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Thanks, Ophidian
Ophidian, as someone who I believe understands the industry, how do you envisage sales unfolding in the coming weeks?
I have to say I was somewhat surprised that a distribution agreement has not already been announced - so my take is that it is contingent on the EU CE approval and that UK sales are likely being thrashed out with HMG.
But equally I am relegated to pure speculation, so I would be interested to hear your thoughts!
"Avacta aims to become the leading provider of innovative, next generation diagnostic solutions, and the first choice for disruptive immunodiagnostic products."
Making no small plans then..
The USP is that it has 100% sensitivity in its intended use class...
Readable in 10 minutes with high viral loads, but IFU gives a read time of 20 minutes in case of a weaker signal. Think it's in previous RNS's and also the Annual Report.
I guess the FOMO was not kicking in early then... :(
..kicking in early?
@Wyndham - If you have at look at the FT article I posted this morning, the example UK use case is as you describe: surge testing in areas of outbreaks.
FWIW I think you are partly right on mass-testing: while the device is designed for population level screening, I suspect at this stage of the vaccine roll-out that it will be used that way on a local, rather than national, level at least in the UK.
However, vaccine take-up won't be universal here, and there is still the high potential for outbreaks - and variants - for as long as the rest of the world remains largely unvaccinated; so I imagine use for surge testing will be frequent for quite some time. Then there is rapid screening of hospital/care home admissions, air travel, larger corporate workforce's etc. Plus after the last year, I imagine the Government will want to keep a pretty substantial stockpile in reserve.
Leaving aside Western states and consumer markets: with the rest of the world, the issue for many poorer countries is not that they cannot afford vaccines or tests, but there is inadequate supply.
The LFT may not be used for mass testing in these countries, but at less than 1/10th of the cost of PCR, it could certainly displace lab-based approaches across these healthcare systems.
Bare in mind we are partnered with GAD - whose raison d'etre is provision of low-cost diagnostics to these countries - and who themselves are supported by the Bill & Melinda Gates Foundation. It's not inconceivable the WHO, Gates Fdn, etc would bulk purchase as part of aid packages for those countries unable to directly purchase themselves.
All in all I think the demand on a global scale will be off the charts, even if we have missed peak demand in the UK.
I thought it was a blinding RNS tbh and i'm surprised it hasn't moved the share price further.
Sub-coal was always a bit iffy as a carbon mitigation measure as it's better than coal but not realllllly a 'green' measure - more a 'brown' stop gap.
But it's advantage is the ability to rapidly re-purpose ageing coal plants at scale while renewables come on stream - which I know is a concept that has purchase with the Department for Energy & Climate Change in the UK, for example.
If the addition of this technology can turn Sub-coal carbon neutral or even carbon negative it makes the whole package a lot more attractive IMHO - and it seems from the tone on the RNS that's having an impact on gaining permissions for Uskmouth...
I think if they get proof of concept for this at Uskmouth they'll have captured a global market they've effectively created - so I would have thought today's news would nudge us up even a little, as opposed to down?!
@Poirot - there's a clip of David Wilson here talking about antimicrobial resistance here.
In fact, so much of what he says (what, like 6-8 months ago?) is verbatim reproduced from government sources in that article that it seems inconceivable to me Avacta haven't been sat at the top table for quite a while...
https://twitter.com/HondJoe/status/1400347339898896387?s=20
Big piece in the FT about how LFTs are set to become a much more ingrained feature of everyday life for years to come, with ambitions to screen for Flu and other diseases on a regular basis. Some interesting commentary from John Bell and Chris Molloy - who is behind the UK-RATC.
I found the comments about having a testing infrastructure able to quickly adapt lateral flow tests quite revealing - who do we know that has a scaleable test architecture easily reformatted with readily produced, highly accurate regents...
If you copy/paste the headline into google and click the first link, you can avoid the paywall. Use private browsing if it doesn’t work first time.
“Prof Molloy, who has led the UK RTC for several months, says that critics of the speed of the programme need to take a “longer narrative”. Once the consortium is up and running at full capacity, the UK will be “more than 20 times magnified in our ability to produce lateral flow”, he says.
These devices will be used to test for Covid-19 for years to come, he adds, as well as several other diseases we will “go to war on” to tackle the backlog of medical care that has built up over the past 15 months.”
https://www.ft.com/content/c9565eb8-4250-495c-bce9-93d786e3bb9f
Check out Guild E-Sports; especially their recent RNS about their academy - basically an infinitely scaleable revenue model. CEO is a former big dog at a major games developer. High profile backers like David Beckham
Mologic are responsible for the CE filing, not Avacta - if you think you are frustrated by this screw up, I imagine Captain Al is incandescent...
