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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?

Ok, a quick review of the shareholder cap table suggests the recent and ongoing seller is/was Marlborough Fund Managers and they're now done by the looks of it. They only had 90k shares left out of 1.6m from May-22 when they started selling. The only other sellers I can see are retail/private client brokers.

In this case, it looks like the overhang should now be firmly behind us and hopefully, this puts a bit more wind in the sails of the share price!

There may therefore not be a TR1 for this sale but perhaps there may be one or two for any new fund managers joining the party...

Looks about right to me, expect TR1s next week or two, not sure why they don’t get published T+2 or 3.

...as mentioned below, there has been an ongoing seller for the best part of a year and it's unlikely whoever it is will suddenly change course and become a buyer. No clue who the seller is yet or how many they have left, if any. Either way, it's an opportunity for other funds to get involved and I'm sure the broker/dealing desks will be making outgoing calls following the news. Hotel Chocolat and the City Pub Group both got bid for today, doubly highlighting the ridiculously low valuations of UK micro and small caps.

It may be time to change strategy and start buying the news...

I added more today at 9.5p.

In April the shares rallied close to 20p, purely on speculation of a deal like this, now that we have the terms of the deal it’s clear the value could or should be much higher, especially as the deal is open-ended in terms of royalties and there’s room for other deals to be made for other territories around the globe.

House broker Singer Capital Markets have sensibly valued the business presently at 30p, based on their initial assessment of the Thermo Fischer deal. There has also been an ongoing seller for months so I’m not surprised the shares are taking a breather, but I expect this to be brief as the wider micro-cap fund managers absorb the new found fortunes in this deal and price in the possibility of further positive announcements over the coming year, as the partnership with TF develops.

Also with the Mars/Hotel Chocolat deal this morning it really highlights just how much value there is on the table in many of these micro caps.

Has anyone looked at Trellus (TRLS)?

…could Trellus be up next to announce their major enterprise healthcare provider for their Elevate service?

Watch this space as they guided for us to expect news update before Christmas.

Stock is silly cheap at 50% of net cash, AIM market broken?

…would be good to see this back above the original IPO price of 20p from 2020, especially given what they’ve achieved in developing Tutivia, Clarava and likely soon with Protega… the Thermo Fischer license deal validates the value and application of this in TF’s product portfolio and pivots Verici into being a license/IP play which should offer higher margins and revenues without the need to ramp costs across the board to achieve sales, etc. why re-invent the wheel when others have already done that do well!?

Hopefully Renalytix follows Verici’s lead here and both go on to recover far more than their original IPO valuations.

I continue to own both and have added more today to average down further, the king is dead, long live the king!!

That's some dark thoughts there SB, suggests we could be at or near the nadir in terms of bearish sentiment, darkest before the dawn, etc. I remain fairly upbeat, despite the meltdown in the share price. We've been here before after all, and both Armistice and Millennium have been actively amplifying the negatives and risks whilst there's been no news from the company, well it's what they do of course, QED. This said, we do need to hear more material positives from the company next week if the current negative sentiment is to turn around. I would think they'll have plenty to say about cost control, runway extension (maybe pushing existing cash out to 3-4 quarters) and discuss their options of capital raising to extend this further. However, my main interest is in what they have to say about partnerships and how the sales coverage is going across their three initial focus states/regions. I also have the same question about what their salespeople are doing and perhaps we might hear something about this from the newly appointed CBO, especially given he was present at ASN last week.

LONDON and SALT LAKE CITY, Nov. 07, 2023 (GLOBE NEWSWIRE) -- Renalytix plc (NASDAQ: RNLX) (LSE: RENX) announces that it will report its first quarter fiscal year 2024 financial results on Tuesday, November 14, 2023, before market open. The Company will host a corresponding conference call and live webcast to discuss the financial results and key topics, including business strategy, partnerships and regulatory and reimbursement processes, at 8:30 a.m. (ET) / 1:30 p.m. (GMT).

Let's see if the comments around partnerships prove to be more material than the last update... I still think we're looking at sales moving up a gear (or two) in Q124, but hey we may be positively surprised, especially given how low current expectations are, well let's see...

Armistice has been short for over a year and I believe Millennium Mgt is still short but below the 0,5% reporting threshold. The US short-interest went down close to zero on the back of the FDA approval, which no doubt added to the spike on the news, however, I sense those shorts have probably returned, though I await the update on the US SI number, (which are imminent, to confirm this. This said, do the shorts really matter in this market, which is heavily discounting any and all companies that are burning cash, I suspect therefore that the shorts are just a drop in the ocean, though they could of course become helpful on positive news. I think my summary here, fwiw, is that 95%+ of the bear case is priced into the shares and less than 5% of a positive outcome, bonkers, but there it is... So even a small amount of positive news in the right direction re: cost reduction/runway extension, revenues, testing adoption, partnerships, and any possible strategic interest (think Novo-Nordisk, AZN), will likely gap the shares materially higher.

