s who know how to commercialise whether it’s RUO or IVD. We have been highly successful as James pointed out in the WHO / Unicef / NGO world, and we continue to do that going forward, and we manage that through the global key account team. Similarly it is very successful historically in APAC, and now our global key accounts team not just instrumentation is taking the portfolio across our APAC distribution network. So this coupled with the strength and talent in global marketing and commercial leadership we have brought into the company is a growing strength of the company.

36:50 Slide: Accelerating inorganic growth through business development
I also said to you I would come back to the inorganic strategy and I look daily at opportunities in the business development side. It is an absolute priority now, and I think James made an important point I want to underline. We plan to deploy the capital we have accrued to drive inorganic growth and deliver shareholder value across three main buckets
1 Innovation – we’ve done it already with CO-Prep, co-developed a viable product launch, we’ve got a Biosensor platform in proof of concept development with partners now. We are looking at CRISPR / Microfluidics / Next Generation Sequencing. I don’t know what else fits there yet, but we are going to build earlier stage innovation. If I placed all the bets on that though, that would be a long game it might be a winning game, therefore we have two other buckets.
2 Acceleration – If we take our time because of IVDR and clinical development and regulatory requirement to develop our own future portfolio of non-covid assays, we can accelerate that portfolio and we’ve dedicated a task force for that very purpose, seeking additional chemistry to run on our workflow, looking at extraction capability if it is required in that workflow for sensitivity reasons, because higher sensitivity comes with extraction it is an absolute requirement, and also other devices such as Lateral Flow Digital Readers.
3 Then last but by no means least, we are very proactive in seeking strategic transactions through M&A to diversify and build Novacyt to scale.

39:00 Slide ‘Building a strong sustainable growth business and remaining agile as a global first responder’
Summing up, I’ll hand over to James for a few closing remarks, but I hope what I’ve shared with you convinces you that our portfolio development now with integrated instrumentation workflows still leveraging the covid-19 portfolio across the world which varies according to need, bringing in the dry formulation and so on, the pandemic’s not gone, but now increasingly bringing in other assays on our platforms PROmate and sometimes Genesig we will enhance that from the BD point of view in terms of breadth or depth of that portfolio. We do have a very comprehensive research use portfolio we are revitalising and relaunching including e-commerce channels and we have that near patient capability now which is a highly differentiated competitive mid size scalable workflow taking testing to the front line. Impressive global reach through our team directly and through our hand selected partners who we are enhancing the relationship and the motivation for us to commercialise our portfolio’s in the future and hopefully convinced you that business development is at the centre of inorganic growth strategy now to supplement our organic development. All of that gives us the right to be a global first responder, we have been one and we will continue to be, we will remain agile and we have the innovation engine to contribute to materially to global health.
With that I will hand over to James to give more info on 2022 and longer term outlook.

41:00 Slide: ‘2022 and longer-term outlook’
James McCarthy - Just looking at 2022 and beyond, so prior to the start with how we got on in Q1 2022, we posted over £13 Million of revenue compared to £34.4 last year like for like.
The covid element was just over 10 million this year versus 31 million last year = 67% decline.
When we talked about guidance in January we thought covid sales would be 50%.
It looks like it is accelerating faster so if that continues for the balance of the year you are looking at a sales range of between £35 – 45 million, which is still quite a wide range, but covid revenues are very difficult to predict. It feels like it’s gone away for ever, I suspect that’s not the case, another winter comes and things can look very different. That’s our guidance at the moment. Just for clarity that excludes any revenue from Microgen or Lab21, I’ve talked earlier about a proposal to discontinue those businesses, so for this forecast they are taken out of the numbers and if the proposal goes ahead, they will be treated as discontinued for the whole of 2022, so in effect as if they were discontinued from the 01.01.2022.
So I think the important strategic element for us as we go through this year and beyond is growing that non-covid piece, and I’m not about to repeat everything Dave shared with you but a lot of the elements are about trying to drive that non-covid portfolio whether it be organic or inorganic support, that’s really the focus of 2022 and beyond. In terms of profitability we will aggressively manage our costs to keep double digit EBITDA for the full year of 2022, this is a balancing act because of course we want to keep some investment behind the organic development and product development and all the great things Dave talked about. But that’s our commitment for 2022. If you look further ahead we are calling on a figure of £100 million of revenue in 5 years and just to be clear this does not include any acquisition activity. This is organic growth, acquisitions of course may accelerate that target, may make it bigger, - acquisitions are difficult to predict, but the £100 million is an organic number.

44:15 Slide: ‘Company capabilities, vision and purpose’
DA Thank you James, just one more rap up , you saw this slide earlier but I think it’s important to round off with it. I think there are strong foundations now in Novacyt built before and during the pandemic which allow us to drive for growth and future value creation ultimately to protect lives in infectious disease and contribute to global health. Our vision and purpose is now clear and we hold those with passion and pride to make those real and I think we’ve made it real in the past and we can continue to do so.
It's now all about disciplined execution to bring what I’ve shared with you today across the business and that is what we are doing and will be updating you with progress as we go forward.
Presentation ends, but Q&A questions expected to be available on the Investor Meet Company platform shortly.

