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Good to see volumes holding above 500k and the share price recovering back above its 50dMA, next hurdle(s) the 100 and 200 with both currently around 38p, and then we could soon be back in the 40-50p range, closing the gap from Feb 3rd. I also wonder if some of the recent selling pressure from retail could be linked to tax year-end tidying up, in which case we may see the shares pick up something of a tail-wind in the coming weeks. Shares are trading on an EV/EBITDA of 8x FY23 and 7x FY24, both are below half the peer average. Added more at 31p this morning. DYOR and GLA.
I suspect material revenues will soon start to positively surprise, especially now that Mount Sinai has moved from sponsor to commercial contract with Renalytix and more Health Insurers sign up to offer KidneyIntelX to their members. Firstly, the 'known at-risk' members and then presumably, the 'possibly at-risk', etc, either way, the numbers are potentially mind-blowing.
I think that's the point, dilution is just a function of early-stage business growth and we should welcome it and be glad that it's available to ensure Renalytix and KindeyIntelX succeeds. I'm personally trying to look beyond the FDA and well into 2024, rather than the next incremental quarterly update, here's to rosier times ahead! I added more at 88p this morning, slowly bringing my average down. DYOR and GLA.
Haven't they dealt with the cash-burn question with the arrival of the new deep-pocketed investors (alongside the founding investors) in the recent funding round? Why else are they investing, if not to see the company through to commercial success? and isn't further funding just a part of the journey when a company has as much validation, evidence, and commercial interest from health insurers, hospitals and physicians as Renalytix does?
actually looking at the chart and with the recovery process now being well underway, I see no reason the shares can't bounce back to 40p+ in short order, to close the gap from the sell-off from Feb 3rd. I personally see fair value around 50-60p, but I suspect that will require full confidence to return and more visibility on the growing life science/fermentation revenues. I'm adding more here at 27p. DYOR and GLA.
There does seem to be something of a clean up operation going on and a simplification of the business likes and strategy back towards core growth and expansion in Life Sciences with the Fermentation business in the US. I personally think they have a real shot at growing significantly in the US, so much so that revenues could comfortably surpass the Covid peak of £82m and with higher more sustainable margins. Yes of course this will take time but with no debt and good free cash generation, this makes for a very cheap stock in a high quality recurring revenues space in medical diagnostics. Once they get past this reordering phase the shares should comfortably recover above the 50p level and then it’s all to play for. On top of this Renalytix, Verici and Trellus are moving into their early commercial growth phases, having completed much of the preparation and building work necessary for sustained success ahead. Loony pricing in EKF down here at 25p! Check out the interview on Vox Markets with Brendan Gulston at Gresham House last week.
With all this excitement going on I’m buying a few more Renalytix, bargain basement valuations to be scooped up and both are priced only for failure and eternal dilution, bonkers vs what’s actually going on with both companies! GLA!
With KidneyIntelX being a first-of-its-kind prognostic test with an AI element, the update reads as though the FDA are working on their "internal processes" for this to work and that is likely what's taking the extra time vs their initial guidance of a Q1 decision. Not happy with the delay but it still looks like we're heading towards a positive outcome, just later than expected. In the meantime, the company is busy building out healthcare insurance coverage and reimbursement as andypa says below. I think it's a long-term buy at this level, and we're now 10-15p below the recent fundraise price. GLA.
Seeing Renalytix come down in line with markets over the past few days is seemingly at odds with the success of the recent funding round and the anticipated news about them being granted FDA De Novo marketing authorisation before the end of the quarter, which I understand to mean the next 3-4 weeks. Tony James and the other institutional investors who participated in the round (Mount Sinai, Harwood, Polar Capital and Fidelity, to name the main funds), have sent a clear message to the market that this company will get funded to commercial success, presumably assuming they continue to meet their agreed milestones, partnerships, etc. For me the risk/reward of the market cap at £100m vs the market potential, being in the billions of dollars, suggests the shares really ought to be trading in the 250-350p level at this time, arguably much higher. This of course makes the assumption that the FDA announcement is positive and that the company will then have more wind in their sails with respect to marketing, education, sales, etc. I like the risk reward here and have added a few more shares at 115p and 120p this morning, long-term hold of course and let's see what happens. GLA and DYOR.
I'm encouraged to see Fidelity increasing their position in Renalytix, alongside Jefferson River Capital. I think we can now look through the next few quarters, as any weakness will likely be swept up by the longer-term fund managers and the new institutional investors in the recent funding round. Feels like we can continue to follow the big money in on this one, onwards and upwards!
Further positive price action in the US into the close Friday, ADRs closed at $3.71, implying 155p in the UK line. Assuming the FDA blessing comes before the end of Q1, with full de-novo marketing authorisation, then I don't see why the shares wouldn't recover to the 250-350p range, or $6-$8 in the ADRs. Arguably they should be $10+ as that was the listing price back in 2019, factoring in all that has been achieved since then. Tony James/Jefferson Capital on board, let's follow the money!
Fully appreciate the disappointment here, however the shares are now back at the very dark lows of last summer and therefore seemingly treating the trading update as a major profit warning, which it so clearly is/was not. The core business is clearly growing well and in great shape and the reformed management team now need to demonstrate they can create value out of the ADL acquisition, which is heading in the right direction away from Covid, but clearly needs to ramp efforts in this respect much more quickly if it’s to move from laggard to contributor in the coming year. It’s worth adding here that this is the smallest business in the mix and therefore should not be wagging the dog, so to speak. I also assume with ADL not meeting performance targets that they’ll forfeit the additional compensation agreed in the acquisition terms and that will be a saving in due course. I’m more optimistic about the update in March, albeit just around the corner, as they should be able to give clarity on the speed of the cost cutting related to Covid and the shift of remaining resources to growth. Net net, the shares are pricing massive disappointment, having fallen from 50p to 30p and the news flow into summer should underpin their recovery to at least the 40-50p range. I bought yesterday and am adding more today.
Looks like baby and bathwater price action to me, is this not just another reset before stronger revenue and profit numbers are delivered later this year? I'm happy topping up at this level and see near-term upside/recovery to 45-50p.