Member Info for GLR1990

https://www.abc.net.au/news/2020-05-26/china-coronavirus-wuhan-testing-millions-in-10-days/12283202

Wuhan authorities on Monday said they had managed to test 9 million people within just 10 days.

The campaign is expensive. Wuhan health authorities have said there is at least 1 billion yuan ($220 million) allocated to ensure all 11 million people are tested.

"It's very ambitious, but if anybody can do it — they can do it in Wuhan," Professor McLaws said.

Professor McLaws said mass testing was worth it because it would provide "a lot of very rich scientific information".

"It's going to answer a lot of questions," she said.

This is a great endorsement, NCYT should be proud that as of the 20th May 2020, only six companies in the world have received 100% WHO approval, I am sure being part of this group will lead to future sales

Morning all

what's everyones rev forecasts for May 2020, total revenue booked/contracted in May and Total overall revenue?

My first forecast was ~£210m GBP total booked/contracted, however that may be ambitious
This was based on the following

12th March Rev 2.3m
12-16th March Rev 3.7m - increase of 1.4m GBP - Average £350K per day
16-30th March Rev total 17.8m - increase of 14.1 GBP - Average £1m per day, daily increase of 180%
30th March - 29th April Rev total £90m - Increase of 72.2m GBP - average of £2.3m Rev per day, daily increase of 130% on the last total of £1m per day

Taking into account the increase in rev per day, my calcs predicted 69% increase in daily revenue booked/contracted for the month of may, if true this would result in a total revenue of £208m GBP, or an average of £3.9m per day

This does take into account future capacity of course why I put booked/contracted, just because they can sell 8m tests PCM in May and 10m tests PCM in June, that does not limit there total revenue booked/contracted to £90m for June, hence the NHS order for the next 6 months, these longer orders are what we really want to see to be able to forecast the Y/E EBITDA and longevity of the revenue stream

Taking into account a good portion of that £90m revenue is the NHS order, and that is close to home, I would still be very happy with a total revenue booked/contracted as of May 30th of ~£170m GBP, an increase of £80m - EBITDA at £40m for may, we can easily cover our MCAP in cash in 4-5 months time, that would make this an incredibly attractive investment

In terms of SP predictions, anything over £200m booked revenue and I'd be happy paying sub £5

What about this article?

https://www.imperial.ac.uk/news/197236/rapid-coronavirus-test-receives-major-funding/

"The researchers aim to complete the development phase of the point-of-care diagnostic device, called QwikZyme, within the next six months."

It's good... but it's not quite Avacta

AVCT has a three pronged approach to CV19 - among other potential blockbuster treatments

AVCT has the following for CV19
- Potential Theraputic treatment which can block CV19 cells entering human cells via the ACE2 receptor, GSK recently invested $250m USD to find this very scenario in a different company (called ViR)
- Arguably the worlds best CV19 test kit (on paper) in development, teamed up with BooHoo and Cytiva/Danaher to offer it globally with results in 'minutes'
- Lab based CV19 test kit with Adeptrix, in talks with biggest manufacturers in the world

AVCT also has now shone a spotlight on its 100% owned affimer technology, through the pre-cision treatment can target specific areas of tissue and be used in Cancer therapeutics, they are now going to be a globally recognised name which should attract attention to this ground breaking, advantageous technology

In very very short, thats why AVCT is trading over £400m MCAP, because people strongly believe it will be bought out for north of £1bn (In fact most estimate around £3-4bn when you look at competitors) in the future

I am heavily invested in NCYT as well as AVCT, but really if you dont understand why AVCT is not currently valued at £400m and heading north, then maybe that answers it somewhat, IMO this doesn't affect NCYT as NCYT already has the global network, a superior test to all competitors CURRENTLY on the market and thirdly enough demand to generate a billion in revenue themselves over the next 6-12 months, hence why I am invested in both

Not advice please DYOR

Sorry if this has offended anyone but a lot of people are invested in both (I am looking to position in GDR as well) and personally believe the antigen market is going to be rewarding for all three

We need to get approvals in Africa, if we do not already have it (does the WHO/CE mark cover this?)

https://www.bbc.co.uk/news/world-africa-52478344

Also for anyone saying they wont be able to meet demand, African countries can't even get hold of supply because of competition for testing kits

Quote:- “Even where there is enough money, many African health authorities are unable to obtain the supplies needed,” the commentary points out.

