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Dear oh dear…70 staff…what are they all doing…
No pipeline of note, targeting low margin manufacture, cash burn, likely raise needed in the not too distant.
Most likely scenario would be for someone with bigger pockets to pick up the business given investment on the operational side imv…only positive I can see at the moment…
Just reading this part…
“In vivo, nasal Foralumab did not modulate CD3 from the T cell surface at any dose.”
Would value the views of others, scientific papers never easy to read, but my inference was that while in vivo, it showed a good safety profile (a first), they only managed to elicit a positive immunological response in vitro, not in vivo?
Just a bit of comparison analysis on Hvivo vs Ergomed….
On revenue, while Hvivo doing 20%+ growth this FY, but a more modest 10% next year (probably understated) Hvivo initially seemed weak when compared to the 37% of Ergomed…
Digging into that though…3 acquisitions from Ergomed in the last 2 years…first 1 below impacting last years accounts…
1. Medsource acquired for $25mn in December ‘20. $19m turnover and $1.3m EBITDA.
2. Ashfield Pharmacovigilance acquired Jan 20 $11m turnover, $1m EBITDA. Acquired for $10mn cash… interesting ratio in buy price to turnover and EBITDA, especially as US based.
3. Adamas (UK based) acquired for £25m in Feb 22. £8.5m turnover, £1.8m EBITDA.
For Ergomed’s FY21 results, the Medsource figures should be newly added so their 37% growth drops to c 18% y-o-y…far more comparable with Hvivo at an organic level.
One point of note here…has been talk of the EBIT % for Orph at 12-14% currently…the EBITDA of two of those Ergomed acquisitions are 7% and 9% so Orph not exactly low…aspirations of 25%+ aren’t realistic imv.(recognising developing businesses will take a while to get past the capital intensity requirements of early growth phase)
Adamas, I’ve excluded, as they are in consulting so not comparable to CRO service).
Hoping Hvivo will do something productive with some of that cash pile in the way Ergomed have…!
In terms of other metrics between Hvivo and Ergomed…EBITDA = 14% vs 20% respectively.
Differing revenue levels will primary drive the difference here - Scale would lead to greater efficiency so should start to align as Hvivo revenues grow - SLT costs constant, flu camp improves timing of studies and reduces demand for agency staff, chim agent dev costs recovered across multiple studies aswell as improvements in business model e.g. malaria chim has reduced inpatient requirement, reuse of screened patients for other third party studies etc…)
One other interesting efficiency factor…Ergomed Rev/employee is c £100k…Hvivo is closer to £200k/employee… I assume due to the price premium in challenge studies relative to wider CRO activities…
Last one of note…level of cash held:
Hvivo £20mn (ish) = 40% of turnover
Ergomed £31mn = 26% of turnover
All the above suggests there should be a closer alignment between the two than the disparity of the respective market caps currently : Hvivo = £80mn, Ergomed = £660mn…
P/E suggests significant upside for Orph…
Ergomed = 50
Hvivo (based on FY22 expected) = 18
Hvivo (based on FY23 forecast and current SP) = 12
(did this a couple of days ago before sp started to move)
Results will be woeful…think that’s a given…not sure how they’ll treat the gov payment as resolved post accounting period.
Have no expectations on the existing cookie crumbs mentioned in previous RNS’s… but they’ve got decent working capital to start to drive some momentum, forward looking statement is everything…some positive noises and sp moves quickly, without that, yep…could see <5p, albeit briefly I suspect.
They’ve just added an additional 20 beds, and based on what they did at Whitechapel can stand up a new site for sub £2mn (inc yr 1 rent), so have the funds to expand if required.
Last RNS contract timing will more likely be down to client timescales than Hvivo capacity. If they could land 6 like that a year (had 10 contract wins last year), add in £8mn for Venn and you’re around £85-£90mn…EBITDA would be up to c. £10-£11mn and value would then be c 2.5-3x current SP value…not a giant leap by any means (and if anything eventually happens with DiM, Imutex, Prep…there’s a bonus to the core business value).
I think the blarney piece isn’t that relevant…most healthcare stocks have taken a worse trajectory than Orph…Trellus 70p to 11p….Renalytix 1100p to 50p…etc… Orph for 48p to 13p (adding in the 3p for Polb), not a horror show in comparison…
I think the delays on Prep and DiM haven’t helped…expectation of get rich quick rather than the slower burn of a stable CRO not as appealing to some…
As of FY21 it was only breakeven as a business, so still needed to prove it could deliver strong financial metrics…if this FY is £50mn (seems nailed on), £6mn EBITDA and £3mn EBIT then there is a base to work off. £55mn next year seems too modest to me…and that should bring about c £6mn EBIT…question for me is the growth aspiration needs to be greater. Ergomed did 35%+ last FY on 20% EBIT, which is probably why it has a 40+ PE ratio rather than the c15 of Hvivo.
