Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
Good to see the resilience of the shares as they rebound from the recent sell-off, looks like Baillie Gifford took the opportunity and increased their stake and the shares are now hovering around their 200dMA at 1171p, think we could see a break to 1400-1500 if they manage to break above this... Kainos is one of the few decent-sized UK companies that are benefitting from the revolution in AI and ML... Happy to own this for the next 5-10 years.
...good to see the shares playing catch-up this week, one of the few UK listed companies that compete with the large US/Global players, WorkDay recurring revenues are growing thick and fast too, roughly twice the growth rate of the core govt contract business, what's not to like? GLG are short about £10m, not for long one speculates...
..think they'll be pushing on many open doors in terms of kidney transplant centres, once they have the first clinicians using Clarava in a real-world live environment the word will spread, trusted sources couching for the product will only help leverage any sales efforts.
...fully funded through 2026, by which time Thermo Fischer will have a full 360 view on the present and future value of Verici's game changing suite of diagnostic/prognostic tests for kidney transplants in a real-world/commercial market setting. How long do we give them before they get bid for?
I have added some at 9p this morning and will take up all my allocation in the Retail Offer for sure.
Happy days, finally a decent company getting the funding it deserves!
...yep, completely agree, this is a big deal in this market, huge vote of confidence from existing and new investors at this lowly valuation! Other deals are being priced at significant discounts, 9p is practically flat on the past week and my view is that it's a discount to where the shares should be trading on the Thermo Fischer news, 15-20p. In a normal market, where future growth has value, the shares would easily be 40p+
Jump in, the water's warm!
...this should firmly remove any concern or doubt about funding and runway, as the company will be funded well into 2026, giving them plenty of time to leverage their newly contracted licensing deal with Thermo Fischer and exploit their existing product pipeline and IP, onwards ho then!
Well done for hanging in there SB, I continue to hold as there seems little sense in selling down here, however, like the market, I’m waiting to see news about material adoption and take up before being prepared to upsize.
It’s been a long five years, think there’s still a reasonable chance of a strategic partnership, like the one struck between Verici and Thermo Fischer, but again it’s a buy the actual news event rather than speculate…
...quite likely they crossed over at GF, if not, they'll certainly have plenty of mutual connections from their time there, even though they only overlapped Feb19 to Dec20.
it's a small world at that level for sure.
...CFO hire looks timely and should add confidence and weight to the senior management team, according to LinkedIn Jutta spent 10 years at AMD (Dresden), 12 years at Global Foundries (US) and the last 2 years at Intel Foundry. Well connected then.
...as far as I understand it they're now funded until mid 2025, assuming zero sales, so my view is that they'll start to see early interest from their Clarava launch via TMO in Q2, and given how well positioned Thermo Fischer are across the US, Kidney Centres and Hospital systems, we should expect to be positively surprised. If so, they may move fairly quickly to break-even thereafter and any funding that follows could or should be for growth (not survival) capital.
Well that's my two cents, one to own and tuck away in the back book and revisit when the newsflow from the Q2 launch picks up... This said, and in the meantime, they may well go on to announce further license deals for Tutivia and Protega once they have that up and running.
..drivel and pump and dumpers aside, Verici looks set to pick up testing momentum heading into the second half, as sales via Thermo Fischer are scheduled to get underway during Q2. I would expect a fair bit of news flow around the start of that process and assuming sales go well then perhaps the shares can move to recover their IPO price of 20p and build further from there.
Regarding potential testing volumes, there were reportedly ~25k kidney transplants in the US in 2022 and the company usually references an annual number of 20k for the US, conducted across the 200 or so kidney transplant centres.
"In 2022, a record 25,498 kidney transplants were performed in the US, according to the United Network for Organ Sharing (UNOS)."
Assuming Thermo Fischer has full coverage of the kidney transplant centres and a steady adoption of the Verici testing suite, would it be cautious to estimate 1-3% in their first year, so 250-750 transplants? How many tests per transplant, 1-3? So an initial guide range of 250-2250 tests at $2,650 per test? This implies a gross revenue range of $663k to £$6m at full rate.
Thinking further ahead let's assume they achieve a market share of say 15% in Year 2 and maybe a bullish 30% in Year 3... Again, assuming a testing rate per transplant of 1-3 then this implies a revenue range of $10m-$30m for Year 2 and $20m-$60m for Year 3.
I have no clue if any of this is possible, or realistic, but what I like about it is the low end numbers easily underpin the current valuation and therefore any positive surprise to this suggests plenty of upside and who knows what level of activity and testing adoption rates lead to Thermo Fischer progressing their relationship with Verici to a full acquisition/take over?
Net net, 10-11p or market cap of £18m (no debt and £5m+ cash) looks like a good opportunity to me!
Nb, I have been a holder since they IPO'd back in 2020, sold a few into the spike around 60-80p and have been steadily buying those back and more over the past year.
GLA and DYOR!
…actually the company could well surprise positively with news about their first material enterprise deal with a health insurer, which could well get them to break even as was discussed during their last update. They guided towards year end so it’s arguably overdue… if so, the shares could well head back towards the IPO price, even half of that would be a multi-bagger from here, silly cheap, but only if they get to closing material deals, else it’s just a cash burn story…
Another set of solid results from IntegraFin, core business should outperform markets if the shift in interest rates continues into 2024 and their new time4advice business should continue to add plenty of icing on the cake as it becomes more established across the UK IFA network. Think IHP surprises in 2024 and starts to outpace AJB and HL…
...agree the shares should easily be 20-30p on the back of the Thermo Fischer deal alone, with only positive news catalysts likely ahead, though the issue may be the company is just too small and illiquid for specialist sector funds to care at this point? So it may be down to us retail and the existing insto fund investors to hoover up the shares before they get acquired sometime in 2024/25. Any material revenue/testing traction in the meantime, will also help the shares re-rate higher.
I added more at 8p on Monday, my average is still under water but not for long!
Looking at peer company Endava, it seems the market is starting to price a recovery in H2 earnings and given how these companies track each other in so many ways, one wonders if Kainos is putting in a base here from which to build a recovery. I see Investec and Stifel have both published research notes this morning, the first with a price target of 1800p and the second at 1364p. Interesting to see GLG Partners have recently taken a short position, seems rather late given the price over the last 12 months but hey, what do I know?
I am looking at opening a new position here, having last owned it back in 2019-21.
Any thoughts from the floor?