“African countries have funds to pay for reagents but cannot buy them.”

Even low-margin, low-tech items like swabs to take samples are in short supply on the international market.

“The collapse of global cooperation and a failure of international solidarity have shoved Africa out of the diagnostics market,” said Nkengasong, pointing to the fact that over 70 countries have restricted exports of medical goods.

https://www.thenewhumanitarian.org/news/2020/05/18/Africa-coronavirus-test-kits

This is very sad news, these countries need testing and they need supply

I hope NCYT can contribute to save lives here, NCYT certainly wont nearly be able to supply Africa in the quantity needed, considering Nigeria alone has a population of 200m

Regardless, I have seen a few posts on here talking about 'they wont be able to meet demand' - if that's what you believe then you are seriously under-researched

Examples:-
https://www.bbc.co.uk/news/world-africa-52478344
https://www.thenewhumanitarian.org/news/2020/05/18/Africa-coronavirus-test-kits
https://qz.com/africa/1854277/african-countries-struggle-to-get-covid-19-test-reagents/
https://www.news24.com/SouthAfrica/News/south-africa-cant-get-enough-covid-19-testing-supplies-heres-why-we-should-be-making-our-own-20200511
https://www.voanews.com/africa/african-nations-try-overcome-shortage-covid-19-test-kits
https://www.theglobeandmail.com/world/article-africa-muscled-aside-in-the-global-race-for-testing-kits/

Latin America
https://www.bloomberg.com/news/articles/2020-04-08/test-scarcity-makes-tracking-virus-in-latin-america-a-crapshoot

Rich vs Poor Countries
https://www.nytimes.com/2020/04/09/world/coronavirus-equipment-rich-poor.html

Finally, global competition for tests
https://www.rferl.org/a/coronavirus-reagent-delaying-expanded-coronavirus-testing-/30563198.html

"there's never really been a shortage of chemical reagents before now."

But in the face of this pandemic, the British In Vitro Diagnostics Association's Doris-Ann Williams told The New York Times, "all the major countries in the world are wanting the same thing at the same time."

"Major global test-kit providers have scrambled to boost their own production to feed the lucrative European and North American markets, increasing supply but also crowding out upstart providers of urgently requested test kits and largely excluding poorer countries that can't outbid richer markets."

Wow I maxed it out
Last sentence was it should trade much higher (PE) than cash, as it will be making further cash-flow into 2021*

The GLR post below is not Investment advice please do your own research!

Typo *Margin sales in 2021 not 2020

For everyone saying at some point this share will crash, every share eventually spikes up on hype/anticipation and then resides to a more reflective value, however let me explain why this is not a bad thing for NCYT and give my two cents

NCYT is cash generative, AKA they put cash in the bank
This provides an underlying support for the share price, providing they dont have huge losses / admin expense / costs / overheads etc. (which they dont) - an investor can use the cash pile as a baseline 'bargain' investment

NCYT has £9m of cash in the bank as of end of April (I know thats not a great start but hold on) however they had booked £90m in contracted revs at the end of April (50% EBITDA) so lets just say around £40-45m cash for arguments sake

Lets say NCYT running costs are £5m per annum (they're not, but lets just say that) then if NCYT end the year with £50m in cash, costs of £5m per annum, and a forecast rev in 2020 of £10m - in theory the share price should not retreat below £50m as the cash is protected and they are making an operational break-even, arguably the stocks should trade higher than £50m (as you get the assets and company for free, but that's not the point I am making, I am making a point about baseline cash position) So, as a total bottom line security blanket, that £50m is in tact, at least for another 12 months

So why does this matter?

