Member Info for B2HS2L

LARRY 10,
1 https://bourse.challenges.fr/ IS THE SOURCE FOR

If this report is correct, and the dispute is over billing arrangements - which are clearly stated in the contract, then Novacyt being in contention with its number one customer will stop any bidding for the company.
IMO GM is using the time the dispute lasts for to grow the company toward mid-cap status.
If we were not in dispute with DHSC, there would have been a number of offers,
if the amount of M&A elsewhere is anything to go by.

Not expecting GM to be in any hurry to end this dispute, (particularly if we are in the right), whilst profits accrue.

How many income streams did we have in March last year?

We have quite a few more now.

Seems I didn't have a problem opening this link this morning, but now I do.

So for those who could not open the link, or translate it...

https://bourse.challenges.fr/actu/ALNOV/FR/81211/novacyt-chute-de-12-apres-son-point-sur-le-conflit-dhsc.html

21/05/21
Novacyt: 12% drop after its point on the DHSC conflict (CercleFinance.com) -

The stock fell nearly -12% after its update on its dispute with the UK Department of Health and Social Affairs (DHSC).

Novacyt warns that this conflict 'could now have a significant impact on the first quarter of 2021 revenue achieved with the DHSC'.

"Novacyt has sought legal advice regarding this dispute and believes it has a strong case to assert its contractual rights," oddo said.

The analyst points out that the NHS seems to be contesting the billing arrangements, giving up a risk of recognition of income.
'As a reminder, about 50% of Q1 2021 revenue came from sales at DHSC'.

'The uncertainties surrounding this dispute militate in favour of a certain degree of caution.
This legal knot risks continuing to maintain doubt and weigh on the stock," adds Oddo,
who remains underperforming on the stock with a target of 4.10 Euro.

Copyright (c) 2021 CercleFinance.com. All rights reserved.

Not sure of validity of source, but link found on boursorama - Novacyt forum.

Possible news (but not much) on DHSC dispute:
https://bourse.challenges.fr/actu/ALNOV/FR/81211/novacyt-chute-20de-12-apres-son-point-sur-le-conflit-dhsc.html

right click on article to translate to english.

And the missing link:
https://www.theguardian.com/commentisfree/2021/may/22/how-genetic-sequencing-is-helping-scientists-find-the-next-covid-variant

This link has been posted before -
24.05.2021 - UK launches plan for ‘Global Pandemic Radar’
https://www.healthcareitnews.com/news/emea/uk-launches-plan-global-pandemic-radar

Apologies if the next link has also been posted before, but the article is directly relevant to genetic sequencing, outlining the global shortfalls in this service, and the opportunities open to Novacyt for genomic sequencing instrument and assay supply.
Plenty of opportunities to export here I believe.

22.05.2021 - How genetic sequencing is helping scientists find the next Covid variant

In most countries, sequencing efforts are even less systematic, and led mainly by labs that happened to be set up for pathogen sequencing prior to the pandemic. Academic institutions and hospitals are independently sequencing samples from their local areas, usually obtained from hospitals. In many lower- and middle-income countries, the only sequencing facility is in the capital and this means that only individuals living in the capital, or travelling there for treatment, ever get their virus sequenced. The UK has sequenced 50 out of every 1,000 diagnosed cases, compared with fewer than 1 in 1,000 in India. Eighty countries have submitted fewer than 100 sequences, which is insufficient for tracking variants.

While recent advances in the field are nothing short of a triumph, sampling and sequencing efforts remain a global patchwork. Uneven sampling can bias the results of molecular epidemiology, making it impossible to identify the geographic origin of a new variant and difficult to assess its transmissibility. Coordination of Covid-19 sequencing internationally by WHO was already underway, before the announcement regarding the Global Pandemic Radar. But laboratories must be equipped in key locations and staff trained so that procedures are consistent. However, global genomic surveillance for Covid-19 presents unique and daunting challenges. Not least that the sequencing will have to be both global and in real-time – unlike that which goes on for HIV and influenza. And sampling strategies may have to be adapted to address issues about which we are not yet even aware.

Hi Wilson, tried very hard this week to identify the other three companies on the framework.
Nobody else has claimed they are also successfully on the framework, - rather odd.
Will keep trying.

https://twitter.com/i/events/1397834839865372675

k, -
Sorry I left out an important point from 12:37 post:

"GM's aim is to make Novacyt into a Mid-Cap status company, and would not want to get bought out before he has achieved this. The policies adopted by the French and British governments concerning buyouts of companies valued by both governments are in Shaun's spreadsheet (page 60), but a GENUINE DISPUTE WITH THE COMPANIES NUMBER ONE CUSTOMER would probably have a more potent deterrent effect."

