Bull case20 Feb 2024 18:25
Bull case
Ciz share price has behaved pretty much like any other Biotech or small pharma. Price always drops when there is no buy pressure or investors lose patience or think they can go elsewhere and return later. Biotech takes time.
Yes, this helps fund York's lab, but these labs are where the key ciz1b research has taken place. Prof Coverley is personally invested, as is her husband and co-founder of ciz. Success will make them both very wealthy.
There are many years of science behind the test and it had high accuracy and specificity when done manually in a lab. (Published research)
Yes, some key investors are cancer research orgs, but they will be very keen to see this test to market, which would mean major publicity and kudos for them.
Ciz does also have its TR1 investor from 2022, who is still invested.
The directors were recognised by the remuneration committee as having below market level salaries, but all took options in leu of salary increases to keep cost overheads low. This also shows confidence in the business.
Ciz has made significant progress since IPO. It has overcome obstacles on scalability and met milestones that have allowed it to commence to clinical trial design (not clear if trials have started) and to scale up reagent production.
Timescales are indeed not always made clear, but remember that the reason our overheads are low is because partners are funding parts of the development. So we have dependency on other organisations. Timescales being announced and broken will tank the share price, so it's wise not to do this.
The royalties agreements have not generated revenue because we don't yet have a commercial test! There is a huge market for the test once available.
Our partnership with BioTechne gives us access to that global market, and to the scalability we need to deliver the test. There is little doubt that if the test works as well as the prototype, Biotechne will want to be involved, or to buy ciz completely.
CDT has certainly not done well short term, but even at around the $3 level it would still fund ciz for a year based on estimated cash burn rates (see Charles Archer analysis). Add to that the 500k loan facility repaid in shares at 2.1p, which ensures we are not ahort of funding. In this market thY is very important. This facility will indeed dilute, but I believe these can be exercised by either party, so if ciz is a sucess, they *will* be exercised. So this dilution is already baked in.
No RNS since September? Well Allan told us in the Biotechne interview that he would only release significant news. He knows that this is now at a key stage and the only news that matters is either the test is in the market or we have struck commercial deals.
The upside on ciz from 8m market cap is huge. An LDT perhaps takes us to 50 mil? Likelihood of a point of care test, maybe to 150mil? Likelihood of extension to breast cancer, maybe 300m? Of course, the likelihood is we'll be bought w
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