Member Info for HillSeeker

Not me!
I've not looked into the board for ages and when I do, after closing the pub for the night, I see my name. What a coincidence!
I had to sell some shares in this and all my other stocks last summer to finalise the purchase of our pub, swallowing some very hefty losses, unfortunately.
I'm still invested in my SIPP though and am inclined to just let them sit there until at least the dispute is settled.
I'm now focusing on my new business rather than following the day to day ups and downs of this share.
Things haven't turned out how any of us expected and my only consolation now is that the person in charge invested his own cash when the shares were priced considerably more than they are now - he seemed always to talk sense at the AGMs so, I'm hoping he will at least steer a steady ship until tihey find someone else to take the helm.
GLA
PS - is Airline Boy still on here? Being a Suffolk lad, he's only a 30 minute drive from our artisan inn- surely worth a visit. I love to know whether the tree house ever got built!

Well someone is looking for a lower entry but maybe it's not going to happen.

We're just about to head into Q3. I was surprised that Novacyt wanted to move the AGM to mid year, when they wouldn't have much to show for Q2. But today's SP has got to be looking at to what's ahead and not behind us. By the time Q4 comes along the picture will be quite different.

Poidster's deleted post(from a medic's perspective) painted a bleak picture for the winter months. Covid has not disappeared and, worse still, the UK gov is doing nothing to prepare or mitigate, so we can all imagine the headlines come Christmas.

We will clearly continue with our PCR sales but, his time round, there will be no freebie Chinese rubbish. Instead people and, more importantly, companies will have to buy privately and what are they going to choose? A stick it up the nose job or a spit test? You choose. AstraZeneka trials proved that employee uptake of saliva tests was four times higher than nazal swabs

Then there's Monkey pox which appears to have been spreading unchecked, where that'sgoing no one knows but- we were quick to get a test out and are on the front foot.

Also in Q4 is when we start to drip feed all our new non-covid tests onto the market. And remember, a lot of the competion will fall by the wayside due to the new regulatory hurdles, so we'll be in a pole position.

The DHSC money may not be in the bank by then. But the Abingdon resolution makes clear, what many of us have known for some time, it's a question of when and not if we get our money and whether we're left with 70, 80 or 90 percent of what is owed to us.

Add in Biosynex, Tata, other R&D developments (10 minute PCR, ambient shipping of Promate) and you can only guess where the SP may be. Then they'll be saying they can't believe that they missed such a buying opportunity.

160 is a snitch of what this is going to be by year end , let alone where this is going in 5 years (yes thinking beyond the three year LTIP target of 777 minimum) - we will eventually get our 1bn company and £15 SP

Don't get phased by the minute by minute fluctuations- look to the long term; the future is diagnostics - Novacyt is a big part of the future.

GLA

(This is not investment advice, DYOR)

Poidster's post from just past midnight disappeared, again!
Very suspect.

I'd agree, Sir Digby

The level of testing currently available globally is laughable and this will be partly due to the regulatory hurdles a company has to go through to get approval.

The map of MPX prevalence shown in the link shared by Ad4U earlier (https://www.cdc.gov/poxvirus/monkeypox/response/2022/world-map.html) is more to do with level of testing than with number of cases in the community - we already know it's been endemic in some African countries for a number of years, and that's not shown. As Kaeren said earlier, it may not always present itself with the more obvious postul symptoms., so there could be far more asymptomatic/semi-symptomatic cases in the population than we think.

So, contrary to my earlier email - this may not be a loss leader to show our capabilities afterall. DA did say he was going to focus R&D on where the money is; maybe he is being more true to his word than we realise - this could be rather lucrative if we manage another WHO tie-up. Remember the last one was for 10m just for covid testing in the Ukraine way be the conflict escalated.

I have a feeling we're not going to stay out of favour for too much longer and things may magically get resolved sooner than hoped.

GLA

It's a matter of when and not if.

Cleary, the DHSC dragging this out to save 25% on what they owe if they can (paying ABDX 6.3m of the 8.9m owed). We have cash in bank so not playing ball.

For opportunists investors, this is a no-brainer. Buy at 150p sell at 250p on news of resolution - or keep hold for much larger longer term gains - either way, there is little downside risk when we're still valued at near to cash in bank.

Exactly B2, view it as a loss-leader, demonstrating our expertise and agility.
I suspect they lost a few precious days at the start, taking too long to make the decision to go ahead knowing it wouldn't be that lucrative in the short term in terms of direct revenue but then realised it's such a high profile virus, the opportunity couldn't be missed to demonstrate capability - just my speculation.

