Seriously undervalued15 Mar 2025 11:50
Verici is IMO clearly severely undervalued. Mr Market (Mr AIM Spivs Market) must be concerned about (a) whether the delay in Medicare approval means that they will be forced into another placing, (b) whether there is a big holder or smaller PIs selling for tax year losses, (c) the risk of not getting FDA Medicare approval.
Personally I'm not concerned about (b), the tax year is almost over.
(c) I think this is a very very small risk. Tutivia fulfils a proven market,has been proven effective and safe, and is actually being used in hospitals. The approval is just a formality in my view, but I suppose there is a risk of continued delay due to the chaos unleashed on all federal agencies by the self-destructive fanatics who now run America.
Re. (a), clearly the FDA Medicare delay won't have helped the forecast cashflow. However they are still selling Tutivia privately to transplant centres and we will see the revs in the FY results - unlike many AIM companies it's no longer a pure research company and is making money. They said that they had a cash runway well into 2026, so I would think this is now autumn 2025. So *if* they need to raise money, I see this not taking place for another 3-4 months.
The American shareholders (Mount Sinai) must be shaking their heads in disbelief that AIM is valuing their IP and products which have either no competitors or significantly better performance, the large TAM, the partnership with Fisher, the research advisory group which is packed with global superstars of the transplant field, and the expanding revenues, at well under $10m. If it was listed in the US it would be at 10x today's market cap. Sadly it's not - but that gives risk-tolerant investors an opportunity....
If the undervaluation continues very much longer, I would think the company must become a takeover target by a US buyer? I mean they would be laughing at the cap. Someone could offer 10p tomorrow ($30m, chump change for any significant US healthcare company) and the management would probably feel obliged to recommend it. The instis who first bought in the 9p placing would probably accept a small profit with relief, as would PIs holding from higher up, and obviously anyone buying at today's levels. And no, takeovers at 300-400% premiums are not unheard of.... The Mt Sinai investors hold the IP, but their licence would presumably carry on with any new owners, who would only buy the 92% that Sinai don't own - so no difference for Sinai. It seems like a plausible scenario to me if we stay down here much longer - loads of UK minnows have been snapped up by US sharks in recent months... Maybe Thermo Fisher would be interested...?
NAI
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