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Hi Tav,
Your analysis of the numbers of sales from national screening programme are spot on. My fear is that missing out on Transform will highlight the scale of the missed opportunity to many that are still taken in by the spin from Burrows. It will also bring the incompetence and ineptitude of the BoD into sharp focus.
If I am right in my suspicion that sales are stalled by the lack of clinical validation then they will miss the quickest, largest and most cost effective way to attain that validation and sales will continue at insignificant levels for the foreseeable future. OBD certainly cannot afford to finance their own randomised control study at a scale that would convince the relevant regulatory bodies. In my opinion the market will respond appropriately and it won't be a positive response.
@Krull.
Our CEO seems to be economic with the truth habitually.
In the case of the critical sales person and his belief that this was a credible explanation for declining sales, he may just have demonstrated that he is too dumb to walk upright.
@ Serendipity.
A University based study with a budget of just over 100k and focused on a small number of black men does not cut the mustard. Go read the National Screening committees remarks about the Stockholm 3 test which has been used on a cohort of thousands. They do not regard it as adequately diversified by age or ethnicity. You don't get around such concerns with a £100k University project. Transform on the other hand has a budget of £42 million!
@ Mr Hope.
There is a long history of AIM companies going bust shortly after 'successful' placings. A placing is, in reality, an indicator of failure as it makes plain the fact that the company cannot survive without external funding from shareholders. They need to demonstrate they can sell, and if, as I suspect, they cannot do so because the medical community considers there tests to be inadequately validated, they will continue to struggle to do that.
Institutional investors are not immune to making losses in AIM. Maybe Vulpes felt the need to demonstrate confidence in order to shore up the value of their existing investment?
I can see this dropping to much lower over the coming months. Transform will soon announce participants and if OBD is not involved it'll be a blood bath.
@ Krull ,
They must surely know that experts in the field like Prostate Cancer UK, who recognise the potential of the test, are demanding further extensive validation before they will consider the test to be proven? Medics in the US may well share that view. There is certainly a clear and demonstrable reluctance for medics to adopt CIRT yet we were told just a couple of months ago that sales had fallen from the peak of 3 a day because one critical sales person took leave of absence. I had hoped he/she would be back on the job by now and that with a sales team bolstered by yet another two V.P.'s, sales growth would have prevented the need for such a significant dilutive placing.
Sometimes I wish I could be a glass half empty sort. It'd save me a lot of money.
Serendipity,
The Transform trial will be fully funded by Prostate Cancer UK in conjunction with the UK govt. Far from costing OBD money it would in reality cover some of the overheads and establish a meaningful revenue stream for the PSE test. Furthermore it would ensure validation at scale in a randomised control trial. I suspect it is the absence of such evidence that has prevented the take up of tests in spite of the fact costs are covered by insurers in the US (and in the UK in the case of CIRT).
Proper clinical validation at scale is needed for these tests. It is, frankly.negligence on a massive scale that OBD has not prioritised the Transform trial.
@Serindipity.
I have been a strong advocate of OBD's participation in Transform and first wrote to investor relations about this about 6 months ago. Burrow's was totally unaware of the potential and basically read from a crib sheet to appear informed during his most recent webinar. He stated that the company has employed a third party government lobbyist to try to ensure participation. When I asked which member(s) of the senior management team were responsible for ensuring participation I got no response. Do not hold your breath in anticipation that OBD will be participants in the biggest national screening trial in decades.
I find it astonishing that company of circa 50 employees that sells less tests per day than the fingers of one hand needs 3 laboratory facilities. Why do we continue to pursue the notion of a U.K. lab to meet the local market 'demand' when no such demand exists? Why, when Burrows has once again stated that he is prioritising the US market, do we still have a laboratory in Malaysia?
It is sheer extravagance and cannot be justified on any commercial basis.
Why is the Chairman not challenging such blatantly unjustifiable overheads? Whilst he is at it he could perhaps push the notion that we cannot afford to pay a CEO more than half a million a year when he has failed to secure any meaningful revenues yearsafter the launch of the company's so-called flagship product.
By refusing to provide a full year of working capital the market is sending a message, but will the BoD heed the message and cut costs accordingly? I say no. They have no commercial acumen and are only interested in lining their own pockets at the expense of their shareholders.
Oxford BioDynamics PLC (AIM: OBD, "OBD", the "Company" and, together with its subsidiaries, the "Group"), a biotechnology company developing precision medicine tests based on the EpiSwitch® 3D genomics platform, is pleased to announce that it has successfully raised gross proceeds of £9.9 million pursuant to a placing, conducted via an accelerated bookbuild process (the "Placing"), through direct subscriptions (the "Subscriptions") and a retail offer via the PrimaryBid Platform (the "PrimaryBid Offer") (all together the "Fundraising
So Wiseys which bit of "Pursuant to a placing AND a retail offer' is giving you a problem.