K, -
I wanted to introduce the possibility in parallel with your post, that perhaps GM has an interest in making the dispute last as long as possible if he wanted to deter companies making offers.
GM's aim is to make Novacyt into a Mid-Cap status company, and would not want to get bought out before he has achieved this.
The policies adopted by the French and British governments concerning buyouts of companies valued by both governments are in Shaun's spreadsheet, but a genuine dispute would probably have a more potent deterrent effect.

k, -
If GM is in the business of deterring offers for NCYT, the DHSC dispute will aid him in his task.
If the above is correct, does GM have an agenda to make this dispute last as long as possible?
However, now he has RNS'd twice to say first one, then the next quarter figures MAY be affected by the dispute, he has to RNS immediately the dispute has been settled.

Saintsmith + Bluemoon -

If a takeover is in progress, isn't it unusual for QUITE so much recruiting to be going on, particularly in the high level jobs:

Adrian Denton - Head of Risk & Compliance joined May 2021

David Franks, Chief Human Resources Officer joined April 2021.

Nick Plummer, General Counsel and Company Secretary at Novacyt Group (Joined April 2021 ex T-F).

++++

Surely any interested purchaser would be saying 'Don't fill these positions, we want to fill those positions with people we pick'.

And there would probably be plenty of candidates from within a larger organisation.

I hope you would agree that any M&A activity (which I think will precede any discussion about future plans) will negate the prospect of a takeover.

JM2c

Poidster, -
I much appreciated your post.
I hope you continue to post, your point of view and observations are of great value to this board.
Thank you.

Poidster had this to say last night:

"Labs have been trying to return these pallets, which are taking up valuable cold storage space for months now, with little success. Novacyt field operatives have been asking lab staff to send emails to them stating that they are now disposing of said exsig/genesig kits."

note ....pallets, which are taking up valuable cold storage space for months.

Having checked the Winterplex IFU, this product also needs -20deg C cold storage, and NHS used very little of this product last winter.
So DHSC has an issue with Winterplex cold storage, as there were contract minimum order levels for
Winterplex as well as Exsig direct.

Following on from my post at 09:39 this morning.

The contract states:

"The Parties agree that where such new products are made available by the supplier, they may be ordered by the Authority under the terms of this agreement at the same price per reaction as (or less than) the price listed for the original Good."

Technical Validation of Primer Design Ltd PROmate™ COVID-19 Direct Workflow Solution IFU version 3.0 Published: February 2021 Version 1.0

https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/957995/TVG_Report-PROmate.pdf

Right clicking the document, and selecting inspect provides web page html programming info.

I searched on'2021' to see which dates came up, and found :

"last modified 03.02.2021".

DHSC were waiting for the green light to purchase PROmate from this product validation.

My guess is this document was put online at or shortly after 03.02.2021.

This means that the DHSC decision to purchase PROmate (one pipetting stage instead of many) instead of exsig direct, (which had not found favour in NHS lab use), was taken around end of January 2021.

PROmate video dated 26.01.2021 below, stop at 0:47 and view shelf life - 30.04.2021
https://www.youtube.com/watch?v=SfBWanjuTKk

PROmate product announcement in RNS dated 16.11.2020, so feel fairly confident shelf life is 6 months.

From the 09.04.2021 RNS:

"the Company believes that Q1 PROmate™ sales may be sufficient to support the NHS current roll out plans for the remainder of 2021."
That really is rubbish, if the shelf life is 6 months.

Copy/paste the following into notepad:

Found out an interesting little snippet tonight.
When the Q machines were shipped out to general pathology labs, they were also shipped with literally pallet loads of exsig and genesig kits to each lab.
After field evaluation, these were deemed not fit for purpose in a busy diagnostic lab.
Tbf novacyt then delivered promate which simplified the whole procedure thus making it usable.
Now, the original contract stated that testing kits could be superceded with improved kits, I can't remember the exact wording but I'm sure the more diligent members can provide that.
From this, I assumed, probably naively, that PROmate would just be substituted in under the original contract with no change to contract value.
Now, I'm not so sure. Novacyt will have spent no small amount of cash producing those kits, that were deemed unusable and are now seemingly defunct, then provided PROmate instead.
Labs have been trying to return these pallets, which are taking up valuable cold storage space for months now, with little success. Novacyt field operatives have been asking lab staff to send emails to them stating that they are now disposing of said exsig/genesig kits.
So I'm now left wondering are novacyt expecting additional payment for PROmate and have they recognised revenue based on this assumption?

