We would love to hear your thoughts about our site and services, please take our survey here.
They’ve stated before:
1) Capacity to see them to £65-£70mn
2) If they need capacity then, there are hotel options available to them.
3) They can stand a new site up in c.3 months
Based on the Whitechapel site, it was £1-1.5m from memory, so won’t break the bank and gives them access to another c £20mn annual revenue, assuming 16-20 beds…
Not sure the expectation of an RNS this week is wise… could be but certainly not a given…
In the last Stockbox interview, 16th Feb…
46 mins: “…we are completing the optimisation work on that, not yet complete, we hope that it will be done shortly…”
“We hope to be able to ship our prototype platforms in the near future, but waiting for the final optimisation tests to be completed…”
“…LDT test (Lab developed test) waiting for US partner to complete that process”
He does also reference near term catalysts from 58 mins in, talking about getting “product in market through successful clinical trials”, more global partners etc…
Agree it’s not far off, but this week might be a little optimistic…
Hi DD, at the moment, I’m not seeing a raise being needed for a few reasons…
1) Current working capital and low overheads - I think the exec are something like £120k a year from memory,
2) The royalty model - currently 10% in China, 15% with Corepath in US, and seeking additional partners - is such that the productising will be done through their network of partners rather than Cizzle having to produce the products. They have mentioned additional partnerships to come this FY.
3) They will ship mAbs and reagents, which the partners will pay for in addition to royalty, difficult to know what that looks like in terms of the commercial arrangement, so difficult to determine whether cash impacting,
4) They have a 5% interest in Conduit Pharmaceuticals in the US who are due to list on the Nasdaq this FY. That is currently worth £3.25m to Cizzle once Conduit are listed so would create additional working capital should they need it in FY24.
I suspect in practice (just my opinion), once they can show 95%+ for identifying stage 1 lung cancer (and working on other bio markers), this gets bought by one of the big guys, I doubt they’ll be commercialising it themselves…just imho…
Posting this for newcomers re potential opportunity…
There are details in a prospectus last year plus various RNS updates and presentation videos kicking around so door, but below I took the current market opportunity as outlined by the company and pared it back significantly to be cautious…
- Highlighted cost of test = $100, so if you take just a proportion of that, say $20.
- 30 mn tests a year from China at 10% royalty = $60mn, let’s assume we add in other markets at a modest rate, US agreed, additional commercial partnerships due this year , so add in royalty in US of 15%, gets you to a modest $80mn p/a.
- That won’t happen overnight, so if we only saw 25% of this in the near term…that’s $20mn p/a.
- As a royalty, that’s straight through to the bottom line…if we assume a modest biotech EV multiplier of 10… that’s $200mn valuation…or c 60p share price. (as mentioned, my assumptions above are way below those cited by the company / market, but trying to be pragmatic).
- Given the demand, assuming they get taken out, anything from 50-100% uplift on SP (way higher if taken out earlier) - Amryt just went for 107% uplift.
(excluding use of IP to develop other bio marker tests e.g. breast cancer)
Personally see this going way way above 10p…it’s just how long it takes…key part is the completion of the assay optimisation and ability to ship platform to lab partners. Any assay % success of > 90% (lab tested 95%+) is huge…(not just commercially but also for society)…that’s before considering CIZ-1 for other cancers…
While things have settled down, just adding some general info.
We know mouse mAbs have been successfully produced by Fair Journey, but has been mentioned about producing Ranbit mAbs. Tend to be better at producing antibodies for smaller peptides so elicit a better response than you’d see with mice, so improves efficacy.
Link just gives some context for those interested. In the near term, should get confirmation rabbit mAbs have been produced and these will be used for the ELISA test.
https://stjohnslabs.com/blog/the-benefits-of-choosing-rabbit-monoclonal-antibodies-over-regular-monoclonal-or-polyclonal-antibodies
On the conspiracy theory re pharma, there are loads of examples of pharma buying up diagnostic companies, just one example below:
https://investor.illumina.com/news/press-release-details/2020/Illumina-to-Acquire-GRAIL-to-Launch-New-Era-of-Cancer-Detection/default.aspx
The scope in terms of EV is vast, however….I would assume this will get acquired way before then…
Just a *** packet calc…
- Highlighted cost of test = $100, if you take just a proportion of that, say $20 .(price points invariably come down rather than up)
- 30 mn tests a year from China at 10% royalty = $60mn, let’s assume we add in other markets at a modest rate, and royalty in US of 15%, gets you to a modest $80mn p/a.