Indeed 21ATS, news feeds will then pick this up.

Unless things get really bad with Monkey Pox, I cannot see huge revenues from the test in the near term - hence no sudden rise in SP, but it changes the narrative away form Covid and demonstrates our ability to tailor tests to the latest threat, which is completely inline with our global surveillance/first responder strategy from which large NGO or governmental contracts may ensue in the longer term.

It also reinforces the credibility of the long term plans. We are being asked to trust the company that they will return to 100m revenues in five years. Delivering on tests like this is just a small step in growing that credibility.

Covid remains a short to medium term revenue stream - the virus is clearly not abating. Revenue may struggle over the summer, but going into next winter we are in a strong position with our saliva LFT. There is too much money lost with time off work - is it covid or just a cold? Spit in here and be sure you are not putting colleagues at risk.

I'm feeling positive and looking forward to more of the same regarding news flow - I'm not holding my breath, but the DHSC coughing up is the biggy, which could drop any time, of course, and will completely change the sentiment. I'm sure there is so much going on behind the scenes that we are not aware of. I wouldn't be surprised if the final, out of court settlement is tied up with a new DHSC contract of sorts.

GLA - hanging on in there!

Totally agree, Pokerchips - a lot of cash has been taken out and many sitting, waiting, trying to guess the bottom. I wouldn't say the shorters are without risk, however, as this has dropped so far already. IMO, there is quite a large correction due, so it may adjust quite quickly when people sense the turn.
A pendulum has to stop before it swings the other way - has this just stopped? that's the question.

Is anyone in? - I have a slide showing Novacyt AGM 2021

@DRB yes, of course you are completely right ref the contingency 19.8 m set aside. This is just a balance sheet thing not affecting cash in bank; not sure what I was thinking.

But on the crux of the matter, we are in broad agreement. The thrust of my post was that DHSC have put in a pie in the sky claim to claw back money on goods already received, whereas, we are putting in an honest counter-claim for goods delivered but not paid for.

Yes, the tests may have been difficult and time consuming to use but they tried them first and that's how PCR testing was at the time, before we came up with completely new innovations (Promate™; Co-prep™).

And, yes, the claim may be too conservative for some, who wanted a bells and whistles with cherry on top - but that's not the company's style.

The bottom line is that our cash position post resolution (and it will get resolved) is going to be considerably increased. By how much exactly will be impossible to determine, but it is already very healthy, and all we need to know is that it will be comfortably added to.

In the meantime, the dispute is simply a rod to bash us with. Once it’s gone it’s gone. Certainly, and sentiment will return overnight, and this will fly once more.

I just feel frustrated that others cannot see beyond this, and the value inherent in the company. The current economic back drop is, of course, doing us no favours and it appears that investors of all ilk need more signposting. We are privileged on this small board with the plethora of information that has been gleaned through the research of the dedicated LTHS here, but Novacyt needs to do more to highlight this for other investors out there.

The company is in a very competitive field, so they are inherently secretive. Nor do they want to oversell their hand. If you are developing a 10-minute PCR test you don’t want your competitors to know and you don’t want to state 10 minutes, in case it ends up at 12 minutes – what disappointment that would be!

But they could shout a little more about the fantastic tech. Promate™ is a revolution and it will be even more so once they have fully developed the ambient shipping that they are working on. Remember, this will then all be applied to their other tests.

There is so much going on behind the scenes with business development too that they feel they cannot easily share. For example, Tata has re-branded our goods as their own – and it is key to Tata Medical Diagnostics that it looks like an Indian made machine not a British import, so we need to quietly keep selling and keep schtum.

Investors need some TLC, though, and Novacyt needs to find a way of letting us know that progress is being made in all these fields, even if they cannot reveal the exact details.

#onedaytherodwillbebroken

1 of 2

It is great news that we have finally had our counterclaim announced. It has been frustrating that this has taken so long, but I suspect legal reasons have delayed this and the BoD probably expected this to have gone through much sooner – hence the proximity now to AGM with most votes already cast.

Whilst it is a clear marker in the sand and we are step closer to seeing the cash, it is a little frustrating that all the figures are so opaque. I have been trying to calculate the exact balance still not accounted for and the amount to be paid were either side to win their claim outright and this is difficult with the figures given so far given.

