The next focusIR Investor Webinar takes places on 14th May with guest speakers from Blue Whale Growth Fund, Taseko Mines, Kavango Resources and CQS Natural Resources fund. Please register here.
Mr. Big
The thing about ethnically cleansing an area is that it can take hundreds of years for the population to recover. So pro Russian sympathies of the current population shouldn't be reworded. Your argument is a bit convoluted. You say that Ukraine has under invested in the East of the Country. Could that be due to the fact that a war has been raging since 2014 that has cost thousands of Ukrainian lives? Finally, would the situation be better under Russia? Your following statement puts this in doubt.
"God knows why Nato wants to expand otherwise - Russia has been rotting from within for decades and is no threat to anyone. Feck, they can't get their sh.t sorted in their own house."
I'm in the U.S. and can assure you the Yanks have no desire to establish a base in Crimea or elsewhere in the Ukraine. The embarrassment of the Afghanistan pull-out is still fresh in our minds. Besides that, we have enough domestic problems to work out at the present time. Some of which I attribute to Putin. The world needs to stand up to Putin because he represents a rouge nation. He attempts assassination's of dissidents on UK soil, he has shot down a civilian jet liner, they cheat in the Olympics and now he threatens a sovereign nation.
FL
Mr Big,
You say that the Donetsk region is decidedly pro-Russian. Perhaps you should research how many Ukrainians were ethnically cleansed from the area by Stalin. The fact that the area is pro Russian is an artifact of the Holodomor (the Great famine) engineered by Stalin to take control of the bread basket of Europe. It literally takes many generations before any population can recover from such an event. Russia should not be able to annex the region claiming that they are "pro-Russian".
FL
Dribbles. Your handle is befitting of your posts. Sure Russia would want another Lucashenka puppet of Moscow regime in the Ukraine. The Ukrainian people got a taste of rule under Poroshenko and saw how he looted the country to build his palace and they do not want a return of kleptocracy, Who can blame them!
FL
I thought BCART makes sense since it would diversify the PCR business away from infectious disease and into oncology MDx. They are on the cusp of several registration approvals (i.e., later this year) that will open up the IVD sales in the US, China and Japan. The product automates biomarker MDx testing necessary for personalized medicine. Oncology is predicted to be the fastest growing area of MDx for the next 20 or more years. Furthermore, NCYT and BCART both emphasize decentralized and point of care PCR solutions. This is an advantage coming out of the pandemic when many in the work force are retiring in droves. NCYT brings cash and PCR RnD and regulatory experience that should accelerate content offerings.
The RUO market is much smaller and while they have shown 50% sales growth they are far from profitability since they have been building out manufacturing and international sales. The business model is quite comparable to what Cepheid did for automating infectious disease PCR. With IVD approvals later this year sales should increase to 80% or more.
While BCART needs cash they are adverse to being bought out by a large entity like Fisher or Qiagen where they would have a culture clash with portions of the NGS offerings business. The merger would be opportunistic from NYCTs point of view since it would be timed before registration approvals that greatly expand the market and would take advantage of steep discounts associated with BCARTs current cash crunch. However, it probably only makes sense from BCARTs perspective if NCYT has a favorable DHSC resolution to bridge to profitability.
FL
https://investors.biocartis.com/sites/default/files/2021-09/210902%20BCART%20H1%202021%20Results%20Presentation_WEBCAST_FINAL.pdf
Risehall
I had high hopes that an announcement of the dispute resolution would be made this week but no such luck. I can't believe that this has not been resolved through arbitration or whatever dispute resolution provided by the contract. DHSC has the NCYT in a stranglehold and appears to be using it for leverage.
That said, I think the market is also looking for a plan to deal with sales eroding by 50% a year (per NCYT's own projections).
