Member Info for HarChris

Sorry I'm not sure you are following what I am saying. We were told, according to the second DHSC contract, that as part of phase 1 we would be receiving a minimum of £10m a week from the government: 'This first phase of the contract will involve the immediate deployment of 300 PCR instruments, related kits and support services with a minimum value of £150 million for the first 14 weeks'. It then says this: 'Based on this initial period, a further £100 million of revenue could be expected for the subsequent 10 weeks, however volumes can be varied up or down subject to certain notice criteria given by the DHSC.'

The second part of phase one which earns novacyt approximately £100m for 10 weeks does not include any instruments, which suggests that we are receiving £10m a week now for exsig® COVID-19 Direct kits and genesig® SARS-CoV-2 Winterplex kits (this is stated in the contract).

We must therefore be supplying a hell of a lot of exsig direct kits/winterplex to the government as part of this contract. Would these tests not come into the total PCR figure shown on the gov.uk ?

That was meant to say 300 instruments*

So do you or do you not agree with me that at £10m a week, we must be supplying a much larger number of tests to the government now? We are not receiving £150m for rolling out 300 tests and some support services over a 14 week period, that includes a large number of tests too...

Shaun, with the first contract we were supplying the government 288k tests a week up until late Oct/early Nov time. Am I wrong in assuming that the tests we supply hospitals will be part of that 500k daily number? I assume that the total count is a combination of all the tests paid for by the government, whether it be hospitals or the labs. So, alongside the rollout of the Qs in 300 hospitals and the support services, I assumed we would also be supplying hundreds of thousands of tests a week... well we must be, as where else is the £150m coming from?

My guess is that at £10m earnings a week (£150m for first 14 weeks) from phase one, we are supplying somewhere close to a million tests a week, or possibly a little under, making up about 30% of all government tests.

P.s we do have some info about the rollout. The independent article on the 2nd Dec stated that 160 machines had been rolled out to hospitals, later to be updated to 200 obviously following clarification (lazily it was not edited from the subheading).

B2H2SL, when you reread the contract rns against the current backdrop it's hard to imagine anything other than the maximum value being extracted. The deal was made late September, not long after Boris had claimed that covid would be more or less defeated by christmas. Now look where we are... the last day in which there are figures, 7th Jan, gov.uk shows the number of PCR tests conducted exceeded half a million!

The fourteen weeks of phase one is ending around now and it says the second past of phase one is for ten weeks at an estimated value of £100m but that could wary depending on demand. Well, demand must be even greater than anyone could have predicted...

Thanks EXMEX for the link. I noticed this supplementary text:
AIM companies are required to establish appropriate closed periods (which may be more than the prescribed 30 days prior to the release of financial information) during which directors and applicable employees are restricted from dealing in the company’s shares, and create and implement procedures that directors and applicable employees are required to comply with prior to conducting any transactions in the company’s shares, in order to obtain clearance to deal.

Seeing as all those PDMRs came in over a very short period could it be that novacyt themselves decided to implement a longer closed period, especially as in this situation those with access to the financials are at an even bigger advantage closer to results...

As far as I am aware, the closed period prior to full year results is 60 days so yeah that would be the case, with the company deeming mid November as the deadline for director purchases. Seeing as half year results this year were earlier than in 2019 I have a feeling that we might get the h2 trading update a week or two early also, hence anytime from late next week, but that's merely a hunch. As Shaun said most expect the trading update around the 28th, I'm plumping for Tuesday the 19th.

No it doesn't necessarily, it might just mean that these are the first british produced tests for use in asymptomatic testing and will likely be ordering even more from them in the future.

I first posted about the clock ticking way back in October and was derided for saying we were in a race against vaccines. You and one or two others are now the only ones left who don't accept that it has been a race all along.
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Add me to the list too Doc, I've never bought into this supposed dichotomy either.

Are some of us guilty of overthinking this investment at times? Is it not simply the case that if synairgen's international P3 trial is a success they will at the very least be taken out at a price considerably higher than the current share price whatever happens in regards to other promising treatments?

Yeah competition might snuff out the chance of seeing the share price get close to £50 but if we're honest at this stage most of us would be delighted to see it bought out for a fifth of that...

