Member Info for Greend100

Just some general musings… happy to be corrected if others disagree / have anything else to throw into the mix…

The CLIA accreditation, was last assumed to be December approval…so hoping that’s confirmed early Jan. Seems daft to release it mid-Dec.

“Under the CLIA program, clinical laboratories are required to have the appropriate certificate before they can accept human samples for testing.”

There are three categories under CLIA, I’m assuming Ciz will be under CMS which is a required box ticker for Medicare/Medicaid.

If we assume a launch in April, they were still calling that date a couple of months back, they would have to be publishing clinical data by Feb, which should be a game changer.

On the Moffat piece….”Cizzle's new commercial monoclonal antibody will be used for the first time to analyse patient blood samples to determine biomarker accuracy in predicting whether or not a nodule is likely to be cancer.

The blood sample tests for CIZ1B will be conducted in Professor Dawn Coverley's laboratory at the University of York.”

I assume the this will be belt and braces - use the LDT process in York but backed up by the previous pre-LDT approach to prove accuracy. In terms of timescales you would expect this to be 6+ months…so can’t see any feedback any time soon.

Hoping there is news on a breast cancer test in Q1… clearly Ciz have been working on a test, Ciz Bio have attended breast cancer conferences so on their radar, question is whether Ciz Bio Inc have an alternative test in mind or the Cizzle UK one - would think there’s a lag for the UK version to get anywhere near commercialisation but may have been progressing well in the background.

Other markets - China is still on the radar apparently, taking that at face value, so would expect news on that in Q1.

“Cizzle Biotechnology already has a further licensing deal in China which is being progressed as the supply of the Company’s commercial antibodies increases. The programme will commence after the first laboratory in the US has achieved CLIA accreditation”

If accreditation is Jan, would expect an update on China in Q1.

Lastly…NHS…still gets talked about but assume if that comes off, it will just come in left field…

Anything else - new markets, LFT etc… thinking longer term but happy for them to surprise us…

Thanks both - trying to access the Shard report with no success - will try via Research Tree.

Is the £2mn revenue for full FY trout? The SG&A costs looks an improving picture if H1 loss of (£0.7m) is only increasing to (£0.9m) by EOY.

Cheers.

Just looking through the H1 financials for FAB, just wanted to get some opinions on financing. They are clearly moving in the right direction as a business but struggle to see how they avoid needing further finance before reaching BEP…

- Revenue in H1 of £1.2m

- Created a loss of £0.8m

- 27% GM seems more credible than previous and assume that will continue to climb to some degree but given it’s directly linked to revenue, economies of scale will primarily be below the GM line.

- SG&A while heavily reduced is still just shy of £1mn for 6 months and given restructuring is now done can only see minor improvement from this level.

- Cash of £0.4mn as of end Sept. I know they’ve highlighted £0.46k due from debtors as incremental but equally liabilities for trade and other payables are at £0.42k so pretty much balance each other out.

If they made for arguments sake an increased revenue of £1.5mn in H2 at 30% GM so £450k contributing to overhead. With SG&A of £1m and current cash of £400k at end of H1 can’t see how a fundraise is avoidable in G2.

I think they’re very investable just a question of timing. Happy for someone to provide a contrary view. I haven’t seen a view of revenue forecast for H2 so my £1.5m assumption might be light (haven’t gone through all presentations yet).

Thanks

I think that’s pretty much as expected today isn’t it? … there might be additional news from a DT interview but they tend to be a bit prescriptive…

The company (sector aswell tbh) doesn’t have the volume…when you compare it to O&G for example, the activity there is far far greater - too binary and volatile for me though - so happy to sit and wait… also think there is a lack of understanding among most investors in this sector, and coupled with a lack of comms / engagement from the Exec (similar to most life science/biotech) that won’t change the visibility / profile in the near term…

This moves on milestones imo…and today was telegraphed so not a major step change… would have been more impactful if folks hadn’t seen it coming.