I invested in NCYT and did well with the shares I bought in July 2020. and sold later that year. Unfortunately, I thought it got beat down way too hard and bought in again starting last August. I was impressed by the speed at which Primer Design reacted to the needs for pandemic testing and thought the innovation would outflank competitors. I learned about NYCT through their research relationship with Immunexpress. Both BCART and NCYT have partnerships with Immunexpress. To be frank with you, after 5 years of research and a two contract renewals, I thought the NYCT - Immunexpress team were on the cusp of announcing a blockbuster point of care sepsis biomarker assay. Sepsis has a huge unmet need in emergency medicine and Immunexpress has more than a decades worth of research into host response biomarkers that led to development of Septicyte Lab and Septicyte Rapid. The development of a sepsis assay has drug out a while and now other competitors such as Inflammatix are seeking to bring similar sepsis host response diagnostic products to market. I still think we are likely to get a glimpse of this product later this year but it will likely face more competition than when I first invested in NCYT. A good sepsis biomarker test that runs on a platform like the Q16-Q32 that is already in use in Emergency Rooms and ICU's would fill a major unmet market need. The IT-IS hardware has already been deployed into many hospitals where the test would be most useful. So I have no doubt that Sepsis biomarker assays are a high priority for NCYT. If this assay looks good during validation then I'd look for NCYT to buy out Immunexpress.
Good Luck
FL
Poidster
R&D to develop new assays is expensive, global expansion (especially with their own salesforce is expensive). IVD registrations in each geographic jurisdiction is expensive . BCART has stated on numerous occasions that they want to remain independent rather than going the route of a Cepheid and being acquired by a large diagnostic company. The buyer/partner is going to want any acquisition to be quickly accretive to earnings but BCART is still likely to be a couple years short of breaking even. BCART has a razor and blade business model. Once the console placement is made then the cartridge use ramps as the user gets used to the time and labor savings associated with Idylla. The problem is that the initial placements were slow since they were growing the content assays that could be run on the console. They are reaching the point (at least in the EU) where they have sufficient offerings to entice adoption. The advantage to this business model is that it can produce many years of compounding growth (i.e., like Cepheid). The disadvantage is that the start up is costly as the company has to place the consoles at relatively low margins knowing the profit is in the future use of the cartridges.
Regards FL
Baby Huey,
Last point , POC infectious disease MDx is a very crowded space. Point of Care oncology is a very fragmented market with no single dominant player. Roche and QGEN are behemoths but still do not have a lock on the segment. Fisher and Ilumina are huge in NGS but as shown in the initial links Idylla can be used in a synergistic manner with NGS.
FL
Cash is not the only thing that is being burned. In August they had a warehouse fire that destroyed most of their PCR reagents and significantly hampered operations for 2021. So instead of 80% sales growth they finished with 40%. They brought a high throughput cartridge manufacturing line into production that was designed to drive down the COGS and improve margins but the fire hit just as the manufacturing was ramping.
Outside of the EU where they have several IVD assays, BCART offers primarily RUO assays in the US, Japan and China. That begins to change in 2022. MSI should receive US FDA 510K approval in the next 2 months. China and Japan registrations EGFR, MSI and BRAF are anticipated later in 2022. They began building a 3rd cartridge manufacturing line in China hence additional increase in cash burn. The EGFR product should do well in Asia since mutations in this pathway account for about 50% of the NSCLC in the Asian population. Also, NGS is not as widespread in China. The emergence from the Pandemic is an Ideal situation for BCART since the system allows assays to be conducted with minimal staff and the cartridges can sit on the shelf for up to a year until they are needed. These features are ideal for social distancing in the lab.
BCART dumped Fisher as their distributor in the US and built out their own sales, servicing network. While this was expensive, it was necessary since Fisher sells competing NGS equipment for small labs and POC use in hospitals. Having your competitor selling your diagnostic systems was not a good situation. Long story short they have been burning about $60 mil EU per year placing the consoles globally but are just getting to a large sales inflection point where margin improvement should occur rapidly. Selling RUO product is not that lucrative, and that is one of the future endeavors that Novacyt is pursuing (based on yesterdays PR).
