Member Info for Greend100

Don’t really get the comments here today…
I’m not seeing any risk personally…risk was there at 40p…not at 20p…just a waiting game imv
Yes it’s frustrating (extremely), but the risk has reduced with the SP reduction.
I originally bought into the company at 15p before an 11p placing…it had no cash, limited revenue, under utilised assets, small contract values, no covid CHIM…etc….
Might hit 19p, probably won’t, but given well researched analysis, it’s a bit of a no brainer isn’t it?
Imho…

Good notes Sky,
A few thoughts…
- Agree with you that current SP doesn’t carry the spin offs - wasn’t the case 6 months ago imv. Average CRO multiples against revenue is x3.4, based on valuations since 2017. Based on expected £40mn t/o this year, that sees us to current market cap (excludes spin offs, growth trajectory and any moat for capability/IP). However, sentiment obviously plays a huge part and significant news flow needed to turn the momentum to the upside…
2) While DiM is expected to be next quarter, they are talking up Prep and Imutex as possibly Q4, and R Huston changing role, known discussions in the US and increased talk of sale suggests there is new momentum there.
3) I’m expecting / hoping for 4+ contracts in the next couple of months…key part for me is (i) Valuations - need to back up contract uplift values, would back up direction and speed of growing profitability, and (ii) Anything in QMB as a private sector Covid Alpha study (Codagenix?) would be great news, and a momentum shift…

Anything else (Malaria, TB, increased capacity, SGS commercial agreement, etc… would be a nice upside.

Imperial College conference tonight / tomorrow - Dr Chiu presenting tomorrow so will be interesting to see what he says re Covid…

Other think Aquae of course is Imutex and Prep - the latter doesn’t seem far off and with assumed move to US SPAC, no idea on costs - but must be sucking up some cash.

I was unsure on that one too Aquae…there are a few thoughts that came to mind after Monday’s presentation…but only personal opinion…
1) CHIM development- Malaria, TB, Pneumococcas
2) Covid lag - spending but not seeing significant revenue yet
3) Additional site / site conversion - mentioned additional 9 beds in Whitechapel clinic, and assuming this will be done this FY.
4) Leo mentioned about further pharma accreditation’s etc… I assume that costs…got the impression they are wanting to build greater credibility, whether that is with one eye on the US market?
5) Main one for me is DiM - personal view, to take raw data and commercialise it - bring in data scientists (or outsource) to make it usable, create database environment, portal / user interface, licensing structure etc…, I think is costly… now it might be that it is all done post split, but my view is that this is going on in the background now…to RNS about the capability a few months back is a bit odd if you aren’t now developing it, it must be taking significant investment to bring to life…
As I say, just my musings…

Hi Aquae,
My basic understanding…not sure if it helps…
1) A site costs £1.5m to convert, I know CF has mentioned it’s paid by others, let’s assume it isn’t.
2) I thought I’d seen a rent figure of £30k a month - someone correct me, if you disagree.
So c £2mn for the two above, worst case.
3) Staffing wise, they have approx 200 staff at the moment, if we assume 50 staff per incremental site at fully loaded salary of £60k, £3mn there.
4) Running costs - difficult to establish - but if we use FY20 accounts…Inventories, PPE, Volunteer costs, agency costs etc… c £2mn increment.
That gets us to £7mn.

If they can run 4 studies a site per annum at conservative £6mn (I know we’ve seen higher), that gets us to £24mn. Even if costs above are out by 50% it should be comfortably profitable.

As per my note this am, this business imv is dependent on increased contract values (would have been tighter at £4mn a contract), and more so being well utilised - partial utilisation at Hvivo of old @ 40% is what crippled it. Pipeline doesn’t appear to be an issue so good utilisation, decent contract values and then achieving scale from costs like screening centres, CHIM development, IT etc… “should” only see it moving in one direction, imho…

Deepjoy drops in for a chat at the low 20s trying to eek out an extra penny off the share price - did the same last time it was 21/22. I’d take it as a positive sign…if there wasn’t value to be had he wouldn’t be here…

