Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
Aim Rule 11 "An AIM company must issue notification without delay of any new developments which are not public knowledge which, if made public, would be likely to lead to a significant movement in the price of its AIM securities."
Dependent on your strategy as a company this rule can easily be managed. As one example, be slow in negotiating contracts. Avacta's aim has always been Oncology so protecting that brand must be their first priority. Diagnistocs are a great bonus that will pay the bills without further dilution for more expensive phase 2 and 3 trials. Phase 1 i imagine can already be paid from existing balance sheet .
As I say LFT news will be coming shortly.
1st line of todays RNS
"Avacta Group plc (AIM: AVCT), a clinical stage oncology drug company and developer of powerful diagnostics based on its innovative Affimer® and pre|CISION™ platforms"
IMO delay in LFT news is to allow AVA6000 news to come out 1st. Oncology is the core of the business and there would be a danger of this being overshadowed by LFT news if that came out 1st.
Since won't be any AVA6000 news for a while LFT news can now come out. Let's see.
Buffer Solution is not a bottleneck. Date of buffer solution says manufactured July 27th and expiry Jan 2022. IMO its a just in time manufacturing date since buffer use by date is earlier than LFT use by date.
https://www.reagent.co.uk/coronavirus/ is just one manufacturer of buffer solutions in UK that can supply tens of millions per week.
Buffer Solution not a bottleneck. Date of buffer solution says manufactured July 27th and expiry Jan 2022. IMO its a just in time manufacturing date since buffer use by date is earlier than LFT use by date.
Checking instructions it says "a test identification label can be affixed to the device"
Clearly this is so that labels can be printed seperately according to the country or place sold without affecting overall manufacturing supply chain.
Makes it much easier to sell to airlines and internationally.
Good strategy IMO
Note no QR code on LFT cassette. What might that mean?
These are images of my shipment unboxed. Useful to analyse all the labelling. I only have Dropbox so use a free trial account if you don't have it.
I'm very pleased to have the product in my hands at last and will now throw away all my NHS innova or orient rubbish.
https://www.dropbox.com/sh/jo9qx5yujep5frm/AACPZFqihLQz1NqlvftlOzm9a?dl=0
Confirmation from FEDEX of delivery from Bioserve tomorrow. Ill post first impressions tomorrow
I’ve done some complex supply and demand scenarios for AVCT LFTs.
In essence, you look at adult and school populations per region of the world, take a conservative view of the number of tests each person should take per week (for all purposes) and then factor that down a lot since most people won’t test. Then allow for the fact that in each region they will have existing & new LFTs to come available to them. Then build in a gradual realisation that better bests are worth it. Having done that compare it to a supply chain that will grow over time from directly and variously contracted manufacturers (again on a global basis).
On the basis above demand for AVCT LFTs will far outstrip supply.
At this time with limited data from AVCT it’s right to be concerned about competing products but a reasonable analysis shows we can be very positive.
DYOR on the above or similar basis but for me it’s a HOLD.
Parliamentary debate yesterday approved draft LFT (medical devices) legislation. It seems we will shortly have the legal framework for quality LFTs.
https://hansard.parliament.uk/Lords/2021-07-20/debates/C413DBD0-3C6A-4740-99D7-A5E160D8713C/MedicalDevices(CoronavirusTestDeviceApprovals)(Amendment)Regulations2021
The debate shows labour peers firmly pointing out the deficiencies of Chinese tests (Innova & Orient) and at the same time the conservative peers, notably Lord Bethel, saying Chinese tests passed the current protocols even to the extent of being able to detect all variants!! Clearly Lord Bethel isn't going to say anything else since he led the procurement. Also note, he doesn't have the best reputation.
https://www.theguardian.com/politics/2021/jun/30/lord-bethell-failed-to-declare-meetings-with-firms-that-got-1bn-contracts
In the final event what is happening is that we will have quality tests in the UK since once we have to buy them ourselves people will only buy the best and that will become clear quite quickly. In the meantime, the government have no option but to buy Chinese since they are the only ones with scale at this time. I believe the shift from Innova to Orient is simply a diversionary tactic.
In my AVCT financial model I've always had far more test sold and licenced in EU, US, ROW than in the UK by a factor of 4:1 initially and growing to 8:1. Let's see.
Not long to go now before the SP rerate - try to keep the frustration at bay!
I'm 90% fundamentals but do use TA to gain more insights.
MACD on daily chart has never been this low even when company had nothing yet to show.. which isnt the case now. MACD on daily chart is about to reverse, on 4hr chart has reversed . More importantly on weekly SP chart (using log scale) the current drop is only just below .236 Fib of rise from c.14p. If you're a medium or long term holder all is as you would expect from a biotec with great products that need to meet all manner of regulatory, supply chain and commercialisation realities.
If you want profits today there are plenty of other stocks to buy but before you do look at jump in AVCT SP last March when company had nothing but an in house proof of concept.
IMO we're very close to the SP move we all want.