In the meantime, the bears are sadly in charge, we've been here before (this time last year), however, the risks to the upside are now materially higher given they have the FDA and they're in full-on marketing/sales mode.

There is of course a risk the company gets taken private, however, the US ADR listing may be to our advantage here, as any such action can surely only lead to a massive lawsuit, though that's just speculation on my part.

Think this is just what happens when there’s no news and one active hedge fund is manipulating the share price down (namely, armistice capital). Seems ASN went well over the weekend. It’s still early days but there’s still a good case to be made that revenues start to pick up materially in Q124 as the main focus regions/states start to come on line. There’s also TCET (formerly MCIT) which could be announced before year end and that could fast-track national access to Medicare and Medicaid, and we’re also waiting to hear about the final KDIGO guidelines which could also be transformative by including KidneyIntelX in the standard of care across the US and beyond. It’s always darkest before the dawn they say…

Good to see higher volumes this week with 2mln on Monday and 1.3mln yesterday, are we finally seeing the insto fund managers returning to EKF? With any luck the lows are now behind us and with the new Fermentation facility open for business, we could finally be getting back on the front foot with regard to positive news flow, albeit still early days.

...well said SB, I very much agree the company needs to steadily rebuild their credibility with the market and in time demonstrate that investment in the "state of the art" fermentation facility offers a better return than say returning the cash windfall from Covid to shareholders by way of a special dividend. Having spent some time researching the LS/Fermentation opportunity out there, I'm optimistic they'll have a high-quality pipeline of premium OEMs to help grow the business with, but execution and management are key, as ever. Regarding FCF, the PoC business will be steadily growing its contribution on that front. Now that the investment in the facility is complete, the company should be able to breathe easy and maintain its debt-free operations. I also hear (indirectly) that the post-update meetings with insto fund managers have largely gone well and that some new and old funds are returning to the cap table, albeit in relatively small sizes looking at the recent daily volumes.

Stability, discipline and growth are all keywords going forward, here's hoping they deliver on all three.

Nb, the current valuation of 2xFY24 EV/Sales vs peer group 4.4x gives plenty of room for upside.

Yes quite so, though it would have been nice to have had some material contracts to show for his time in office, but hey ho, they now have a very well connected veteran in the CBO role, so things should start moving up a gear imminently. Seems odd to add to a short when the company is so close to commercialising sales outside Mount Sinai, but then who can fathom the mind of Armistice Capital's Healthcare/LS team? They've been short for ages and added to their short on the eve of the FDA news back in June and again recently, Oct 12th I see (albeit small adds). This only amounts to 1.52% of the equity and the short in the ADRs now only totals 209k ADRs/418k UK shares, so £190k in today's money? It's all very small beer, especially when you put these into the context of new investor holdings like that of Jefferson River Capital's 8.3m shares, and it looks like they added a clip of 250k UK shares last month, I'm with Big Tony, in for the long haul, buying the dip, stuff the bears! H

...think it's more like the big clear out as part of the long overdue cost cutting program, Scannell probably didn't much like the pivot towards a UK management style vs US... about time they got costs under control and used that to extend their runway, well that's my two cents anyway. let's see what they say in their update in November... think we may be positively surprised by how much they could be extending their runway vs current narrative (being spread by the bears/short hedge funds), well let's see...

...that's a good observation Jatw and the bump in the ADRs last night seems to have been driven by this view.

I note the company's Real-World-Evidence studies are providing increasingly useable and actionable data for big Pharma like Novo Nordisk and AstraZeneca's T2D/DKD drugs, so my humble view is "when, not if", and therefore likely just a matter of time before we hear about such partnerships, or indeed hear from the likes of the FDA that such drugs may (in the future) need to be prescribed in conjunction with a companion diagnostic. Food for thought in these dark times...

Sorry, I meant to say: If it gets them to significant revenue growth, count me in!

Interesting points and perspective SB and UH, thank you! I would add the market may also be completely missing the point and value of having KidneyIntelX included in the KDIGO guidelines, which is largely expected to be finalised before the end of the calendar year.

Such inclusion in the final guidelines will introduce KidneyIntelX into the national standard of care and I just don’t think this has been appreciated, at all. In essence, it implies every Physician/PCP will ultimately have access to the test for their T2D/DKD patients (all 14m of them). Additionally, such inclusion would surely put KidneyIntelX firmly on the ‘must have’ list for every insurer, as why would they expose themselves to not offering their members the approved tools to support national guidelines?

The company of course needs to fund its pathway to commercial success, but who wouldn’t continue to back this horse, given the apparent full-house of data, FDA, KDIGO, reimbursement, etc??

The share price collapse since the results makes little sense to me, yes they need to raise more capital, but once revenues take off no one will remember the much speculated about dilution. If it gets them to revenue, count me in!