Written by our friend Samuel Lovett: https://www.independent.co.uk/news/health/covid-testing-rapid-test-uk-latest-b1784902.html

Good PR for PCR - i) 'However, government analysis from Liverpool’s mass testing programme revealed last month that the devices missed 30 per cent of cases with a high viral load and up to half of positive infections that were detected by PCR tests – widely regarded as the “gold standard” of diagnostics'

and ii) 'Prof Deeks warned that the self-tests were likely to return a higher percentage of false negatives within the community when administered by untrained members of the public, and accused the government of “continually overstating” the accuracy and safety of the devices.

“In the information they sent to schools before Christmas, they said this test was as good as a PCR test, which is frankly wrong,” he added.'

What Soder said is true, we are part of the governments new permanent diagnostics infrastructure and so future revenue is secure. Still, making hay whilst the sun shines (horribly, horribly crude as this is the darkest period in human history for many decades) props up this investment big time. The more money made during this time the bigger the market share novacyt currently has, the more it will make over the next year too and therefore a far bigger cashpile that can be invested in future R&D and strategic acquisitions.

Results in a few weeks is a big deal and I for one am very optimistic!

Most of us on here have probably listened to the vox market podcast conversations with Vadim Alexandre and Justin Waite over the past year. I found them interesting and learnt how seasoned investors think from the way Justin viewed this investment. I don't know if Justin is representative in general as he seems a bit of a dinosaur but I found it intriguing all the same. It went something like this.
'Novacyt, this company is an interesting one. They have a test to identify this virus from China, should be one to keep an eye on'
'So novacyt their share price is rallying after posting a trading update. A few million sales, that's good news for such a small company'
'Vadim, this is a bubble if ever I've seen one, 1000% up I won't be going near this'
'All these testing companies seem to be hot right now, none of it is justified, I'd avoid'
'Okay this contract with the government is an interesting turn of events, I'd be wary of those yet to monetise this opportunity though, it won't last long'
'Vadim, half year trading update, £60 odd million, very impressive. Still think this opportunity will be short-lived but perhaps worth a punt on novacyt. Mcap £250m a lot of cash building up'

Do you think £400m full year results might get the attention of the likes of Justin?!

At least they are buying British this time . It certainly explains AVCT recent drop in share price .
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You can be sure their board is full of the usual suspects explaining it away as good news and that their time will come!

In 2021? That sounds about right, over 350k every day currently. What with that and needing to confirm the LFT results with PCR I think the government are going to be needing to buy some more PCR test kits soon, don't you?!

Shaun, he's just updated it again, here it is for you: https://twitter.com/Larry64450205/status/1348021480064483328

We know that sales are booming, we know there will be considerable revenue in 2021 and we know that diagnostics is going to be a major focus in the years ahead. So why then is the share price so stubborn?

My theory is this - the market thinks revenue might fall off a cliff in the near future, the crisis might be brought completely under control and the money generated from covid in say late 2021, or early 2022 dwindles down towards zero. The market doesn't expect this per se (or we would be at half the sp we are now) but it considers it a distinct possibility.

Personally for so many reasons I don't see it as a possibility at all. Covid has dominated life for too long to fade away into nothing. We have contracts in place that will be renewed on a rolling basis, even if much smaller as the years pass... There are too many different revenue streams for novacyt for this to occur; rolling government contracts, NPT in clinical settings, international sales, testing for air travel, private sector testing, antibody testing post vaccine rollout, genomic surveillance of UK spread etc

So currently that is the massive downside risk that is being priced in. If you, like me, see this scenario as unrealistic then in the short term there is very little downside besides sales at the end of Jan coming in under expectations. If you also are confident in those then I think you should be feeling pretty good about this investment right now.

Richard has said a couple of times that they will have completed phase 2 & 3 within the space of a year which is a phenomenal achievement. Phase 2 commenced on the 31st March so is he saying that this trial will be completed by then or am I taking his words too literally?

Noguts, I don't mean to pick on you but do you know enough about Sars CoV 2 & influenza to make that claim? I at least know enough to say they are completely different so assuming something like you just have is pretty redundant. As it happens this coronavirus is mutating at a far slower rate than influenza does and so it's maybe a little easier to create an effective vaccine than it is for influenza which like you say is 70% effective at best and I think some years it's as low as 25%!

Whether a vaccine is 70% effective or 90% effective makes little difference to novacyt imo. Either way the coronavirus will still be circulating and we've seen how serious even countries with barely any cases are taking it. Just like the virus, testing needs will change as the situation changes and mutates and you can be sure at each turn novacyt will be at the front of the queue.

It's certainly true that the average age of those dying with covid is high but the average age of hospital admissions will be far lower than 82. Disease control is not only about preventing death you know?