The annual burn rate is about £12 million before you take inflation into account and there is no indication that they have plans to reduce that anytime soon.
What they got doesn't give them enough.to cover the current burn rate for a year.
If our Chairman had a backbone he'd be demanding Burrow's resignation and a cost cutting programme to try to restore some shareholder confidence.
Wouldn't waste the train fare.
Whatever happened to the non-dilutive fundraise that was anticipated from the numerous 3rd parties queuing up to invest in unvalidated 'products' without a single sale?
They have no shame and will say anything that they think might keep the gravy train chugging along. I note too more expensive jollies to conferences are lined up and thank goodness for that as its hard to imagine what sales would be without their impact.
The shift from exponential sales growth to devoting 2024 to analysing sales and marketing strategy to understand why nobody is buying is utterly laughable.
As I have said, we should push for publication of the KPI's and performance metrics of this bloated and ineffective senior management team. It would not surprise if they do not have any and in that case the Chairman should come under pressure to resign.
Sales of CIRT struggling to get above 1 a day suggests there has been no value fthus from the recruitment of Mathis and Arrivo.
I note the use of 'US based' in the description of the gravy train passengers. This suggests to me they have done nothing or been unsuccessful in their attempts to be included in the Transform screening programme. The US base is their excuse for this shameful failure.
The question needs to be asked why they launched PSE ahead of schedule when they now say they need to review sales strategy and seek inclusion in guidance notes to achieve meaningful sales. Sheer ineptitude for which heads should roll. Sadly they won't.
Semantics to some extent, but I don't entirely agree with Tav when he says nothing has been done to market the products. Remember Burrows has overseen rapid growth of a Senior management team that now includes:
Burrows. CEO
Akoulitchev. CSO
Stockdale. CFO
Hunter. CDO (D for Data)
Guiel. COO
Heaton. Lab Director/Pathologist
Abdo. VP Clinical Diagnostics
Arrivo. SVP Business & Commercial Development
Blum. SVP Marketing.
Mathi V.P. Market Access and Business Development.
That's a CEO on >500k a year plus another 9 guys that are most likely all on 6 figure salaries in a small company of about 50 employees total. No wonder the burn rate is ridiculous.
Several of these have 'market or marketing' in their job titles yet the company is struggling to sell a handful of tests per day.
What are there KPI's and performance metrics? How are their roles differentiated and what the hell is the Chairman doing to ensure their roles are effective and justified?
@agakhan,
I'm not overly concerned by the emerging competition in the prostate testing area but only because OBD is supposed to have a conveyer belt of tests based on episwitch. I am very concerned by the inability to gain sales and by the gravy train ethos of the company.
@Kingalf
https://news.cancerresearchuk.org/2019/11/21/urine-tests-detecting-cancer-in-pee/#:~:text=It's%20very%20helpful%20when%20patients,can%20also%20get%20into%20pee.
Exosomedx claim to have 'validated their test on a larger cohort than OBD and the results are published in peer reviewed medical journals.
Hi Agakhan,
I think I did compare the tests and concluded that the published stats suggested PSE was superior in terms of performance. Nevertheless the performance/cost issue is increasingly valid as new competitors emerge.
https://www.exosomedx.com/sites/default/files/2021-02/PCP%20White%20Paper.pdf
I have literally just found this link so don't yet have cost info.
A placing is a certainty. The bluster about non dilutive funding from a sale of IP assets is nonsense. They do not have time to reach an agreement before the funds run out and the management team will not want to get their snouts out of the trough just yet.
It is hard to identify a senior manager in this company that doesn't have a second job elsewhere so remember that when they say they are 'focussed'. Remember too that, by a remarkable coincidence, many of them have shared past employers.
Gravy train much?
@Kingalf,
Personal opinion is it will take a placement to raise the required funds. If I remember correctly even Burrows spoke about 'very preliminary' discussions (or some such phrase) and you don't go from swopping business cards to agreeing a commercial package to avoid OBD running out of money in a matter of weeks. What rights would the 3rd party get in return for their ££'s? Would they accept instantly or look to negotiate? What about due diligence? Will they simply accept market projections from OBD or would they want to identify potential barriers to commercialisation and sales? What about routes to market, competitors, future growth prospects?
All basic and legitimate questions that don't get answered quickly. There would be a small army of accountants and lawyers involved. Put it down to more unrealistic bull from a guy on a cool £0.5 million a year.