Member Info for Hawker

Thanks SB, as I understand it the issuer of the convertible loan note has exercised their right at this time and they have the right to do so once more, I believe in a similar amount, leaving the bulk of the loan in place until 2027. Given the super attractive funding rate of 5.5%, I can't see why the company would do anything other than run this loan to maturity and repay it in cash at that time. At this point, the shares should be well into new highs and this loan will have become a rounding error. Well, that's my thinking anyway, let me know if you think differently.

Not sure where you got your numbers JATW, the statement reads as follows:

LONDON and SALT LAKE CITY – July 17, 2023 - Renalytix plc (NASDAQ: RNLX) (LSE: RENX), announces the repayment of $1.06 million of the Company’s convertible bond, further details of which were announced on 31 March 2022. The repayment is being made through the issue of 526,211 American Depositary Shares (“ADS”).

After settlement of the repayment, the principal remaining under the convertible bond will be reduced by $1.06 million to $16.96 million.

1,052,422 new ordinary shares of £0.0025 each in the capital of the Company (the "Ordinary Shares") will be issued to settle the conversion of 526,211 ADSs, with each ADS representing two Ordinary Shares.

So the company is repaying $1.06m of the principal convertible loan amount, by issuing 526k ADRs (current value $1.8m) of shares to the counterparty, this will also add them to the share register, which is no bad thing in my book.

The more buyers and holders of Renalytix the better!

Following the FDA news, recent data release and confirmation that the sales teams have been unleashed on PCPs etc, I think it's healthy to see a bit of consolidation around the 140-150p level, likely building a base for the next significant move up.

I understand the management team has been meeting analysts and fund managers in the UK this week and then back to the US for the same with BTIG and others. Given the block trade and the increased volumes, it looks like they're getting a warm reception and winning hearts and minds, which is encouraging and suggests we may well see new investors joining the shareholder list.

I personally think this is the beginning of what's likely to be a long upgrade cycle, yes it's been a long time coming and a rollercoaster ride, but now it looks like it’s here for the foreseeable future. GMI…

Go team Renalytix!

DYOR & GLA!

Looks like Singer did indeed clear the seller out on Friday, and with Armistice Capital short 1.4m shares and Millenium short 500k, one of those could well have been the buyer… if not, I suspect we soon see a complete seller’s strike and then the squeeze is on!

Ps, it also looks like there's a seller in the UK market, my hunch is that it's Marlborough as they've been the seller in EKF (now fully exited), and in Verici (almost finished selling). If so, they don't own that many RENX, last update was 885k shares, which if it is them, should be cleared easily this week; suggesting the shares could well rebound nicely next week.

Many of these funds have of course been suffering redemptions and it's often a case of selling what you can in the UK small/mid-cap market, not what you want, depressing, but there it is!

Thanks SB, I'm markedly more upbeat, following the FDA approval, and believe that with all the groundwork the team has been laying, with respect to insurance reimbursement and partnerships with health systems, that, we're likely to see materially positive news regarding expanded adoption sooner rather than later. Regarding the funding, the new investors and the expanded list of US names will likely ensure any funding needs will be met, as and when required. So I think this is now very much all about sales and roll-out, especially as all the necessary parties are aligned and agreed on the need for KidneyIntelX. Sales could well quickly snowball and I wouldn't be surprised to see the ADRs back at the previous highs sometime in 2024. The UK market, in particular, is overly obsessed with funding and dilution, whereas I fear this obsession could well simply mean they miss the boat entirely, it wouldn't be the first time would it !?

Let's also keep in view the new TCET (Transitional Coverage for Emerging Technologies) program, this could well provide another significant fillip for the company, well watch this space anyway...

Buy, tuck away and try not to look at the screens too much, lol..!

DYOR & GLA.

Morning all, Interesting to see Armistice Capital doubled their short position in the UK listed AIM shares right into the end of Q2, presumably speculating on further delays at the FDA… What’s more interesting is that they omitted to share this as a news item at the time, as they have done on all previous changes to their position, perhaps suggesting they thought they might be wrong and didn’t want it publicised?

Whatever, they’re showing a short position of 1.4mln UK AIM shares, equal to 700k ADRs.

It's not clear why they shorted the UK shares rather than the ADRs (which are way more liquid), perhaps they wanted to have an outsized negative impact on the UK share price to create fear/panic selling from retail and other PMs? Thoughts?

In the meantime, I look forward to Armistice paying much higher prices to exit their short position in due course!

Yes quite, the valuation is utterly ridiculous down here and I'm sure the larger players are already keenly eyeing up Verici, not that it's for sale anywhere near this level, and I'm sure the company wants to build significantly on their commercial roll-out long before even considering being acquired.

With Clarava joining the already-launched Tutivia later this year, we should see significant ramping in testing volumes throughout 2024, albeit from a low base. By which time, the company will likely be adding Protega, which will complete their "trifecta" suite of products for full front-to-back kidney transplant prognostics, happy days ahead!

I think the shares should comfortably be above their 2020 IPO price of 20p, and given the growing momentum I would think 40p-60p would be a fair price range for now, and once the testing numbers start to pick up, fresh highs should surely be on the table...

I'm adding more today.

DYOR & GLA

Well spotted on the US volumes on Friday SB, that of course translates to 66m UK shares vs the paltry 1mln that traded on AIM. Much of this will have been quant also funds day trading, however, it does suggest that anyone who had cold feet could have exited with ease and once the quant volumes settle down, we may well be left in a market where there are few or no sellers. Think we build nicely from here and the shares should soon be pushing new highs for the year.

