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These are no insubstantial sources of revenue by the way and most will grow over time, some of them were a substantial part of the rise from the low 100s to higher 100s earlier this year.
MrA is wrong too.
Tests generating moneys - BAMS, Elisa, LFT
Partnerships/licensing generating money - Moderna, LG Chem, Daewong, Point, Biokit, ADC, Astrea
10 revenue sources lcreated or expanded in the last year
Depends on how much you are invested.
Price at any given point is just a reflection of the collective average of what different folk value it at combined with the actions of the MMs. I happen to think its worth much more that 2 quid. But the actual price reflects the fact that average sentiment is a lot lower than that of many holders. There are some good reasons for this.
1. Whatever the dodginess of the Govmt behaviour there were a lot of signals in spring that the sovereign test was happening, that it was going to be pretty large scale and that we were going to be it. I think its clear we would be it still but no some doubt it will happen on a large scale or even at all. The rational facts say it should (govmt has made contracts and 2. Back in early spring most holders would have projected our lft would have been manufactured and sold at considerable scale by now. We are probably not unhappy with our potential capax with the addition of 30m in Europe but I don't think anyone could be happy that though we are told demand exceeds supply we don't have any specific evidence of that yet and are left wondering if its picking up proper steam with distributors and disappointed not mega contracts are yet signed.
3. The company messaging - including CEO messaging. Number 2 plays into the ongoing narrative that AS can't be trusted to give even decent approximations of timelines. I don't think many genuine shareholders think he is dishonesty but at best he has been giving us an absolute best case scenario and leaving out a lot of the detail. For example, from what we see the validation, MHRA approval and TT have taken about half a year. Thus when was it ever realistic that we would have had it on sale in Summer 2020. That was just plain nonsense. The CEO needs to deliver now and earn a reputation for more realistic time framing for the company to gain in sentiment and SP in a big way (as opposed to small bounceback)
A very balanced post Roker. Much appreciated.
Chinese 'goods' and test kits do not belong in the same sentence
there should be - even if they are confident they can sell existing capacity what's wrong with stoking even more demand and then finding a way to supply it or just increasing margins?
Who did that? Lol
Its a valid question Mortgage why are you invested if you think the CEO is crap and why do you support the company on twitter? And why do you pin everything that doesn't go smoothly on the CEO?
Don't agree with Mortgage that Avct are incompetent. I think that AS has been astute in getting the precision and affimer IP and the company is going well overall. But on the diagnostics side and the lft particularly significant revenue has been lost to delays. I believe that had this been in the hands of a big, experienced pharma some of the delays related to technical factors and political factors could have been reduced.
I agree. The current price is considerably below the value that a large pharma can extract from. That's even just short term from the LFT. A big company can leverage production quickly, do same for further study work and use political connections and clout to speed up - and expand the volume of - sales. Within months it could get to a position of 100s of millions of sales a month. In the right hands avct is worth a good few billion and bidders would no doubt be prepared to pay well over a billion for it even at this sp.
its not clear lft testing is coming to an end in end of september in education. It may do. But its certainly not clear it will come to an end in NHS contexts etc. Besides at this price the share is a bargain just for rest of world use.
its not really just hope though is it. The CEO said they were negotiating with HMG.
Doctor100 my prediction would be 3 quid is the baseline based on
1. 30m capacity initially contracted - 25m on govmt loaned machinery plus 5m of capacity via Avacta bilateral arrangements
2. duration 1 year with option to extend for at least 1 further year possibly longer
3 profit to Avct a quid a test = 360m in year 1, unknown beyond that.
To get much higher than the baseline we need something that shows a greater level of commitment on part of govmt such as a very good lower end in the contract range figures - that would imply that their is going to be a ramp of production levels from the 30m to something closer to the 60m that was previously referred to by PA consulting.
What would that very good lower end be? Well 300m magic on a strip would mean maybe 450m quid to get to 1quid profit a test then you would need to factor in maybe 200m quid to supply 60m complete tests in a year from bilateral. So anything above 650m at the lower end for a years supply is a good sign. If its over a billion for a year then we should be looking at above half a billion in profit and more like 4-5 quid on the sp.
I think its going to be a good lower end. My rationale is that if we combine the ODX and Mologic lower ends we are close to 1.5 billion and I would expect similar for avct even in this low margin era. We might be looking at 1 billion profit in that case at the lower end and that should bump sp to 6 or 7 quid minimum. Possibly higher because it would help transform sentiment and optimism for other large contracts in Europe
Naturally a lot of us ****ed off not just by the delays and waiting but by the sp reaction also which seems to reflect both the downsizing of margin predictions and even pessimism over sales. I am convinced it is the best test but also that it is coming into a market with many established players who have been able, to some extent, to mask the weaknesses of their product. So I don't say anything big is a shoe in anymore. But I still think its very likely to go big as major purchasers will be getting to know of Avacta now, understand its superior quality and start to make large orders. Delta will push that process along as many will start to worry that what they currently buy is not merely mediocre but potentially ineffective. And, of course, the need for a test to release eg. in school isolation situations, as well as some clear continued need for test to access, eg. many NHS and care workers and visitors/patients
Avct presentation over 2 weeks ago said they have effectively booked 30m capacity in Europe and were in process with tech transfer. So there is a good supply outlet being set up for European orders. In a previous presentation Al said he hoped that the negotiations for sovereign resulted in not just govmt booked capacity but also Avct's own UK bilateral capacity going to supply UK but in the meantime clearly some of that bilateral is being used for orders through distributor Calibre
..and 30m lft maufacting capacity secured in Europe
the cautious comment refers partly to the fact that they are at early stages of exploring still doesn't it? Certainly don't see anything negative at all - more a case of trying to keep us grounded and not ahead of outselves
great point Monkshood. I dare say in that scenario many will just prefer to do a deal to produce for avacta or white label. We could find ourselves in the driving seat both for for volume and price on both sales contracts and contracts to produce.
Is it us? Maybe. The RNS today was a little cryptic - referring to 'a study' and not saying who was running it and why...Maybe it was an educashion study. Conducted after the morning orange juice break.