Hi Strictly, this is the characterisation study, started March (I think), recently completed - aim was to get an understanding of optimal dose to initiate infection, so was done with small cohorts, differing dose repeated over time. Think this has now been approved, but not seen mhra confirmation yet. However, that was for the Alpha variant. This is now due to be repeated for the delta variant. Hvivo currently producing the agent (May RNS), should be available Oct/Nov. They’ll the start a characterisation study on that, assuming January, and that relates to the £5mn Covid spend next year more or less confirmed above the £50mn non-Covid.
Then it comes to the Challenge studies which follow the characterisation work - my assumption is that the government will want to do that off Delta, given it’s the dominant strain, so that might not start until Delta characterisation signed off in Q1 - should be a lot quicker as most of the issues re contentious to run them all done and dusted with Alpha.
Interesting but is whether in private sector, studies can start earlier - CF mentioned they can use QMB for Covid studies, and would expect interest from pharma especially around anti virals to want to test against alpha, which could start earlier.

Also led to believe Prep and Imutex progressing quickly…the latter I think will land left field in Q4.

Key part is the forward view though imv…revenues in H1 are based on contracts won last year…we know they take c 6 months to start and 2 months to run…while some revenue could be recognised during recruitment, you would expect most to be during the challenge study, so back end loaded.
Given contracts are of increasing value - recent ones 100% higher, but today’s c 50% higher.
Let’s take a conservative ave 60% higher…so your £20mn becomes £32mn, your profit jumps from £2mn to £14mn, taking EBITDA % from 10% to >40%…just for doing the same thing…

Whether the numbers are lower end of expectations or not, key piece for me is evidence of ongoing uplift in contract values - lot of talk about Covid challenge studies, but that’ll come in due course, best to take a conservative view on timings with that…but the contract piece gets little coverage…but it’s got huge implications. Last year these were tracking at £4mn a study, the RSV study with SAB in March this year jumped to £7.5mn, the Asthma announcement last month showed £8.1mn, the one on Monday… if in the same ballpark, further supports the trend of being able to double the revenues from existing facilities…and also has the benefit of flowing straight through to profit.
Aside from Royal Free coming on line next FY and search for additional capacity to support the pipeline, just the existing facilities should see profits jump significantly next year as these new increased contracts wash their way through.

Similar view as others, if we see 40-something for full year outlook it’s compelling (to me), H1 equivalent to full FY20. Broker reports suggest £46/47m and that’s after the known Gov challenge study delays.
Two key drivers for me re Core business growth, given close to capacity, (and first one feels a bit closer than the second, hoping that might be confirmed next week) 1) Any news on SGS tie up, and 2) Gov sign off. First one, gives Orph access to incremental £30-£40mn p/a if 24 beds available, and similar, if not higher at Royal Free, assuming COVID contracts > £10mn. If pipeline isn’t an issue, which CF has suggested it isn’t in the media rounds after the Asthma RNS, 14 or so deals in the pipeline (non-COVID), any additional capacity should be mopped up quickly. That creates a really strong growth story for revenue beyond FY21 and gives investors confidence there is scope to continue growing.
Anything EBIT +ve for FY21 outlook would be great - I know brokers are calling it higher - but slightly hesitant here given investment in COVID CHIM, A.Wildfire et al, additional Flu Camp screening centres…Some infrastructure going in where revenue will lag e.g. Gov contracts, but guess we’ll know for sure in 3 days.
Beyond that, would really help if we hear news on Imutex or DiM.
A lot of news due, and given low trading volumes at the moment, need some momentum back and only see that coming off 3-4 RNSs in quick succession.
Ones we are aware of:

- SGS Capacity
- Challenge study sign off / Trial confirmation.
- Codagenix - feels that it will drop once Gov sign off complete.
- Things have been mooted re a Benelux link - unclear on details
- Imutex - next steps
- First Malaria CHIM study
- Anti-Viral task force - not sure how much Hvivo vs Oxford, but CF has mentioned anti-virals.
- DiM - think laying foundations Q4 but assume a couple of months to complete.
- PrepB - as above
- Number of country collaborations possible - US, EU, Vietnam etc…?
- China
- Pneumococcus CHIM agent

Just my views - appreciate others might see things differently…

They have mentioned c. 6 months lead time and then 2 months to complete, so 8 months-ish to recognise all the revenue. There will be milestones as to when each stage complete and also accounting rules (IFRS) that dictate when you can recognise the contract in your revenue.
Is the odd contract e.g. Ampligen which they have looked to complete quicker I.e. squeeze into this FY.

