RE: Interview22 Oct 2024 11:17
Typical that all the action happens on a day I was busy, so I've been slow to catch up.
Great that the deal is now done. Most of us expected this, but it removes uncertainty over funding and revenue, and confirms this test really is heading to market in the US.
Unlike some, I'm less concerned about forecasts for sales and projections. Why? Because generally companies make these up to be reasonable and plausible for whatever investment case that are trying to make. They are never very accurate, and ultimately the perfomance can be way better or worse (and I've personally seen both happen in my own employment). With the team we have in the US, the past results we've seen in the lab, and the generally poor performance of the current incumbant, the CT scan, I think this will do well.
The uncertainly that is left is over the equity stake of ciz in Bio. MOU said 10%, but this has not been repeated in the RNS yesterday. Instead in mentions SAFE. These can take multiple forms, and without the details, its kind of hard to put a value on it.
https://www.fe.training/free-resources/venture-capital/simple-agreement-for-future-equity-safe
If its broadly 10% but with various trigger conditions, or something totally different, we don't know. I think this will limit any gains until we know what this is, as calcuation will for now have to be mostly based on 10% royalty expectations.
My own guess, and it is a guess, is that the bigger funding package is still not agreed, and likely depends on some of the test accuracy figures coming out of the current hospital trials. There may be equity convertion dependent on results. But that is a guess, and i have no idea when, or even if, we will find out the T&Cs here. This does need clarity.
So overall, good progress, but with questions outstanding.
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