On the face of it, it would seem high finance is looking to build labs & office space to rent to companies involved in R&D.
I don't see Novacyt becoming landlords, but may have to find larger, better appointed premises in future.
Novacyt has in the past used property to secure loans.
These have now been redeemed, so I assume we don't pay anybody rent for the Camberley and Southampton premises.
https://find-and-update.company-information.service.gov.uk/company/12031776/charges

We don't know anything about future requirements, or levels of dissatisfaction with current premises, and sometimes moving means key staff finding other positions.
Sorry I can't be more specific.

Last line cropped so -
The management of HHV-6 disease in immunosuppressed patients is controversial and not well understood.

Slide 15 - 'Initial R&D priorities beyond Covid-19'
This slide is full of acronyms familiar only to medics. I have attached explanatory text below:

VECTOR BORNE DISEASES are illnesses that are transmitted by vectors, which include mosquitoes, ticks, and fleas. These vectors can carry infective pathogens such as viruses, bacteria, and protozoa, which can be transferred from one host (carrier) to another.
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JCV - Human polyomavirus 2, commonly referred to as the JC virus or John Cunningham virus, is a type of human polyomavirus (formerly known as papovavirus), more than half of humans unknowingly have it, - it settles in the urinary tract, bone marrow, tonsils, or brain, and can be dangerous for those who have a weak immune system.
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BK virus (BKV), Cytomegalovirus (CMV) and Epstein-Barr virus (EBV) reactivations are common after kidney transplantation and associated with increased morbidity and mortality. Although CMV might be a risk factor for BKV and EBV, the effects of combined reactivations remain unknown.
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HSV
• The herpes simplex virus (HSV) is categorized into 2 types: HSV-1 and HSV-2.
• HSV-1 is mainly transmitted by oral-to-oral contact, causing oral herpes (including symptoms known as cold sores), but it can also lead to genital herpes.
• HSV-2 is a sexually transmitted infection that causes genital herpes.
• An estimated 3.7 billion people under age 50 (67%) have HSV-1 infection globally.
• An estimated 491 million people aged 15–49 (13%) worldwide have HSV-2 infection.
• Most HSV infections are asymptomatic, but symptoms of herpes include painful blisters or ulcers that can recur over time.
• Infection with HSV-2 increases the risk of acquiring and transmitting HIV infection.
• WHO is working to increase awareness about HSV infection and its symptoms, improve access to antiviral medications, and promote HIV prevention efforts for those with genital herpes, such as pre-exposure prophylaxis (PrEP).
• WHO and partners are also supporting research to develop new strategies for prevention and control of HSV infections, such as vaccines and topical microbicides.
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VZV
Varicella zoster virus (VZV) is an exclusively human virus that belongs to the a-herpesvirus family. VZV is present worldwide and is highly infectious. Primary infection leads to acute varicella or “chickenpox”, usually from exposure either through direct contact with a skin lesion or through airborne spread from respiratory droplets. Complications such as hepatitis, pancreatitis, pneumonitis, and encephalitis are infrequent but can be life-threatening.
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HHV-6
Human herpesvirus 6 (HHV-6) is a herpesvirus that causes roseola infantum (or exanthema subitum [sixth disease]) in infants and children.
HHV-6 infection has been associated with complications of varying severity in hematopoietic stem cell transplant (HSCT) recipients, to a lesser degree in solid organ transplant (SOT) recipients, and in those who are immunosuppressed. HHV-6 managem

This includes an Appendix we haven't seen before.

From RNS 28.04.2022 -
"Business development
Novacyt is seeking to drive value by deploying its capital to deliver inorganic growth in parallel to its ongoing R&D investments. There are three main pillars to the business development strategy:
· Early innovation, where Novacyt has already proven success by investing in and delivering a viable commercial product in the form of CO-Prep™ for automated liquid handling and enhanced workflow, and
**where it is investing in the development of an exciting point-of-care biosensor technology.**
The Company continues to look for potentially disruptive technology where it can support and accelerate development to bring technologies to market"

Does that last bit refer to inbound white label technology perhaps?
Would IT-IS be capable of developing such instruments in a timescale we could live with?
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Biosensors
Biosensors are devices used to detect the presence or concentration of a biological analyte, such as a biomolecule, a biological structure or a microorganism.
Biosensors consist of three parts:
a component that recognizes the analyte and produces a signal, a signal transducer, and a reader device.
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examples -
https://www.oxfordbiosystems.com/SD-Biosensor
Seems faster than RT-QPCR.

Some wanted to know what was said about M&A.
At 38.30 - slide 22
"We are very proactive in seeking strategic transactions through M&A to diversify and build Novacyt to scale"

This may not be all that was said on the subject, JM2c.

I apologise for not being clear in the first instance, but I confirm now that you do have my meaning strait in your head.
I'm not going to say any more on the subject :o)

CS -
Novacyt is using the fact they are in litigation with a large customer to dissuade ANY INTERESTED companies from making a bid.
That risk to will disappear as soon as DHSC throws in the towel.
Then there could be more interested parties in taking over NCYT.

"I have said in the past that I believe the DHSC dispute is a tool for dissuading ANY INTERESTED companies from making a bid."
Anyone considering a Takeover would be dissuaded by the litigation with one of the companies larger customers.
It is nothing to do with 'DHSC caring about NCYT being taken over.'