We know that the DHSC have put t in a claim for £134m, and the company has said this figure is broadly in line with the Q4 revenue expected from the DHSC (which was actually 129.1m). In otherwards the DHSC don’t want to pay for anything they received in the last three months of 2020.

They had already held back 24m of these payments, however, and then they also held back another 40.9m for the Promate supplied at the beginning of 2021. So, we hold approximately 64m of invoices unpaid. This figure does not match our 81.5m counter claim, so it may be that I am missing something and they owe us more or it could be due to VAT and interest that the figures don’t quite add up. Taking the 81.5 figure, which we should assume is more accurate, the balance due in the event we lost everything in court and had to repay the lot would be 53.5m (134-81.5). However, we have also set aside 19.8m contingency for the replacement of goods (this would no longer be needed and could be used to pay off the owed money). We would, therefore, need to take 33.7m (53.5-19.8) from our cash in bank (currently 101m plus revenues from 2022) – leaving us with at least 67.3m as the very worst end of the spectrum.

This is to me fanciful on behalf of the DHSC as, they received and used these products and in my view, this is never going to happen – but it is their claim, nevertheless.

2 of 2

For me the most likely worst-case scenario is actually that we are ordered to replace the goods delivered in 2020 and we are unable to claim for the unlost stock provisions for the expect 2021 orders. This is what Novacyt have deemed their worst case too and they set aside a provision for 19.8m in the accounts for this event plus they have already written down the stock. As this money is not included in the 101m in bank our cash would not be effected and we would still be owed all the unpaid invoices. Giving us a windfall of somewhere between 60 and 80 m (depending on the tax position) to be added to our account. I will assume an after-tax figure of just under 60m leaving us with 160m in total cash.

What we are hoping for, however, is that the DHSC are forced to see the game is up, they capitulate and pay us what we are owed. We receive the very reasonable 81.5m requested plus we no longer have to set aside the 19.8 m stock provision, so this too can be added back to our account. Tax will have to be deducted from this 101.3m figure. But we could then claim for the 35.8m exceptional costs incurred due to the dispute, as discussed by other BB members. This scenario would see us with well over 200m in the bank.

So, possible final cash positions range from a very unlikely 67m through to the more likely area of around 160m, if we are forced to compromise, and all the way up to a more hopeful 200 plus if we are actually just given what is owed to us.

I appreciate that Novacyt is under certain legal constraints, but it is the lack of clarity around the situation that I believe is holding this SP back. This allows the more mischievous to scaremonger and bandy about worst case figures that are competently false. I am happy to stand corrected, but I really cannot see any possible downside to buying at the current SP.

In my mind the scenario of 67m cash in bank is possible, but in theory only, the chances in practice are actually zero as they have actually used the tests. The scenario is far more likely to see a final cash on book at between 160m to 200m and this counts for between 225p and 281p per share – just in cash. Not giving the company, its growing network of connections or it’s IP any value. Once the DHCS shackles are off and the cash position is clear this will multi-bag. It is just going to take time to work its way through and in the meantime the field an opportunity in diagnostics is just going to grow and grow. It is just a shame that no one from the company is able to articulate the position more clearly at this stage. I hope that we do not see too many mor LTHs bow out at this low point and the at the company can devote some serious time to attracting institutional funds an point them to the bargain that is hidden in plain sight.

GLA

Novacyt appear to have scored a complete own goal by bringing the AGM forward without first announcing some more positive news.

In my mind, there can be only two reasons for this.

Firstly, they could be of the view that they are generating long-term shareholder value and what the SP does in the meantime is of little consequence. This would clearly be a misguided position. Not all shareholders have the same investment cycles. Not taking care of the short-term value creates an illiquid, toxic asset that people will want to stay clear of, lest they too become trapped for years.

The second is purely, a timing issue. We know that a least two pieces of news should be reported before the end of June and perhaps they anticipated news being released sooner than they are now able. We know that they expected Monkey Pox to be available within a three week window and we also know that they have until the end of the month to respond with a counterclaim in the DHSC dispute. It would be good to have taken this next step sooner. As Kaeren has already pointed out, we do not expect this to be as large a figure, as we already hold much of the cash for products delivered, even if it has been ringfenced and is not being counted in the accounts as cash in bank (i.e. it is not part of the £100m plus war chest) , it would still be reassuring to see this milestone passed.