- That won’t happen overnight, so if we only saw 25% of this in the near term (3 years time)…that’s $20mn p/a.
- As a royalty, that’s straight through to the bottom line…if we assume a modest biotech EV multiplier of 10… that’s a $200mn valuation…or c 50p share price. (my assumptions above are way below those cited by the company / market, but trying to be realistic).
Which would be 20x above current level…
That’s without factoring in scope for CIZ-1 as a bio marker for other cancers e.g. breast
However, I don’t see this getting to market through Cizzle (and partners)…clear the next couple of hurdles and it’ll get acquired by one of the big guys - Eli, Merck, Pfizer, AZ etc… all increasingly looking at diagnostics.
Pure punt - 3-4x above IPO, so £100mn ish…??
Just creating debate :-)
It’s not lost on the Chris’s, the dilutive impact of placings, given their holdings.
In their shoes, I’d ideally get a couple of positive RNS’s out in the next month (there’s enough going on you would think) to get away from current prices, see the SP back into the teens, then get a less dilutive placing out the way next quarter (don’t think they’d need a lot) and then have a clear run upwards…blue sky on this one after that imv
I think it’s very positive in that you can see the new direction and scale of opportunity, pregnancy saliva test market is huge in its own right, and the Lloyds opportunity in Ireland (and soon UK) is large. Don’t know if scope for Boots / Supermarkets, have asked the question.
Not sure how market will react as no forward figures yet (understandably) and I think it’s clear they’ll need a placing this FY as the cash won’t last into FY24 when they expect breakeven - guess is that we’ll see a little bounce and then settle down again. Potential for multiples from current SP, just need to get past that cash question first imv …
I think you’ve just highlighted why they wouldn’t get acquired yet imho :-)
I could see it happening in time but not until the SP is well north of current position. An acquisition would typically be 25-50% above SP, you get the odd one significantly higher like Amryt, but that was for a developing drug portfolio (107% above closing SP).
This just takes 3-4 decent contract wins and it’s back to 40-50p in short order. The sector is starting to look more positive…prove profitability and investment will come back…Hvivo’s just done 100% increase in 6 weeks…and that’s from a starting c £70mn MC.
Abdx are starting from £7mn and with a small free float.
They just need to show they can win decent sized contracts (they can’t really guide on contract margins until a trading update as would only make sense to do that with aggregated financial data)…
I did wonder if this is Martin Lang… given the investment level, felt like it had to be someone who understood the science and working in the field with BioNTech…could be wrong…
https://www.linkedin.com/in/martin-lang-292728b2?originalSubdomain=de
Remove the gap before Vox - nothing of great interest just flagging coverage…
https://www. **********.co.uk/articles/trader-s-cafe-with-zak-mir-the-week-in-small-caps-february-12-3a5d55f
The buying has seemed different this week from previous, no pull backs till today and that was short lived…see what Monday brings…when folk are buying £500k’s worth at 19.5 and 19.75, seems a stronger motivation than just referencing a Liberum forecast of 25p target (Finncap were at 35p (originally 44p)) but each II will have their own take on it.
Personally see this hitting 30p by the end of the quarter…just imv
This is a Berkshire Hathaway report released yesterday - was posted on another share chat by a well researched poster - it’s targeted at finance markets so sits behind paywall to read beyond contents pages - but highlights opportunity in the diagnostic markets etc…Angle plc cited as one of the main opportunities…
https://markets.financialcontent.com/stocks/article/bizwire-2023-2-8-global-companion-diagnostic-markets-report-2023-the-future-of-diagnostics-by-application-technology-and-funding-with-customized-forecastinganalysis-and-executive-and-consultant-guides-researchandmarketscom
I’ve always shared the view it will be a larger CRO which acquires Hvivo eventually, the likes of Icon at £5bn MC.
However a bit of digging by someone else invested here suggested links to a US pharma player that makes GSK a minnow in comparison.
Just to run that scenario if a large pharma did buy Hvivo…
1) They might have 20-30 programmes that have ph2 requirements, and maybe 4-5 of these a year would fall under the CHIM agent portfolio Hvivo has, remainder based on other clinical needs - saves you money and time to market…(proven)
2) Critically, prevents your peers e.g. Pfizer, Sanofi etc…using the route which slows their development path giving competitive advantage,
3) Exclusivity to CV19 Chim agent…
If it isn’t one, wouldn’t rule out a collaboration of 2-3 pharma companies doing it as a joint play…
Likely to be an FDA regulator issue but assume that could be overcome with certain barriers between parent company and Hvivo.
Unlikely granted, but not implausible…