In any M&A deal it's the entire company that is being bought which includes the prospects it's agreed and/or contracted supply chain brings. Part of M&A Due Dilegence is to figure exactly what future the company has on it's own account and with the extra avenues and gateways the purchasor is bringing to the table.
GATES FOUNDATION will have done extensive DD and compared the prospects of the MOLOGIC deals to dozens of other possibilities. They of course bring a vast array of potential avenues to MOLOGIC and its supply chain
IMO this is a defining moment for AVACTA.
I've developed a very detailed financial model for AVACTA in conjunction with a global supply and demand forecast . If anything my model had always been more conservative that released RNS data. That model has a mix of direct revenue, licenced revenue and partnership income for both Diagnostics and Therapeutics. For Diagnostics, licenced revenue far outstrips direct revenue. Until I have alternate hard data the data I currently have suggests profit per LFT test or circa 18%. I've worked with the Donor agencies and know that they will pay a fair margin so there's little chance of a fair margin being a show stopper - especially if you control the IP in demand as AVACTA do for Affimers.
I'm very happy for AVACTA today.
Some reasons to be very positive about Affimers today
AVACTA and MOLOGIC have had a relationship since 2016.
Chairman of AVACTA has close links to GATES foundation from prior Biotecs.
AVACTA have announced they are prepared to supply 3rd world with Affimer reagents through GAD.
Scale is required in 3rd world and Affimers have ability to be developed, tuned and manufactured quickly at very large scale.
Philanthropists tend to follow the leader and GATES FOUNDATION is a leader
All in, there's no question GATES FOUNDATION is very aware of Affimer's potential to materially assist Public Health in the 3rd world. Where they lead many others will follow.
As I said earlier, fantastic day for AVACTA Affimers
https://cambridgenetwork.co.uk/news/mologic-become-%E2%80%98social-enterprise%E2%80%99-after-acquisition-social-impact-funders-and-investors
"As part of the transaction GAH will integrate both Mologic and a sister non-profit entity, Global Access Diagnostics (GAD), which was established by the founders of Mologic with support from SEDF, the UK’s DFID and others in April 2020. GAD is focused on low-cost manufacturing of diagnostic tests, and licenses Mologic’s technology in Africa and South Asia. Mark Davis will continue to serve as CEO of Mologic, with Paul Davis continuing as Chief Scientific Officer. GAD will continue as a separate non-profit entity, under CEO Mark Radford. Both will be wholly-owned and governed by GAH.
A number of other philanthropic funds and investors are currently engaged in finalizing their participation in GAH to further the scope and ambition of the organisation."
Pretty clear Affimer reagents will be used very broadly.
Great news for AVACTA
https://www.gov.uk/government/publications/assessment-and-procurement-of-coronavirus-covid-19-tests/protocol-for-evaluation-of-rapid-diagnostic-assays-for-specific-sars-cov-2-antigens-lateral-flow-devices
I imagine the govt has no alternative to ordering more Innova until the Medical Devices legislation is in place and LFTs have gone through the laborious process in the link above. Note, the proposed medical devices legislation allows them to continue to use existing tests.
Frustrating delay which could have been anticipated earlier but takes nothing away from fact that the best tests, AVCT, are what individuals, firms and the public sector will want to buy - globally.
Here is a link to yesterdays Parliamentary discussion. At 9:47 timestamp UK capacity is estimated at 97m tests per week and growing.
https://www.parliamentlive.tv/Event/Index/09c4fb83-c2b4-47e8-85d5-0b72dba71736 gov debate yesterday on legislation to validate tests
No question at all that Chinese tests will not be used any more and UK supplied quality tests will be. With published tables of quality of tests using common standards everyone will be able to see clearly who is the best.
Good news for AVCT.
Other news other than what we already knew. Brad confirmed some very positive points. In no particular order
. $6m in the bank, c.$2m of warrants to come in & $4m from Agnico. Very strong balance sheet for next phase of growth - 1st phase to prove Anza and bring in majors is now complete
. Brazil Tin JV is huge plus and will be confirmed in "next few weeks"
. Other JV's are also being looked at having gone through DD for up to a year - news on those also within "a few weeks"
. Current Columbia assay results are as good as they get for a tiny part of land holding. Part of getting Agnico to agree to next phase is to demonstrate broader prospects than just ANZA - he must be confident in those given his firm belief next $4m is almost certain. We'll know probably in mid to late August and at the same time have regional analysis to report upon.
. GGP comparison wasn't apt at first but is increasingly more so as "work gets done"
. Assays are taking twice as long as drilling but now better than not at all for months. His firm expectation on assays yet to come is they will have similar strength to ones released to date.
IMO this is as good as it gets for a junior miner.
Pleasure. It makes very reassuring reading and indicates without any doubt the strong position of AVCT and others in the near term.
And here is the proposed legislation
https://www.legislation.gov.uk/ukdsi/2021/9780348224795/pdfs/ukdsi_9780348224795_en.pdf