Two things are, therefore, likely to happen. Either one or both these news items happen to drop before next week’s meeting and we see a consequential boost to the SP, which may or may not be too late for us to become quorate for the meeting. Or, we see next week’s date come and go. We are not quorate as per last year, we then see the news flow in time for the second meeting, at which point we become quorate and all carries on as normal. In either event, there will be some who will seek to profit from the short-term turbulence (hence some Twitter/LSE posters trying to create uncertainty and drive the price down further – hoping for a lower entry point) but in the longer term the SP will recover.

This is not great for anyone who needs the cash in the short term and a poor and unnecessary way to handle a straightforward PR situation. It has, however, as many here are now pointing out, created another great buying opportunity for anyone who still has any spare cash, or new investors with a view to a longer horizon. But that includes hostile predators; with SP value well under asset value, it has left the Novacyt vulnerable once more to a low ball buy-out from PE or competitors.

Clearly, they should have given more thought to the timing of the AGM when ‘tidying’ their calendar and done news first and AGM second.

GLA

When will this government ever learn the basic laws supply and demand economics? Just as with the 'right to buy' scheme, this new initiative of using more taxpayer money to buy houses is just going to do the opposite and add even more fuel to the fire.

Oh well - if the existing affordable stock is to be sold off, it will only need replacing - more bricks please!

and with this constant buying by the company it's only a matter of time before the 190s properly gives way and then were back to 200 plus - suspect most that want a quick return have set their sell limits somewhere just below the psychological 200; at this rate these have got to be cleared soon

Thanks for the link, Kaeren

On top of the affordability, reliability and compact footprint, Tata draws attention to a number of more technical features, such as the ultra fast ramp rates, already highlighted by Sainsmith, the plug and play simplicity or the 32 well capacity and full spectrum optics. But it's worth downloading the brochure for further details on these. For example, the ultra fast ramp times is referring to the heating at a phenomenal five degrees per second and cooling at an impressive four degrees per second to a achieve rapid thermocylcing (repeated heating and cooling cycles required by this PCR technology), but the section below is what really caught my eye:

"Service & Support
• Multiple support touchpoints to ensure instrument uptime
° Toll-free number for technical support
° Remote troubleshooting
° Pan India onsite visit by Tata MD expert
• One year warranty with free lifetime software upgrades • Affordable service packages
• Lab workflow digitization is available with automated integration to lab LIS or a specially designed Tata MD LIS platform. "

Did you see hidden amongst all that detail: "Pan India onsite visit by Tata MD expert "

They are not playing at thus just, they are not just putting a substantial effort into marketing our little machine, they are creating a sales and support network across the whole of India for it!

It's not their machine and I'm pretty sure it's not their tests either (as they are completely new to all this). It looks like the tests listed are white label from a range of leading suppliers and one or two of these could even be ours. They are clearly still using Covid to get the machines out there but, being open platform, no end of tests could be run on these - malaria, dengue fever or monkey pox to name but a few.

Opportunity beckons!

Finally, the news flow is starting to trickle in our favour.

There's no doubt that some of this is slow burn, but significant, nevertheless. We know that Covid is going to remain endemic and could lead to many hours off work (not to mention, it is still potentially deadly to certain vulnerable groups). Employers will want to reduce absence from work and protect the vulnerable by screening, and what better way than a quick (15 mins) non-invasive LFT. Novacyt's own research in collaboration with AZ has shown that when offered oral tests (spit tests) the take up by employees is manifold greater. You don't want someone with a minor snivel staying off work next winter, but equally, you don't want people coming to work and spreading the latest version of Covid around. The pandemic (and panic) is over but substantial revenue could well ensue from this test which has a significant advantage (USP) over other Covid LFTs.

Then, from GB News we find out that our RUO monkey pox test for use in the EU will be ready just in time (under 3 weeks) for the AGM! That should provide another little boost. And, equally significant, is that DA is getting out there. Whilst he only answered a couple of Qs, that doesn't matter - just being there meant the professor mentioned the Novacyt name for him - which is better in a way. This type of activity together with the far more coherent website will pay dividends in terms of brand recognition, leading to increased sales and investment interest.

But it is our global reach that I'm most excited about. Although we previously had our foot in the door in China, I think the Chinese authorities have squeezed this shut on us and the group recognise that, despite the market being immense, there is little chance of any inroads, due to the secretive and closed nature of the regime. However, the subcontinent of India is quite a different matter. The Tata connection could prove explosive as they get a grip on several, prevalent infectious viruses through a network of franchised labs providing POC testing with our kit (and possibly some of our tests). They appear to be creating some form of national disease control.