I think a NCYT match with BCART would make sense for NCYT since it would diversify away from infectious disease, the growth in onco is expanding at least 50% per year rather than contracting at that rate as Covid becomes endemic. Based on the speed of EU marking I believe the NCYT has one of the best R&D and regulatory filings groups around. These are areas where BCART could use a shot in the arm. The Idylla system suffers from a chicken and egg problem. They need content (i.e., assays) to make console placement/purchases more attractive but they need more consoles deployed to make the platform fore attractive to 3rd party assay developers. SkylineDx (a dermatology partner) appears to be greatly accelerating the pace of their Merlin melanoma assay and should be starting clinical validation later this year. To me, this indicates that the RnD necessary to develop an assay can be cut to a year rather than 3 that BCART has been taking. BCART wants to avoid being absorbed into a large competitor, NCYT might make sense as a merger part
NCYT desperately needs to show a future growth path beyond Covid, BCART desperately needs a cash infusion but is on the cusp of worldwide registration approvals of a number of RT-PCR oncology MDx assays. Oncology is projected to be the fastest growing area of MDx for the next 20 years. BCARTs Idylla system automates assays such as EGFR, MSL ALK, ROS1, BRAF etc allowing results to be available quicker without the difficult interpretation associated with NGS. Also, Idylla can resolve about 25% of the NGS tests that fail due to degraded DNA. My bet is that NCYT's expertise in PCR could greatly accelerate the rollout of content assays offered on the platform. An increased number of assays would make the platform more attractive. NCYT would get access to fast worldwide growth not tied to the pandemic and would also get access to the Phillips IP that makes point of care oncology testing possible. NCYT does not presently have sufficient cash for an outright buyout, so a merger would seem to be most logical approach. Here is some info on BCART, which is trading at all time lows.
https://investors.biocartis.com/sites/default/files/2020-11/201112-bcart-cap-markets_day2020_final.pdf
https://pubmed.ncbi.nlm.nih.gov/35042754/
Please excuse my ignorance if these questions have been discussed already. I'm in the U.S. and recently came accross the LSE board for NYCT.
At the end of H1 2021, it looks like NYCT Kitchen sinked the reporting period by taking every imagionable charge possible. They wrote off the disputed DHSC Revs, they wrote off aging reagents took a charge for product misalignment etc. It appears that this paved the way for the new CEO to beat expectations. If he salvages anything from any of the charge offs it will be seen as a win. Is this view right or wrong?
2nd question comes from the Investor day call. I believe I heard discussion the the UK gov can reward critical pandemic test suppliers with tax credits that can be applied to offset future tax liabilities. Anyone out there have an opinion as to whether these credits are likely to be used as part of the DHSC settlement. It seems unreal that any company would let this situation fester as long as it has without pushing arbitrators for quicker resolution unless there is a carrot on the other side. I could see where this would be of huge value to NYCT since their Revs and profits are quite volatile.
In disclosure, I'm a frustrated long but can't see selling when their cash position looks to be strong and since other MDx companies with less attractive assets and IP seem to be taken out at substantial premiums.
FL
GenomeWeb posted news of a couple deals last week. NCYT looks like it could be quite a bargain.
Labcorp to Acquire Personal Genome Diagnostics for up to $575M in Cash
Published on Dec 23, 2021
Quidel to Acquire Ortho Clinical Diagnostics for $6B
Published on Dec 23, 2021
FL
Please excuse if this has been covered already or if I have misinterpreted some things from quick reads of the PRs. It looks like NCYT has taken a host of charge offs including:
For the accounting of the DHSC dispute;
Charge offs for product misalignment;
Charge offs for aging reagents;
Are they trying to set a clean slate for new management so they can come out and have good results right out of the gate? Or are they trying to remove issues that might be impediments to selling the company? It appears now that resolutions are likely only to bring upside, almost making it difficult for the new management fail.
Have I misinterpreted things?
FL
Greetings from US
False negs are the worst type of error. Nothing like telling someone that they are good to go about their lives when they are infectious. In the US the largest fast TAT POC COVID test was just recalled for high false positive rate. The Trump administration relied heavily on Abbott's ID Now - we all saw how well that worked out.
https://www.360dx.com/regulatory-news-fda-approvals/update-fda-classifies-abbott-sars-cov-2-molecular-test-recall-class-i?utm_nl_name=coronavirus-bulletin#.YW36YfrMIb4
I haven't has a chance to listen to the AGM, was there any discussion about the POC Sepsis test /relationship with ImmunExpress? After 5 years it would seem like it should be bearing fruit by now. I'm, impressed with the R&D and quick product development at NVCT. However, I'm looking for some color for what products they foresee after COVID starts to wane. Sepsis is a huge unmet need so fast MDx test results would be welcome.
Regards FL