Well over the next 3-4 months, I personally anticipate total sales being north of £500m - arguably higher if they can ramp up production / capacity

Lets say they fill capacity, 10m tests over the next 3 months so 30m tests at £9 per test, that's an extra £270m in revenue at 50% margin - convert to cash we have an extra £135 in the bank, add that to April and May (May not yet known) and again we could be looking at an additional £200m revenue (at 50%) so a further £100m in cash in the bank - thats £235m in cash in the bank, THATS HIGHER THAN OUR CURRENT MCAP! IN 3 MONTHS! (Agree they need to fulfil demand etc. and meet targets, but all in theory)

So in 3-4 months, if NCYT have over £200m in CASH, then that supports the MCAP, in theory it shouldn't go any lower than £200m, in fact the forecast from achieving this cash pile in 2-3 months would likely mean the share price / mcap goes in to the billion GBP range (15p+) however back to my first point - when people say this share will eventually drop, I agree with that, but I see it dropping from 15-20p not from 3p to 1p! 1p is fantasy because the forecasted CASH covers 1p easy

Again at the end of the year, if the EBITDA is 400-500m GBP - again this supports the MCAP because there are no huge costs, NCYT would only have to make marginal sales in 2020 to support the cash pile

I am sure there are some errors here and LSE only gives you a small window so its hard to scroll up and check, in summary a cash generative stock with low costs can supports its MCAP with a cash pile, it really should trade higher (PE) and likely wou

Most encouraging part of that presentation was looking for a tie up with a large partner

He makes everything sound so simple as well, blocking the ACE2 receptor seems to be a very solid near term treatment, I seriously cannot see AZK/GSK or someone along those lines announcing a collaboration, hopefully a large investment up front like the GSK/ViR collaboration which was $250m (they paid a 10% premium I believe)

AVCT could arguably spin out a division and offload a % of that to a large pharma, that might be a better approach

Talks more about AVCT than NCYT

I am invested in both, both have incredible upside to their current MCAPS
NCYT has a gold standard Lab test, 100% efficiency, and as of the end of April, sold/contacted £90m in sales - plus innovation, ramp up in demand to 10m tests, which IMO will only increase

AVCT has technology (Affimers) that can be used on a range of platforms for diagnostics and therapeutics

This is like Intel arguing with Microsoft, chill out!

Both are in one of the hottest markets in the world right now, the global antigen diagnostics market, you really believe once all these other sectors start announcing 50% reduction in revenue, H1 figures come out with profit warnings and PE ratios crash in other markets, that investors aren't going to look at the sales and cash pile of NCYT (and to come from AVCT) and move their cash over here?

#NCYT made £90m by the end of April, whilst everyone else was putting out statements saying we dont expect to meet targets and need to conserve capital

All IMO not advice please do your own research

For what its worth I also like GDR! I haven't invested there yet however and don't claim to know much about ODX but that is Antibody so a different market altogether, but the same logic can be applied to those in terms of what markets are going to remain highly profitable over the next 3-6 months at least

Is it common knowledge that Genesig has been approved in Japan?

Small Pharma company on LinkedIN 3 weeks ago said we had been approved in Japan, could be BS and they're just selling it
They are called Filgen Inc.

Just wondering because it appears we are approved in Mexico but have had no update?

Still dont get the rules around releasing information! Should this all be RNS'd? Or RNS-R?

Or can they simply wait until the end of the month to provide monthly updates, appears so.

Having re-read the RNS more than once this morning, I am more than happy

Other competitors are making most of their revenue from B2B, this is an exclusive B2C platform, what do you need to sell direct to consumer?