The WHO will also be turning their attention away from Covid to what they see as far more important, vector-borne diseases in developing countries. Our strong connection with the organisation and the way our tests and equipment have developed to be more transportable (Versalab - lab in a case/trailer) and no need for sub-zero transportation (currently being developed) plus easier to use (Promate - reduced pipetting is transferable technology and patented IP) puts us in prime position for potentially lucrative contracts.

And finally, we have a very strong case in the dispute with a windfall due – but no one knows when.

All slow burn stuff, but indicative of this being a huge investment opportunity for those with patience. Investors are wary, but as trust and momentum builds, so too will, hopefully, the SP.

Thanks Larry - very interesting. Bellow is the full text as the final paragraph seems to have been cut off.

To me, it looks like the investment is partly speculative and nothing too developed yet. From my understanding of the text, they already have a partner in the UK but they see value in the PCR techniques that Novacyt have and are developing , so want to have a share of this, even if they cannot be directly involved themselves. More formal developments in terms of partnerships to harness the synergies they have with one another are also possible, but nothing has yet been formally developed or agreed.

I may have misconstrued this - but, to me, whichever way one reads this, Biosynex are seeing value in Novacyt's IP and trajectory.

Google translation from Bourseman:

 Q: why did you invest in Novacyt?

The question was asked and about the desire to take control of it (without answers, of course, market forces).
The answer was quite developed but the main point is the synergies and the PCR techniques that Nova is developing.
They seem to be ahead and have mastered PCR techniques/REM methods which are not yet well known, in any case not developed at Biosynex, hence the attraction for the box.
They think about synergies and possible partnership.
It allows you to have the right to the chapter, to be present without necessarily predicting/considering what will happen next; they already have agreements with a company for the UK where Nova is well established and for its market, its techno etc.
For the moment the possible strategic partnership has not yet been confirmed in the exact words of L.A. but it is still under study.

Thank you, Neilrich3 - all very exciting stuff.

"All these could see the number of molecular diagnostics tests explode over the coming years. According to analysis by Tata MD, Molecular market growth numbers per estimates are 14%"

It looks like Tata MD are giving support and advice to help the set up of small independent labs into molecular diagnostics and may be providing them with our kit!

Sounds like they will use such a network of independent companies to rapidly grow until they have the whole of India is covered:

"First, it is important to conduct due diligence of the demand and supply dynamics in your area of operation and ensure the market is not saturated with established molecular setups. If required, evaluate an alternate location."

And just to be clear, they're talking beyond covid here. Our kit could be used across India to detect anythingfrom HIV and malaria to variouus cancers:

"Real-time PCR assays are the cornerstone of a variety of diagnostics pathways beyond COVID-19 such as those used to detect from drug resistant strains of TB, infectious agents like Hepatitis and HIV, respiratory infections like RSV and Influenza, and cancer-causing viruses like HPV. PCR assays are also available for detection of sub-types / strains of vector borne diseases like Malaria, Dengue and Chikungunya and increasing in popularity. PCR panels are being increasingly used in oncology to detect cancerous mutations in the patient genome. '

#tipoftheiceberg

Yes, the link to article is much appreciated and highly relevant. Thank you WBAFC.

"India had conducted 775,336,978 tests out of which 441,517,381 were RT-PCR."

440m PCR tests - It's quite clear why Tata is moving into this space.

The diagnostics industry, and in particular home test/self diagnosis and POC, are quite embryonic. This will be massive in a year or two and they clearly want to have a part of it.

This hire is significant.

When they said they are winding up Lab 21 and Microgen, they made it sound very clinical and separate in terms of accounting within their presentation. This is all good for investors, as we can see that it is not going to place large one-off costs on the business which usually accompany such dissolution. They say 'cost neutral' - but there is clearly some cost - but it's restricted to the equivalent of the Lab 21 and Microgen total profit.

But as an employee you may be a little mire nervous. In terms of employment law, this will require a 'restructure' of the entire Novacyt group, which means that they will be able to look at all their staffing and positions afresh. There is no simpler or more cost effective way to remove anyone not pulling their weight or any positions surplus to requirements whilst allowing the company to keep or promote the very best. This can be done across the whole company. Teresa will have been brought in to help with this specialist task of 'building new teams', which will significantly help in cutting post-postpandemic costs effectively and efficiently. Again, this is good for investors but not so good if you're a thumb twiddler and not really contributing to the strategy.