Now that the company has cleared the final regulatory FDA hurdle, I’m personally moving this to a ‘Strong Buy’ rating, This is based on the so-called “Trifecta” being put in place (namely: data, reimbursement and regulation), and the likely shift in gears to an ongoing positive news cycle; likely underpinned by further announcements of insurance company reimbursement, feedback from the roll-out of the EVERSANA sales force across the various states of focus, sign ups, adoption and then testing volumes, etc.

I think the other positive development here will be with the brokers, particularly in the US, they will all smell opportunity with regard to the funding requirements and that may well become a positive re-enforcing feedback loop for the share price (another step change). The key here is to keep this all in perspective, as per Mikemine’s comments below, in that it’s just a necessary part of the now positive cycle.

And yes I too think the shares should now be above where they were after the rally from the successful funding round back in Feb, especially given the risk-reduction that has taken place here. I would think Tony James (Jefferson River Capital) and others will be wanting to increase their exposure to Renalytix…

Nb, this is only day one of the new chapter.

DYOR and GLA!

Yes...and so the UK selling continues, albeit in small size. Not sure why anyone would sell now, given the market already seems to be pricing a further delay, but there you are!

The company has lined up EVERSANA to ramp sales this year. I assume this depends on the outcome of the FDA, however, I'm encouraged that if they do obtain the DE Novo Marketing Authorisation, then they'll be moving swiftly to deploy the external sales.

In the meantime, the waiting game continues, but I think the risk/reward favours the brave!

Yes the interest from the UK has been dire, though I suspect that will change overnight once the company returns to being on the front foot regarding news flow from the FDA and anything pertaining to commercial adoption and roll-out. If this was a private company its valuation would be comfortably around the $500m mark, but alas on AIM such early-stage revenue companies are placed firmly in the sin bin until they deliver hard revenue, so short-sighted, but then the risk/reward is all the more attractive for the diligent and patient investor.

Renalytix are presenting at the ADA conference in San Diego 24-26th and at the AANP in New Orleans June 22-24th, so we should have an announcement or two regarding real-world-evidence and utility studies this week, along with an update about the FDA.

Https://www.cms.gov/newsroom/fact-sheets/notice-comment-transitional-coverage-emerging-technologies-cms-3421-nc

A timely update from the CMS regarding TCET (formerly known as MCIT), once again good news for medical devices that have been granted FDA Breakthrough Device designation. Like its predecessor MCIT, TCET sets out to provide a fast-track pathway to obtaining National Coverage Determination (NCD) for Medicare, good news for KidneyIntelX. A 60 day public consultation period is next, and given the consultation undertaken to date the proposal looks robust.

It's worth appreciating that it was MCIT that helped propel the ADRs from high teens into the $30s back in late 2020/early 2021.

FDA to update the market imminently (end of June), with regard to the De Novo Marketing Authorisation, seems things could be lining up very nicely for a rally in H2, let's see!

Good to see the shares recovering on the back of the recent institutional buying volumes, think the shares have much further to run and can see them comfortably back in the 50-60p price range over the summer. The shares are trading on a deeply discounted 2.3x EV/Sales for FY24, 55p level would only put them on 3.7x, whereas the per group average is 4.5x and NIOX trades on 5.4x. The important thing to appreciate is the forecast for FY24 is an untaxing £64.7m, which includes only a small contribution from the new Fermentation Facility and only modest growth in PoC. I think EKF is by far the cheapest play in the sector and now offers double-digit growth ahead, likely for a good few years. I'm still adding here. DYOR and GLA.

Yes all very much moving in the right direction, key milestones all on target and a nice bump in the pricing guidance to $2,650 vs the expected level of $1,500 (from the sell-side analyst Singer CM). I agree this is supportive of the recent price move and calculate fair value around 16-18p at this time, based on the conservative FY24 revenue forecast of $6.1m. One could of course argue the shares should carry a healthy bid premium from Pharma, who may well be interested in Verici as a companion diagnostic, or indeed from industry peers like CareDX who would do well to add such IP and excellence to their shambles of a business, lol... I'm adding here.

DYOR and GLA!

Quite agree, good to see more positive price action in the US, not clear who’s still on the offer at 90p in the UK line, can’t imagine it will be there for much longer. I have added quite a few shares between 85p and 90p recently, but the offer remains. Iceberg seller? Short-interest still very low and declining in the US line, not that it’s relevant as it only totals some 200k ADRs.

Looking at the string of recent updates, it seems clear to me Renalytix is lining up for a big push over the summer, with the view to hitting the ground running going into 2024.

Let's see what else they have to announce heading into the FDA decision and beyond, feels like we could be in for a news packed summer, GMI...!

This looks a very sensible and timely appointment by Renalytix and adds to the growing confidence in the company that KidneyIntelX is going to be adopted widely across their primary major markets of Illinois and New York. They’re clearly readying themselves for the big ramp from late summer onwards, leveraging the likely positive FDA outcome which will put plenty of wind in their sails (and sales), not long now!

Morning all, looks like healthy volumes now going through on the buy-side and it would seem the big seller has been cleaned out, well let’s see what gets disclosed on RNS.

I'm taking this as an encouraging sign that the lows could well be behind us and the shares could now re-calibrate back to a sensible discount to fair value and then hopefully onto a premium as the Fermentation revenues start to kick in later in the year and in 2024.

I have added a few more at 27p this morning.

DYOR and GLA!

Hi SB, the data suggests Marlborough Fund Managers have been the ongoing seller and who may well have completed their selling on Friday, given the volumes that went through. They reportedly cut their position from 32m to 16m in the last update in February, and so I think it's reasonable to assume it's them. Let's keep a keen eye on the RNS updates.