Member Info for Jatw

The old motto that it is better to travel than to arrive maybe applies. The reality is that most trials fail...so there will be disappointments along with successes....if they get 3 drugs to market before end 2021 they will be doing well.

They are well funded for 2-3 years at which point they need to be generating significant cash so that they can borrow to develop the next discoveries rather than dilute shareholders....significant SP gains if they can manage that.....

Just listened to CH on the webcast...was saying that the Lilly deal was a significant opportunity and did not understand why the market did not receive it well......
Time will show who is right....hopefully CH but still some more explaining to do to overcome the analysts who are overwhelmingly US and western market oriented....Lilly is surely big enough to be able to afford to do the elunate programme and buy loxo...it is not clear what the risk reward balance is.....something for CH to work on with the FY presentation in March.

I wonder if CH is going to be asked about Lilly buying LOXO and the comparable value in the pipeline of products..
Lilly, GSK and BSM have all done multi billion takeovers to gain oncology pipelines...makes me think HCM is being undervalued because of the perceived Chinese ownership

Looks a fairly comprehensive set f slides....it will be interesting to hear what CH has to say and what questions he fields on the recent fails.

The next demerger in the FTSE100 is at Prudential where the UK businesses are going to be separately listed. SH will get one share in each for each current Pru share. There should be no change in total value at separation.

There will be some realignment of holdings by investors who prefer one co over the other as they have different characteristics for growth and income......the same will happen with GSK. One part will look like AZN and the other like Unilever. This will cause some divergence in Shareholder returns.

What you decide to hold will depend on your aims and risk appetite but if you hold GSK now, you can hold both and have the diversification benefit.

Davey I think you have said in the past that this share drifts sideways /down in the absence of news and then advances quickly on positive news.
IMO the SP is likely to trade sideways in 2019.... there are few trial results due....some boring delivery with Lilly is needed to prove cash generation......the even cautious use of potential breakthrough therapy with the H2 update got everyone over excited and has created a credibility issue....that may take some time to restore.
Mgmt needs to be clear on strategy and understand if immunotherapy or new technology is going to turn their work into Betamax products....I am encouraged by the collaboration strategy as this is also a way of gaining insight into latest therapies and diversifying the risk.

HCM is still a good research led development company with lots of clever scientists working for it....but it is operating in a high risk environment.

Some more poor news and it could drop into the 20s.....but there is a good chance that it will be much higher by 2021.

CKHH as majority shareholder also has decisions to make that impact us as PIs. It will seek to optimise its value so I would not be surprised to see HCM merged into or sold to a larger Chinese pharma company that wants a research base. They can afford analysts to work out what to do and assess the value of offers which I am sure will be regularly received and reviewed.....I would consider a partial sell down by CKHH even to a new core partner as a strong sell signal.

Like Miti I would not be a buyer at present, but am not a seller as I don’t think I can time the market and this for me is a long term play rather than a short term trade.

This should be trading at 60-70% of embedded value (what mgmt think the business already on the books is worth) which is 130-150p.
Management needs to clear up uncertainty about how it will meet the additional capital requirement and then the SP will be free to rise as market conditions improve....value here but may take a while to emerge as markets are somewhat fragile at the moment.

Looking at this from a couple of years ago....shares are still 2-3x. Arguably the 50-60 GBP range was too high too soon. This share is news driven.....there was a lot of positive news in 2017. 2018 has been a waiting game for more news which has turned out to be disappointing.

What prospects for 2019...

HCM needs to show that selling drugs in China can be profitable.....there should be volume, but they need to be paid a decent return. This should start with Fruquintinib this year....

Also successful trials (and lack of competitor breaksthroughs) - these do take a long time in oncology.

This is a difficult share to value while there is still much in development and there is anti Chinese sentiment in western markets.

Not sure there is much news flow to make the SP move up in 2019....but by end 2020 prospects should be clearer.

London market was always going to be difficult today....a risk off day for the MMs plus no overlap with the US.

But for long term investors there is much to look forward to

2019 will start to prove fruquintinib sales potential....will be interesting to see the forecasts with the FY and HY updates the pricing per case and volume.....

By 2021 this company will have evolved from a distributor with R&D potential to an integrated Pharma co....

Unbelievable price paid by GSK for Tesaro today......

Tesaro lost 466m USD in last 9m, and had 64m sales....it’s pipeline does not look as advanced as HCM

What is HCM worth on a comparable basis?

It was the up move that was crazy......ahead of news.....was obviously guesswork with hindsight.
.but as Davey says more news ahead hopefully some positive news to come...

Atleast HCM has a portfolio of trials and is not a one trick pony (eg farn / imm ) where one bad piece of news is a wipeout.....

Disappointing but not disasterous. Remember AZN had a failure but that has come good as the study has evolved.....from my reading the results were better than placebo....let’s see what the results are like in another 12 months as the PFS plays out....as CEO says these are pt that have failed 2 rounds of treatment already so a v difficult group to treat with advanced disease.

No one expects every trial to be successful....this is a long term play, the traders are likely to get burnt by the sudden price movements.

Q what liability will sms have to replace dumbmeters with SMETS2 versions?
If none the installation gravy train can roll on.....if a lot then recapitalisation may be needed.

Q if you hold Pru today what do you intend to do when you have one MGPru and one PruInt’l share?

If you don’t want to hold both does that mean you will sell Pru and then buy back the bit you want post separation?

Does anyone know How OML shareholders behaved when they split in June?

Like this co a lot.
Pharma portfolio is diversified. Strong parental backing from CKHH means it takes a long term view and is unlikely to face a funding crisis and significant SH dilution Unlike smaller cos.
CKHH has yet to make it a core division so it could be sold, but only at a top price.. so relatively safe to hold and keep adding until CKHH sells.
Not sure there will be a bump with New drug approval. High Hopes will be replaced by pricing and distribution worries/ issues. I expect the market may wait and see the revenues build before increasing the sp.
One for long term holders to add to regularly.