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…it also fits with a comment from Will Geist on the Bio-Techne Medtech investor call yesterday, where he was bullish that anyone using their high throughput platforms also leverage their antibodies, benefitting from commercial supply agreements / scale.
Just thinking about likely next steps, pulled together some thoughts below, appreciate opinions of others:
We know about the royalty agreement, so if for arguments sake, test in the US is $1,000, and front ended by Corepath, so they receive the funds from the insurer, 15% comes to Cizzle as a royalty.
However, after that, it becomes more debatable.
The Standard Operating Protocol will detail the process the lab needs to go through to run the test, that will include getting the device (Jess) from Bio-Techne. However, will also state you need this reagent, mAb etc… So say $100 of materials (just as an example) to run a test, this is hugely lucrative if the SOP says it has to be sourced from Bio-Techne.
Given the consumables need to be manufactured specifically, there isn’t a wider market choice on a lot of it. Previously, assumption was that Fair Biologics plus others would create the capacity.
However, given Bio-Techne make 80% of their turnover from consumables, bang in their sweet spot, and also opening protein labs in UK and China which will both be up and running by the end of the year…
For Cizzle, they have the weakness of not being able to drive volume, and the end partner labs e.g. Corepath don’t have the leverage, they’re small players aswell.
So to roll this out wider, you need logistical providers / marketing / sales support etc… which could come from Bio-Techne. Cizzle get it pushed out quicker maintaining competitive advantage doing what they set out to do at scale, and clearly in the interest of Bio-Techne to help drive growth to elevate the sale of consumables.
Could envisage an RNS, that details commercial agreement whereby Cizzle get kickback on sales / funds for future development of Breast cancer test / LFT, which Bio-Techne would ultimately benefit from, as every LFT stick needs the same mAbs / reagents.
Given activities like Cizzle Bio Inc hasn’t been RNSd, does feel like they are waiting to line up a broader story before RNSing it…
Thoughts??
Just a couple of bits of info from listening to Will Geist today, want much that was illuminating:
1) Was bullish that anyone using their high throughput platforms also leverage their antibodies, benefitting from commercial supply agreements / scale. Does raise the question re Fair Biologics and what role they still play going forward.
2) Separate to diagnostics, he talked about their Cell Gene therapy business and role in regenerative medicine, work on replacement of damaged genes… logical opportunity re CIZ1B albeit one for down the line possibly…
I think things just move slowly FF re China…
Trade trip over there suggests still live.
The Bio-Techne investor call last week (see below) suggests China central to their thinking (whether Cizzle part of that, who knows).
If it was me, I’d complete everything first (partners for production, distribution, ORT complete etc…) make sure everything is robust and resilient, and then look to expand to China. Personally think this is key to the Bio-Techne relationship aswell…
1. In the process of building a GMP (Good Manufacturing Practice) Protein facility in China. Recognise the ‘China in China’ principle of buying locally, so will be separately branded and different price point to appear as local company. Will be fastest growing region in their portfolio, currently 10% of revenues. Live by end of the year.
I’m not sure the lack of shares is relevant here…if you’re earning c£70k-£90k a year, having 13mn shares isn’t lost on you in terms of motivation…
Funding wise, baffled that they haven’t needed to drawdown (working assumption on my part is that they are already doing so or sold some CDT shares), but think the forward funding will be via a licencing/partner agreement.
…and would think it’s a given that significant shareholders would have greater visibility - at £0.7mn invested inevitable the Langs have greater awareness than us…
Just as an aside, Will Geist (protein division which covers Diagnostics) at Bio-Techne presenting at KeyBanc Life Sciences and Medtech Investor Forum today - “may” give some insight on their direction of travel re expanding diagnostics portfolio?
I would expect the next RNS to be full results of the clinical test accompanied by details of how they navigate the next steps. Potentially, I could see it coming with a commercial tie up with Bio-Techne.
In terms of what that could look like (and would value the opinion of others here):
- The setting up of Cizzle Bio Inc doesn’t suggest an outright purchase.
- At present, the agreement with Corepath allows for 15% rev share and the distributor (in this case Corepath), buys the consumables, you would have assumed from Cizzle (sourced from Fair Journey / others).
- The carrot for Bio-Techne is that when your business is 80% consumables, you’d want to pick that opportunity up.
- Additionally, given their footprint and skill set, if they provide support, you’d want a wider commercial agreement beyond US, beyond lung cancer and also beyond the LDT into the LFT market.
- From Cizzle’s side, they care about getting this out quickly and progressing the other cancers / LFT test.
At a basic level, you could see a partnership agreement where Cizzle receive payments (tiered as milestones met) which secures funding for progression of the LFT and other tests. Additionally, Cizzle receive a royalty on the consumables needed by distributors as sales start to occur down the line. Would also expect Bio-Techne to commit their resources (supply chain, Go to market, Sales etc…) to help facilitate partner development as mutually beneficial to both parties to find other LDT oncology lab partners, with LFT being jointly progressed.
This could be a precursor to an outright purchase and given Bio-Technes recent history, would think an acquisition is preferable as a lot cleaner, but could see a split with some level of ring fencing of assets e.g. Conduit, and research (beyond the CIZ1 tests e.g. cancer therapies) being outside of any more significant commercial tie up.