I still think there are 3 drivers for SP step change…

1. Clinical data

2. Left field - China/NHS/LFT etc…

3. Investor buy in - this doesn’t come from retail, it’ll come from stake building and probably out of nowhere…ie. not off back of an RNS…

As long as they keep ticking off the milestones, it’ll get there… biggest hurdle will be getting the sales volumes so it doesn’t follow the OBD situation (think they’ve already mitigated that with CB Inc, licencing model etc…) but will worry about that one after April ‘25…

(imho)

It’s what we expected…so another step completed. Given it’s in line with expectations rather than providing new additional info, it may land a bit flat… assuming a Directors Talk interview lands later, might provide a bit more insight….

TT - think you are trying to find issues where they don’t exist - CLIA submission was due Sept, aiming for accreditation Nov ‘24 based on previous RNS…this one says accreditation before the end of the year… semantics…

Personal view…all looks positive, decent progression…

However, there will be some who can’t see a near term inflection point, might see H1 as usually being lower than H2 therefore interims won’t generate a reaction, so they move on and come back further down the line…

I don’t see it falling significantly from this position, put ABDX in same boat as something like Hvivo… gradually becoming an increasingly sound business, nothing alarmist expected (which is a big plus for Abingdon after the last couple of years)…but not sufficient adrenaline for some :-) (imho)

Thanks gtc…very helpful.

Evening folks…started to do some digging on FAB and had a few questions…hoping those who have been here a while can help…

1. Don’t doubt if they get this moving there’s significant value here. BBI holdings was sold for £400mn off a £60mn turnover a few years back. They had a 55%-ish GM, whereas it looks like FAB are in the 10-20% bracket. That feels very low when it’s only direct costs above the GM line, has anyone got any detail behind that? (recognise there’ll be economies of scale in direct costs as the revenue line grows).

2. With regards to cash runway…and working to cash lasting to H2 ‘26. If I assume £2mn rev at 20% GM, that gives £400k. Assuming staff costs / capital expenditure is £1mn per annum that gets us to -£600k for the year. If cash was £1.2m as of Mar’24 that seems broadly right, and hopefully revenues continue to climb so no future cash raises (not to cover operating expenses anyway). Happy to be corrected here…

3. In the FY24 accounts, there’s £951k of “other expenses”, anyone know what that was for?

4. Does anyone know current staff levels? I can see it reduced significantly from FY23 at 54 heads, and FY24 at 31 heads, but assume that has fallen further going into this FY. If staff costs were £1.5mn at the 31 heads, thinking they are now in the 15ish headcount area based on cash runway assumptions. Difficult to know where redundancy costs sat in the accounts? (Part of the other expenses?)

Any help / guidance appreciated. Thanks!

Can only envisage 3 scenarios…

1. We get an RNS stating a further delay. Wouldn’t see it as particularly negative given wider mood music re Cizzle Bio Inc. Mud slinging ensues for a few days.

2. We get confirmation of contract signature but limited context - gets traded for 24-48 hours then settles back into this range. Initial rapture followed by mud slinging for a few days.

3. We get bonus info (additional funding, strong investor insight, GTM plans etc…) that gives sufficient support to move out of this range permanently. Happy camp and await further insight and further re-rate off data readouts etc…

Take your pick :-)

Hopefully 3) but don’t think it’s that material as it’s pretty much a given re US - next chapter is the page turner imv… Nov-Apr period…🤞

Should hear on the binding agreement this month, not sure we’ll hear anything re CLIA. CLIA is just a submission, approval in Nov/Dec is the more material piece assuming it’s forthcoming. Did question if the clinical data was needed for the CLIA submission as thought it might help in understanding milestones and timescales, but advised by IR it wasn’t necessary.

Personal view… would appreciate view of others…

-End Sept /Early Oct - Agreement with Ciz Bio Inc - hopefully the chance for those wanting the spike to jump ship.

- Q4 - other clinics announced re evaluations, similar to Moffat. CLIA approval hopefully. Possible clinical data but worst case first half of Q1 assuming April launch.

Morning Brondby…the other thing I’d throw into the mix is what happens re CGT in the Oct budget…not sure that’s being given the necessary due diligence, but if you hit gains at 40-45% it changes attitude to risk!