While capacity isn’t an issue at the moment…make it an issue…bring in additional business development heads, look at inorganic targets…having the cash levels they hold, good place to be in terms of acquisition potential…
Financials are starting to look good, deliver on FY22 and it’s looking cheap…but think they need a more aggressive growth ambition…
Folk said that after Christmas when there was a 3 month gap in contract signings…signed 7 contracts worth £65mn since…
10 contracts worth > £85mn in last 12 months (exc Venn)…3 years ago they were doing 2 contracts a year…think it’s moving in the right direction…
I think the Vatic situation has been on the cards a while…
Results will be poor (think that’s well factored in), future trading update will be the interesting piece…lot of investment in operations but what is in pipeline as the business recovers from the vivid debacle and what does burn rate look like post efficiencies this FY…
Given both CY and CH have been involved in ABDX a long while, they’ve continued to purchase shares…if we just take Chris Yates…Finance background…economist by training…best part of 400k shares purchased in September…he clearly has confidence in the business direction…just need to see that morph into results now…
My recollection on Accustem…
It’s not a medical device, it’s effectively a piece of IP based around an assay which is more effective in determining the most
effective clinical path for certain types of breast cancer patients.
It’s been piloted in Turin, but needs to be commercialised hence the funding requirement (not for medical equipment, clinical drug development).
It was something along the lines of testing 20 genetic markers - benefit is that drugs can be used in a more targeted way (better for patient) and more cost effective for the healthcare provider.
They also had a further development (StemPrinter the original) called Spare which was in development and meant to be more effective.
Main question for me at the time was proof point in effectiveness / peer reviews, can’t understand why it’s taken so long if no clinical development path.
Also recall personal interest for GC having lost a partner to breast cancer.
I think there’s a difference with BBI, they were turning over £50mn and EBITDA around 15-20mn, ABDX have a long way to go…
Have they got the people and capabilities, definitely, can they get to the figures in your post, yes, eventually, but a long way to go.
Looking at some of the names arriving on this board, some folks are going to get stung by the rhetoric if they haven’t done their research. The company has struggled for cash, had to lay folk off, and got battered by the covid “opportunities”. I suspect SP will drop later this afternoon, and fall next week after the spike, so be wary - however, do your research and if happy for a steadier climb, abdx is one that should fair well in the coming months imv as they start to convert potential into results imv.
This was the more relevant news for me, board members investing a not insignificant amount…shows confidence in direction of travel. Todays news, while welcome, adds to the cash flow, but buys more time for the turnaround post covid carnage…
https :// youtu.be/7H7aq-UpTA4
Remove spaces - insightful video on new facility with move to Plumbers row.
He’s covered that one off before…he mentioned recently sp would fall off a cliff if he sold any shares so not lost on him, and has no intention of doing so (has also mentioned about extending his lock in (I guess self imposed)).
He only has 2 options :
1) He sees significant long term opportunity for growth so plans to stick around longer than initially intended to grow the business, or
2) Can’t see enough levers to significantly increase the SP so sells out in the near term for whatever is considered a good offer.
Spot on Si…
I am hoping CF is cute enough to manage any short term drop, through good news flow and investor activity.
As discussed before, cash would equate to 4p a share, so not expecting a silly fall, and if there was, think it would be mopped up pretty quickly.
If Schroders were willing to take 4.5% previously, you would have thought there would be wider interest among ii’s to take on holdings at lower levels, he must have had discussions surely?
Hi,
Does anyone know MC value for ACUT? From memory there were 170mn TILS shares, and at a 20:1 consolidation, I’m assuming 8.5m ACUT shares.
At $1.50, that would be a c £9mn MC. Does that seem right to others?
Not sure if anything can be taken from current share price given it’s not actively trading.
Clearly a large fund raise needed but don’t see that as dilutive given expected PR cranking up over coming weeks…
Long way to go to get to Genomic Health acquisition value by Exact mind… :-)
Celadon pharmaceuticals lists tomorrow (formerly Summerway capital) hopefully removes sticking points in the sector??
They aren’t selling the data to them, in the same way Pfizer, Sanofi or any other pharma co hasn’t either.
With a growing array of data, you can’t mine it for insight in a simple way, so need computational models to find out what patterns exist. It’s just outsourcing to a party who has the intelligence to do that work as far as I can tell.
The current SP has very little to do with Orph’s performance in my opinion, financials have stayed pretty consistent with guidance and on a decent trajectory going forward.
If you ignore Covid stocks which have bombed(ODX, GDR etc…), health sector has fallen across the board.
RENX…often cited by CF, is down from 1100p to 300p.
Trellus…70p to 25p-ish
Oxford Nanopore…seen as the darling of the sector last year…700p to 370p
Could go one…but you get the idea…
Where I think he has been culpable is in overstating SP expectation and timescale of delivery, and therefore folks thinking it could outrun the sector downturn, which it clearly hasn’t.
Pipeline the key piece for me going forward…need greater volume of contracts landing, been too quiet Jan-Mar. If you have the capacity, need to see it filled…profit naturally follows if 12-15 challenge studies at £6-7mn can be won each year rather than the 7-8 currently.
Given LSE chat has turned into ADFVN…must be a lot of folks seeing value at this level…