- E-commerce
- Logistics Network
- Respected BRAND
- Customer Support
- Resource (People)

This agreement allows AVCT to focus on getting the test ready, whilst setting up all of the above at the same time, meaning you get the advantage of

- Speed to Market
- Pre-order Capacity
- Sales Support

Not only that, but being already invested in the company, this has been signed as a profit share agreement, therefore you also get better margins and more importantly, care/effort from the distributor than you would say from the likes of Amazon etc.

Market sold a little because they wanted a big name, but a big name doesn't do anything for brand awareness, and it also eats more into your margins - REMEMBER AVCT is not about a CV19 test kit, its about the affimer platform (and others such as PRE-Cision)

AVCT has a chance to be a globally recognised pharma, why would they want to hide behind a big name?

Can’t believe you guys messaged :-) brilliant response
He’s a BDM so relies on commission, not like he’s going to say sorry we have no stock, but that’s a solid response

In terms of the never ending AVCT vs NCYT war, and since I am heavily invested in both, I will simply say this

Do you really think AVCT would be bothering with a BAMS test with Adeptrix if there wasn’t a monumental market for lab based testing as well as POC home based

Don’t get me wrong home based / portable is the next best innovation, the upside for AVCT is huge, however so is the upside should NCYT Both from lab and the future mobile test

Expecting both to surge over the next 3 months

NCYT also have gold standard, existing channels, Approved proven tech and are signing up more countries, quite excited about the next update

In terms of 2. I am not even going to answer that, please refer to the rockerfella report from the USA if you believe it is a short term bubble https://www.rockefellerfoundation.org/national-covid-19-testing-action-plan/

3. Again, you dont scale up this fast if you can't deliver, look at other companies, they're all scaling up massively as quick as they can - IMO NCYT will be over 12-14m PCM by the end of the summer
4/5 dont really care, just presents an opportunity, if it is not a fundamental reason it doesn't bother me

Also in regards to no.1 - I believe I have an answer for that (still doesn't stop the market from selling, but certainly helps my investment case)

The UK contract didn't start until May 4th and was for around £50m I believe?
So that left around £40m in contracted/booked revenue
£9m in cash would be around £18m in booked revenue
So another £22m to find, again if half of this is to be delivered in May/June etc. (and I suspect for larger orders clients likely pay a bit up front and then the rest on delivery, especially in uncertain times like today with supply chain issues) so taking all that into account, I wasn't too fussed with the £9m in cash quote, it really needed more information and IMO wasn't really worth looking too much into, the 50%+ figure of EBITDA was more much important (I also think this will increase as well over the summer)

Rats, I wrote that entire post out without a typo until the very end
£1.60-2.00

£160 would be lovely :-)

My assumption is the market is never right, a share is either overbought or oversold, when you stop looking for reasons why the market is right and look for reasons why it is wrong, you find better answers

So ask yourself is this share overbought at £3.50? For an unbaised review, I will post some negatives below
1. Uncertainty over cash generation, why did we only have £9m in cash at the end of April?
2. Capacity, some people seem to think they wont be able to fill 10m capacity per month
3. Bubble - some people believe this is a bubble and the revenue stream will dry up in a couple of months
4. Profit, most people are in profit, so they won't mind selling out at £3.50
5. Large seller? Unsure if ABN are selling

However, if like me you think this is wildly undervalued, then your reasons have to outweight those of the above, my reasons for why i think it is undervalued

1. Scaling up demand massively, from 2m in Feb to 10m in June, IMO this will only increase
2. Other antigen tests are between $15-30, therefore NCYT price per test is pretty low and has 100% accuracy, which is more important than speed (although both is obviously desired)
3. the market is astronomical and NCYT have first mover advantage, again I can only see demand increasing over the next 6 months
4. Competition doesn't matter, as per above, the market is so large and again NCYT have first mover advantage
5. NCYT booked sales was increasing by a incredible rate, from £17m in contracted revenue to £90m by end of April, at this rate (if it continued) they would book £210m revenue by the end of May
6. Operating at a 50%+ EBIDTA, which suggests at £9 per test, that they would book over £100m in CASH generation over the next 3 months, for a company with a MCAP of £200m, that is absolutely unheard of, so the market simply believes it will not achieve anything near this
7. By the end of the year at the current RATE (with no increase in margins, new products like the mobile test, and a scale up in capacity) NCYT would be on track to convert more cash than it's current market cap, in fact quite a bit more cash - one could make an argument that by December 2020, NCYT share price covered by cash could be circa £5 alone - again, a ridiculous valuation for a company that would still be selling products that are in demand