Just thoughts on a wet Sunday morning…
I think Ciz could have dropped various RNSs in recent weeks…agreements with partners re mAbs/reagents, start of clinical trials, setting up of US registered office…all would have spiked the SP to varying degrees but probably would have drifted down again…
Does suggest he’s waiting to drop a very material news piece (just hope they don’t have to drop a basic RNS in the meantime e.g. drawdown)…they are more than aware shareholders have been very patient…
Personally think we’ll see 3-4 things land either together or in short order…
We have had various recent soundbites (below) and just from checking LinkedIn etc… we know they are still working with Bill B (and appears more closely than previous), have Vicky Zhang (Dept of Trade) and Frazer Lang liking posts etc…
From Dec ‘23 - Feb ‘24
“We are very conscious that no news has been released since the interims, but there is a lot going on. It is just that matters have not yet progressed to a stage where announcements are appropriate”
“Yes, personally I think things are progressing very positively”
“Our announcement on working with Biotechne was important and we continue to build on those achievements”
Barclays 26th Annual Healthcare Conference today…Bio-Techne’s Kim Kelderman (CEO) and CFO talking on a webcast …all very high level, market / business direction, but a couple of things stood out for me…
1. In the process of building a GMP (Good Manufacturing Practice) Protein facility in China. Recognise the ‘China in China’ principle of buying locally, so will be separately branded and different price point to appear as local company. Will be fastest growing region in their portfolio, currently 10% of revenues. Live by end of the year.
2. Currently building out a GMP facility in the UK, also for small molecules / antibodies. Again, up and running by end of the year.
All very timely…
The other one is with regards to Exosome DX.
Looking at the Bio-Techne web content, they have a comment that they are
“the only company that can simultaneously isolate and analyze exoRNA plus cfDNA in a single step”
“Thousands of exosomes are produced from each cell - healthy or diseased – and enhancing the ability to detect biomarkers of interest , makes exosomes vastly superior to cfDNA or circulating tumor cells (CTCs). These characteristics make exosomes very useful for liquid biopsy-based diagnostics, biomarker discovery, as well as enable clinical trial and patient monitoring. In addition, our ability to selectively enrich exosomes from specific cell or tissue types and subsequently enhance specific targets is a feature unique to exosomes - impossible using cfDNA or CTCs”
I have tried (and failed) to fully understand this platform - I think it could be fundamental as to whether they partner with Cizzle vs acquire them. If there is compatibility, the scope for Bio-Techne to embed initially a lung cancer test but then subsequent tests onto their platform is huge (stating the obvious), but this bit is key to me…
I thought CIZ LDT analysed cf-DNA / mRNA. If Bio-Techne had the ability to enhance the test through use of Exosomes, in theory the accuracy of the test could be enhanced…??
Couple of science based notes…wanted to see if anyone had any thoughts…edge of my knowledge here:
One below, one to follow:
The discussions re cancer treatments rather than just diagnostics. Last year, Dawn Coverley released a paper in BMC Biology that references CIZ1B.
“Epigenetic instability caused by absence of CIZ1 drives transformation during quiescence cycles”.
“CIZ1 has been linked with a range of human cancers and in mice genetic deletion of CIZ1 manifests as hyperproliferative lymphoid lineages in females. This suggests that its role in maintenance of epigenetic stability is linked with disease”
“The reversibility of quiescence is essential for maintaining tissue homeostasis and well-studied in the contexts of tissue repair, immune response, and stem cell reactivation, while failure is implicated in tumorigenesis”
“Together, the data show that CIZ1’s protection of the epigenome guards against genome instability during quiescence cycles. This identifies loss of CIZ1 as a potentially devastating vulnerability in cells that undergo cycles of quiescence entry and exit”
My simple understanding….tumorigenesis is the development of cancers…if you can stop the deletion of CIZ1 you can stop the cancer developing / progressing…I assume this is what is being referenced in their patent applications.
May be worth listening to if you have chance…new CEO talking to investors next Weds…
https://investors.bio-techne.com/press-releases/detail/407/bio-techne-to-present-at-the-barclays-26th-annual-global
Only pattern I see TT is trader(s) buying in back end of the week (100k/300k etc…) and then selling out Tues or Weds am when an RNS fails to materialise. They’ll be back Thursday.
Not seeing any significant volume…500k is only £10k…against £9mn MCap…even a few of those add up to not very much. Just imho..,
I would think because nothing material has changed…any movement +/- 1% in those significant holdings requires a TR-1, there hasn’t been any.
Given trading volumes over the last year…anyone moving in or out would have impacted the SP…barely see £5k traded most days…it’s flatlined until material news lands.
The longer time goes on, the more significant I expect the news update to be…
- ‘ Hope to have it in the market in the very near term’ (nearly 4 months ago)
- Will only release material news (common narrative)
- Tim M…”We are very conscious that no news has been released since the interims, but there is a lot going on…further updates will be announced, coupled with investor engagement, as soon as possible” (c 3 weeks ago)
The more time passes, the greater the likelihood that news is material in my view…in the last 5 months you could have released soundbites if you so wished (info on Clinical trials, suppliers for components etc…).
They have shown an acknowledgment that there is a lack of news but still holding fire re updates suggests a greater level of sensitivity of information to me.
The longer the time gap the more likely a commercial tie-up as next update…??
April ‘23 : Bio-Techne Strategic partnership with Lunaphore
Jun ‘23: Acquisition of Lunaphore
Mar ‘23 : Bio-Techne announce investment in Wilson Wolf
April ‘23 : Complete investment in Wilson Wolf
Jun ‘22 : Bio-Techne acquire Namocell
Mar ‘21 : Bio-Techne to acquire Asuragen
Apr ‘21 : Bio-Techne complete acquisition of Asuragen
All acquisitions 21-23…announced this time of year…
Just supposition on my part… ;-)