The trade receivables is in the context of the assets at the stated point in time i.e. 31st May. That should be outstanding invoices at the 31st May, so £11.7mn billed for, payments to be received. It's not linked to the Income Statement in terms of when revenue is recognised.
You could assume if a say 60 day payment term, £11mn is due in which gives a feel for run rate of the business.

My understanding was that Orph did the work on Covid naive patients initially, Oxford doing those previously infected.
Orph producing the CHIM agent for Oxford as per May RNS and I assume will sell the Delta variant in Q4. Going into next year I assume Oxford could produce their own although doesn't appear to be straightforward.
Next year you'd expect various Pharma agreements with Orph (Codagenix (Covi-Vac) seems nailed on but would assume other second gen trials, strong relationship with Pfizer, and loads to improve - efficacy, cold storage, side effects etc...)), and then further gov work - while I suspect a lot will go Oxfords way, there's so little known about Covid still (Viral loads, shedding, age, those with different vaccines, strain etc...) it will run and run. You've already got lambda variant becoming dominant in some countries, delta mutation in UK etc... personally I don't think finding work on Covid will be an issue, just IMHO.

Hi - ADR in US, 2:1 so need to divide by 2 then fx.

Hopefully catch you on other boards, really valued your contributions, and hopefully TILS do come good on Crohns etc...
Both from around the area (Aldborough, Knaresborough, just outside York now).
Sorry, distracting others... as you were Sangi :-)

All the best Roker! I still hold albeit at a reduced level - will just leave it to run now and forget about it. Relying on the scientists at TILS now.
Enjoy the season with Harrogate Town (and Sunderland) saw your comments a few weeks back! (Mrs Green used to run a florist shop at the turret building on the Stray years ago).

Aside from the contract info posted previously, just a quick assessment on revenue and bed utilisation...
- Folk have mentioned the lack of new contracts being signed and the disconnect with CF's assertion that the facilities are fully booked this year and significant utilisation already for next year.
- If we go back to 2019 RNS's / early 2020, HVIVO as it was then and Open Orphan only announced two significant contract wins, could assume maybe £4.5mn each (seemed a common figure). Venn we know did £8mn, so with a £22mn revenue line, looking at another £5mn of non-RNS stuff.
- Taking this FY, I can see 5 large contract announcements, plus characterisation work, Oxford CHIM agents etc..., plus Venn and got to a c. £46mn revenue figure (would like it to be £50mn but still double last FY).
When it comes to beds utilisation...if we run with rounded numbers...each study has c. 80 people, you need a minimum two weeks quarantine for each patient, and have 40 beds in total (give or take). Assuming you need a bit of space front and back end, you are looking at c. 6 weeks per study.
5 large studies + small ones, soon gets us towards the 80% utilisation figure.
Royal Free obviously critical as that gives new capacity for next year, and assuming Codagenix plus three Govt studies (offset by no characterisation work), "should" see upside of c. £20-£25mn. Could be higher if we take the £10mn+ assumption per CV19 study from CF. Also shows how with the number of challenge agents available, that you need extra capacity to extend the revenue line in FY23 (next year I would expect £70mn+ once Challenge study sign off hence September/October this year critical but then hit a space limitation going into the following FY) - or you charge more per study but a fine line to tread with customers there.
The pieces we don't know is how much demand there is for other challenge studies as the majority are RVS - but why develop new CHIM agents unless you can see demand - and how much pent up demand is there for additional studies should they be able to secure more beds.

He crops up everywhere...Helium1, Bradha etc.... same story...

Would rather he kept it in Open Orphan, get it to scale and then separate it off. Given all they have going on I would have thought that was easier? - only reason I can think they want to do it now is to get Open Orphan stripped back to just the Core business.
I know SGS are touted as potential purchasers but Icon, with the Irish connection and strong acquisitive behaviour must be credible aswell...