Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
The other comment that stood out yesterday was that the cash runway was required to strengthen the negotiating position, so that may have also been a clue as to what prevailed here.
I speculate that there were some prospective smallish license deals bubbling away (hence the previous bullishness), but the negotiations didn't go too well. Perhaps the avacta negotiating team weren't strong enough, or perhaps the second party felt they could get away with undercutting the deal based on Avacta's financial situation. At some point someone came in and said a. the terms of that deal are selling avacta down the river and b. it is likely to damage future deals with bigger players (also hinted at in yesterday's webinar), and so the whole deal was pulled. At which point avacta was at the mercy of the city boys, resulting in the heavily discounted placing.
So, yes of course any investment is a risk, however, my feeling is that it was the timings were maybe 12 months out for Avacta to have been able to effectively leverage what they have in any negotiations. I feel more confident that with the growing body of data, especially with the ongoing 2w trial, and the cash runway, that subsequent negotiations are going take place on a more level playing field.
Given the obnoxious fund managers we have seen paraded on vox markets by Paul Hill, and the throw away comment by AS about PI's importance, I suspect the truth is somewhere along the lines of:
A small amount was sold to respectable funds to give a semblance of legitimacy, and the remains were sold to cretinous hedge funds with the strapline "you can have these cheap and double your money - this is a private investors wet dream and they'll provide the liquidity" (excuse the awful pun)
Now I don't think Avacta management went out of their way to concoct this scenario, and reckon that the UK financial markets just suck at the moment (as evidenced by a few recent anecdotes of biotechs having a really hard time raising funds) and this time they were just caught out, plain and simple.
Again, when they talk about market size of 1,2,3 bn, do you assume that translates into revenue equivalent to 100% of a given market? I certainly never did, and I’d be far happier for Avacta to take the most direct route to market for ava6k even if that meant a 100m, 200m revenue. That would do the job to get Avacta bought out.
They can start making money from ava6000 if approval given during/after phase 2. This could give the option to go phase 3 alone although it sounded like phase 3 would be with a bigger player, and frankly in this scenario Avacta already bought out.
That does put the Avacta raise in perspective somewhat (although I haven’t researched the other company in question). Hopefully we can get out of this filthy AIM pit and on to something bit more serious asap.
Confirmation of what I posted previously, thanks. Like I say, a prolific poster just out to benefit their current position - best ignored. You were just lucky to get out of that he1 abomination. It could have been a wipe out event for many, and if you had any investing integrity, like you always claim to, you would have urged caution investing in that type of company, rather than ramping the hell out of it.
Why in god's name were you ramping he1 wyndrum? How much might it have cost people who listened to your tripe? It also applies in the other direction people. Wyndrum wants in to Avacta at 40p so spends inordinate amounts of time posting negative and spurious nonsense about Avacta. The share price might never get there resulting in opportunity costs for anyone swayed by the incessant drivel. A highly dangerous individual to pay any attention to.
Oh yeah, that's perfect icecool. Ramping the hell out of about the most speculative share you could possibly get involved in. That's exactly what I was getting at earlier today, wyndrum is a complete and utter fraud.
Yeah it's just a straw poll, I don't recommend anyone basing their investment decisions on it. I still maintain however that the share price would instantly rerate to, or even possibly overshoot the offer, based on the speculation that it was a ridiculously low offer price, BP have just validated the platform, and the final offer is likely to be far higher. That's even before, as BV points out, they don't get shown the door first.