+++++

PROmate possibly supplied after publication of "Technical Validation of Primer Design Ltd PROmate™ COVID-19 Direct Workflow Solution IFU version 3.0" dated Feb 2021.
https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/957995/TVG_Report-PROmate.pdf

PROmate product announcement in RNS dated 16.11.2020.

From April 9th RNS:
"although the Company supplied PROmate™ in Q1 2021 in accordance with DHSC demand." - my thinking is now: this supply was outside contract, to ensure deliveries stop should payment stop, as buy now the contract would not be operating smoothly.

For Information:

Included in the contract is a 'Change Control Process'.

"either Party may request a variation to the Contract
provided that such variation does not amount to a substantial modification of the Contract
within the meaning of the Regulations and the Law."

Possibility that the definition of a substantial modification is at issue.

From the 09.04.2021 RNS:

"the Company believes that Q1 PROmate™ sales may be sufficient to support the NHS current roll out plans for the remainder of 2021."
That is rubbish, if the shelf life is 6 months.
++++
"Now, the original contract stated that testing kits could be superceded with improved kits"
Contract states:
"The Parties agree that where such new products are made available by the supplier , they may be ordered by the Authority under the terms of this agreement at the same price per reaction as (or less than) the price listed for the original Good."

06.05.2021 - WHO, Germany launch a global ‘pandemic and epidemic intelligence’ hub

https://www.healthcareitnews.com/news/emea/who-germany-launch-global-pandemic-and-epidemic-intelligence-hub

"THE LARGER CONTEXT

The WHO Hub is part of WHO’s Health Emergencies programme.
Technical officer of the programme, Christine Czerniak, recently told Healthcare IT News how new COVID-19 variants are highlighting the need for genomic surveillance and sequencing across the globe and reinforce the importance of collaboration."

Hence the requirement for PCR testing long into the future, - to source the RNA on which to base the subsequent genomic sequencing.
Confident Novacyt is well placed to prosper commercially from being part of the hubs with immediate access to new virus detection worldwide, and to rapidly deliver a CE approved assay for those variants classed as Variant of Concern.
Luvely Jubbly Rodders...This time next year...
+++

The above is one of the hubs discussed in a previous post (25.05.2021 20:06) containing this link:
24.05.2021 - UK launches plan for ‘Global Pandemic Radar’
https://www.healthcareitnews.com/news/emea/uk-launches-plan-global-pandemic-radar

VanV -
1 Long Term Plan end of Q2.
2 Acquisition in H1.
3 Annual Results 29.06

The reason I ask about leadership complete for Mid-Cap status is that when these three events have come to pass, (and the sp has adjusted to accommodate the good news, - shorters burnt at the stake etc - then in my view I am expecting sp to reflect mid-cap status, - ie > £1 Bil.
Is that also your expectation?

Bluelight -
I see where you are coming from.
However, would a NOMAD take the same view, - or is the matter immaterial to a NOMAD?

VanV -
In terms of high ranking officials, - in your view are they all recruited now - ie is the leadership complete for Mid-Cap status?

VanV
Worst case NCYT are owed money from DHSC, (but the dispute might be about DHSC claiming a repayment).
Also worst case, the cost of acquisition target is beyond our present means for now.
For me the size of any shortfall from DHSC would be equivalent to a small / medium size loan.
However, any DHSC repayment claim might be stopping an acquisition for finance.
I am hoping that IF WE ARE OWED MONEY, we would receive any outstanding amount in Q3.
This being the case, GM could loan funds required to make an acquisition, and repay when DHSC pay up.

There is a small possibility that GM will need a loan to make the acquisition in the below timescales.
- So much R&D this year will have an associated cost.
Gm previously stated:
1 Long Term Plan end of Q2.
2 Acquisition in H1.

The above depends upon the purchase price of the acquisition, but 1 & 2 suggest acquisition plans should be being finalised now.

ShearClass
I always thought a £1.9 Mil deferred consideration was a lot, and soon we should find out what IT-IS R&D (IT-IS ex-directors) have been cooking up. What will GM be getting for his money?

+++

When posters discuss the cash pile, nobody discusses our increased R&D and recruitment costs. - Blows my mind.