Wyndtum - I share your frustrations with the timelines, but I don’t think you’re argument is completely accurate.
If you read the annual report, it’s clear that LSTM helped design the parameters for, develop and initially validate the test.
As to what happened to Saliva, AS has been clear multiple times that the market demand shifted away from the saliva - a shift IMO driven by the UK Gov changing it’s preference.
IMO this is a significant factor behind the delays; a lot of development time was expended on making the (biologically complex) sample flow through the device. Only to then bin it off and redevelop the test again with a/n samples.
I don’t think you can take the Mologic RNS as proof AS isn’t believed by the market - AS had said they would submit the CE mark very soon; the RNS confirmed the CE mark had been submitted. IMO The SP reacted because the product was materially closer to market, not because Mologic said it.
As to no one rushing our test to market - I would suggest Mologic, our closest competitor, collaborating to design and CE mark the test as well as giving up their own manufacturing capacity to us is evidence of a wider desire to see our test on the market ASAP.
The test is of very high quality - best in class in fact - and the development of that does take time. AS said at the start of the process last year that 12 months would be fast for a conventional development process and that they would try to move faster. In the end, it’s taken them 12 months.
Given the pandemic is also happening to Avacta’s labs - and we know there have been outbreaks there - I don’t think they’ve done badly all things considered.
Obviously AS needs to buy a new Calendar, but he has delivered what he said he would- a best in class LFT.
@Matml74 - it’s in the risk register towards the end of the report.
JDT - I might be completely wrong on this, but I vaguely remember some discussion that Medusa19 had ISO accreditation, which presumably would enable them to CE mark the product as well??
There's been a lot of talk lately about their manufacturing capacity and I find it quite curious that in today's annual report, it states w/r/t to LFT manufacturing will be undertaken by:
"Global Access Diagnostics (‘GAD’), in addition to the agreements with BBI Group, Abingdon Health AND OTHERS"
Which to me implies further manufacturing agreements are in place which haven't yet been announced.
If Medusa19 do have manufacturing capacity, it would make them a likely candidate?
I watched that Miton interview and frankly thought it was a bit of a red herring:
He states Avacta have a CE mark - but he's speaking off the cuff to camera, so I don't think you can really hold down his remarks as definitive proof we have a CE mark.
More likely, IMHO, he is summarizing the investment case for the company and so is omitting/misrepresenting details as he's thinking under pressure and going for brevity.
The last RNS was about the CE mark and to all intents and purposes, we have a CE mark as the chance of rejection is very low.
So when he says 'we have a CE mark' I would bet there is some nuance there being lost owing to the interview format - having done on camera interviews myself you end up thinking faster than you speak, sometimes with a loss of precision in your language.
I doubt PM are privy to information ahead of the market and I would expect an RNS stating we have the CE mark - which given previous MHRA timescales would be likely to emerge this week.
IMHO of course
Reading the period highlights for diagnostics and a couple of things stand out:
- Liverpool School of Tropical Medicine are still listed as providing clinical evaluation services - in addition to Analytical services - for the LFT; does this mean a second clinical evaluation is underway with them? We know from RNS’s there are trials at a UK site..
- LFT manufacturers are listed as GAD, BBI, Abingdon “and Others”; who are the others here and does this mean deals are already in place? Medusa??
Given the series of large deals signed with groups such as Abcam, Point, etc, over the last 12 months, it is clear the companies sales force are able to sell themselves. A brief look on the website reveals a dedicated EMEA sales person for diagnostics supported by a wider team.
So I don’t think there’s any reason to be concerned that when the company states they will be selling into Europe, they don’t already have a clear idea of how that will happen.
For those struggling to count on both hands, the RNS announcing the CE mark file had been submitted was on May 10th - just 9 working days ago.
If you discount the day the MHRA received it as a half day, that drops to 8 working days.
When many people - especially in government departments - are still working from home, it's understandable things take slightly longer than normal to turn around.
It's completely out of the companies hands at this point, but in any case, 8/9 days to review a medical device that has potentially fatal ramifications (think of false negatives and care homes...) is hardly a 'delay'.
We all want to see the product on the market, but we need to have some perspective!