My price target over the summer is between £7-8, if it gets there I will take some off the table, although I will certainly be reviewing on each order update RNS, as of right now I have no real issues with the performance of the company and believe the next update will catch a lot of people out in terms of how undervalued this is, a bit like when it was £160-£2.00

Wonderful research

Yesterday we had the 40,000, or was it 3.8m test order? :-) and now we have the Mexico Approval
The next update is looking very exciting!
I personally don't mind if they don't RNS, the more find's like the above, the more confidence I have adding down here, once the next next update does come out the 300's could be gone for good

Not advice! DYOR

The testing is going to be done in the UK by Avacta
The CEO did say this at the AGM and I believe in one of the recent interviews
Cytiva are just designing the LFD device/prototype, I am unsure if they are also doing the validation but the CEO did say it was going to be done back here in the UK
This is also why I increased my belief that AVCT will retain a larger percentage of the revenue split than previously believed

ABN AMRO

1. If they are selling, this will present a fantastic 'top up' or entry spot for new investors which totally disregards the fundamentals of NYCT, investors always look at this as a bad thing but as long as there is no fundamental reason for the selling, it will be short term and the SP should re-rate on the next order RNS which I anticipate early June, obviously holders dont want a seller, but NCYT is revenue generative which means it is a lot easier to value and therefore re-rate

The PHE order

Department of Health and Social Care contract to support the NHS

On 27 April 2020, Novacyt signed a supply contract with the UK Department of Health and Social
Care (DHSC) for its COVID-19 test. Under the terms of the agreement, Novacyt will supply its
COVID-19 test to the DHSC for an initial term of six months, starting from 4 May 2020. Novacyt
has initially committed to supply 288,000 per week to the NHS, with the option to expand the
agreement. This partnership with the DHSC reinforces Novacyt's existing support of the UK
government's five pillar plan to increase testing for COVID-19.

Please note this very KEY line " Novacyt has initially committed to supply 288,000 per week to the NHS, with the option to expand the agreement"

Also CASH GENERATION - the PHE contract didn't start in APRIL it starts on the 4th MAY for an initial period of 6 months
WITH OPTION TO EXPAND - they have just gone from 8m to 10m test kits per month, so capacity is there for more testing

Another post I have seen is they are not meeting demand, again for anyone who has read the full report, it has this to say:-

Significant demand and capacity expansion

As a result of Novacyt’s ability to rapidly develop a test for COVID-19, independent endorsements
of the high-quality performance of the test, and the pressures on all stakeholders to increase
testing capabilities following the WHO’s announcement of a pandemic, the Company is
experiencing unprecedented global demand for its test. We have therefore increased our
manufacturing capacity to meet current and expected demand, and continue to evaluate
additional capacity options.

Primerdesign expects to Achieve the target run-rate of manufacturing its COVID-19 test at a rate of ten million tests per
month from June 2020.

Again key line:-
- "the Company is experiencing unprecedented global demand for its test. We have therefore increased our
manufacturing capacity to meet current and expected demand"

Not increased demand, not even significant demand, but UNPRECEDENTED GLOBAL DEMAND

Why a combination of strong expected sales and cash generation in May (and over the summer) combined with a short term sell off from ABN (if indeed true) is arguably a recipe for a fantastic opportunity

All in my own opinion of course and not to be taken as a buy recommendation or investment advice