The funding from Cizzle Bio seems nailed on given the narrative from AS, hoping there aren’t any surprises to the downside around amount / terms, but could surprise to the upside around personnel, amount of funding for strategic plans stateside etc…

Even though it’s been telegraphed, I think we might see a spike given traders chatter - they’ll create some momentum…even if short term. Think we’ll settle back to this range while we wait for the bigger news around clinical data - hoping that’s in the next 2-3 months rather than waiting for Moffat. At that point think we’ll be able to hold gains and achieve a new SP base, just imho…

This is another step in the right direction…all looks promising to me. Personally, I can’t really fault the progress, it’s the nature of the beast that things can’t be delivered quicker and easier to have a longer term perspective on SP progression rather than the day to day worry - I suspect it’ll suddenly rise out of the blue as it gains supporters in the background, whether this week or 3 months time…

The work with Moffat is likely to be 3-6 months by the time they’ve put the study in place, filtered patients, run tests over a number of weeks, returned samples to York to verify, collate results, present findings etc… but hopefully other validation studies kick off in the interim.

The CizzleBio Inc funding is nailed on, so unless there’s a surprise in that RNS (exceed funding expectation, investor profile etc…) don’t think we’ll see a lot of movement there, and any news re CLIA submission, additional hospitals in US etc… aren’t going to create a lot of investor noise.

For a sustained significant uplift, we need to see wider investors on board (not just the usual deckchair movements from small cap investors) and that comes off clinical data, which is hopefully in the next 3-4 months (assuming market launch is c April). We’ll get the odd spike in the interim, but hoping the likes of Bio-Techne / entrepreneurial investors start to take a commercial interest as the analytical data gets published to drive greater sustained demand and stickier hands from those looking at the bigger picture rather than near term spikes.

My assumption, and could be way off the mark, is that you run two tests (not multiple). I can’t understand why they would share that data if it wasn’t on the table as an option.

Blood draw isn’t an issue…more than enough to run two samples which are in microlitre territory, and given timescales of 90 mins (ish) to run, not a major impact on lab time, esp given 96 wells on machine.

Biggest issue I see is you may need two machines in the lab as assume you can’t quickly recalibrate, and at $25k ish each a significant outlay, but if making $50 ish per test (prior to costs), running at full throttle, payback isn’t really an issue…just need to know you can get scale which is the greater challenge imv.

Meant to say partners taking 30-40% rather than that being passed back to Cizzle Bio, but all conjecture at this point in time 🙂

Just adding some further discussion points below…

The stated cost of a CT scan seems v low, given the number of touch points in the process (beyond the time in using the CT machine / operative), and may be a driver for the $150 price point. I think the $150 sell price is a lot lower than expected, but conversely, in terms of price elasticity you would think it’s easier to get insurer approval and clinics to buy into it. Arguably would also create a higher barrier to entry to competing products (down the line), can’t imagine it would be easy to hit that price point.

If that is a reimbursable charge, my assumption is that the clinic must be taking a fair amount of that cost - they’ve got to deal with the admin, operations etc… so would be interested to see what passes back to Cizzle Bio, 30-40%? Not uncommon to see partners / resellers in other industries taking 20% and that’s just for sales channel / admin activity so would expect something higher.

That might lead to say $100 per test coming in as revenue, so by year 3, that’s looking at 300-350k tests per annum.

Margins look super high, only factoring in $4mn of costs, and given $3mn of that is royalties, seems optimistic / concerning. Would like to see that higher as that would suggest greater efforts in place to drive a revenue line. Having said that, if majority of effort sits with LDT approved clinics can see central costs being low, but still seems optimistic.

Having said the above, given royalties are ongoing to see a net profit of c £2mn would give a healthy valuation a few multiples higher than where they are now…and without any repeatable commercial agreements in other territories.

Lastly, on the sensitivity and specificity - would have been useful to have a narrative on slide 22 - can’t see them sharing 3 calibration profiles if there wasn’t a rationale to it, so could envisage being able to run tests twice to cover off the optimal sensitivity profile and then the specificity one. If that’s the case, does show on the Bio-Techne machine they have very compelling data! Does leave a question as to how you handle that with an LFT - two wells, one doing sensitivity, one specificity??

Anyway, just getting my ramblings in ahead of Joes Friday eve post…

Sensitivity more critical in picking up positives…the specificity would effectively filter some out who were due to have further assessment anyway…

However…I suspect…and could be wrong…you dual test… calibrate to high sensitivity for first run and then run a second test to calibrate to high specificity (set C in their data sets)…esp if using a high throughput platform, only takes 3 hours for each run…

Thanks for guiding to the info re funding round Neil…interesting document…certainly sparked the board into life!

Think there are a few useful pieces of info in there…

1. Price points - feels realistic if lower than some might have expected - would rather see price not being a barrier, both health related and volume related.

2. We have sensitivity/specificity etc… using the Bio-Techne platform which hasn’t been available previously, just lab results. I do t think there’s anything that’s too surprising, 95% v high for sensitivity, specificity at 61% okay, and better skewed that way than the other.

3. If the funding remaining to be sought is accurate, not as strong a picture as painted previously. I would have assumed other avenues being explored rather than just this one, but who knows. Having sufficient funds for go to market is significantly greater than the $2.5m sought, although an argument that they don’t need the extra $2mn day 1 for royalty payment, if business case numbers are achieved they have the liquidity from BAU activities to cover that and beyond $300k remainder of funding can be used for roll out. Higher support would have been a nice endorsement though!

4. Business case numbers seem broadly sensible. Spend my days battling portfolio managers with over-optimistic BC’s. 200k tests a year in Year3 based on $150 a test plausible but unclear if that is the payment to Cizzle Bio Inc net of market facing providers eg Corepath, which would suggest higher market unit price.

5. Use of proceeds seems consistent with previous comments re funding.

As with LBs comments, think this is a slower burn than expected. Confirmation of funding late Sept will be a nice tick, but clinical data is a big uplift, but not anticipating that for a while yet (apparently not needed for CLIA submission/approval).

Just reading this again…still seems ambiguous.

“BIO has been successful with its initial investment round and has requested a 60-day extension to the completion of the binding legal agreement with Cizzle, as envisaged under the MoU, to enable BIO to complete on additional strategic investment that has been proposed”

If you’ve hit your funding for the licencing agreement, I would assume you could proceed on that basis?

However, three scenarios in my head…

1. It’s a smoke screen while clinical data is finalised with the commercial mAbs etc… before signature, but feedback I had from IR was that Cizzle Bio were happy to proceed with the commercial agreement based on the data they have seen to date.

2. Cizzle Bio Inc are looking to change the commercial terms as they have the opportunity to put greater investment into their roll out and want to adjust the terms, but this isn’t suggested at all in the RNS. Could be that they want to amend the scope in return for expediting roll out?

3. Just as a left field view…if they have potential for heavier investment, could they be seeking a reciprocal arrangement where they take a stake in Ciz so they benefit from the wider global rollout / other cancer diagnostics? “Additional strategic investment” is intriguing language.

I don’t buy them not being able to secure the funding, it’s play money in the big scheme of things and they need far more for the rollout. May be that they have the funding for the licencing agreement but it’s caveated that no point in doing that without having the $10-20mn to actively push it out into the market and that is the piece that is now being worked on??

Hi Neil,

Couldn’t they do that regardless though, I would have seen that as a separate entity to the licencing model arrangement. With the licencing model in place, it’s then up to them as to how much funding they throw at it in their market?

If they think there’s a greater opportunity and can see a path to greater investment (LFT, other cancers / markets, willing to fund investment to a greater degree on the R&D side etc… I could see how that requires a greater level of time for negotiation of terms…🤷

Would be interested in the thoughts of others re the RNS today…not seeing any negative in it, but trying to understand the motivation…

If it’s additional funding, that could have been done after the MoU was signed as part of a PR push on Cizzle Bio (funding, mgmt team, investors, go to market activity etc…). So not sure why that would stall things?

Which then raises the question of whether there’s a broader strategic discussion that could be at play - as that would potentially lead to a change in terms (doesn’t need to be as binary as % equity, could be a raft of different things, but something that means the contract discussions will take longer).

Thoughts?