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Only 38% on the first count. At the moment no shares acquired.
There must be plenty seeking an uplift in the offer which the rules do allow for - with take over panel approval (not sure why it would be refused?). Another 5 weeks before the final deadline for declaring the bid unconditional. This is where the advisors have to earn their money by assessing whether raising the bid will get it over the line - plenty of hedge funds who just want an extra few %.
Exactly petro…..this company needs cash almost immediately….it cant borrow cash…it has issued convertible debt but it did not secure its future when it was valued around £1bn, it then fell 99% as cash calls became increasingly expensive.
Most BIOs would want 24m cash in the bank and not go under 12m….this is into the low single digit of months cash on hand….my guess is it needs $100m which is a very significant dilution…it may eventually be very valuable.
One of these:
1 The company goes into Chapter 11 when it runs out of cash (default option)
2 A takeover/sale of the business
3 A funding deal (partnership with upfront funding), or dilutive share issue sustains the business
3a - the company then limps on until it fails
3b - the company eventually makes a commercial return
The HK market is closed for 2 days….should be lower volume trades on AIM and NASDAQ, but unlikely to be positive until HK reopens.
There seem to be hopes for a partial recovery in the wider market this year….but that will not be evenly spread….hopefully Takeda will make a lot of sales in the developed markets this year and pay $$$ royalties
I just see this being range bound for a while…..buy below 100, sell at 110. (Obviously NFG will set these bounds lower - each top their own).
The bid is unconditional if/when they get 50%. I think they only pay for the shares if they get there, otherwise the bid could fail…
Once they have 50% they can force a purchase of all shares if they get to a critical mass 90%, but they are not likely to do unless there is a change of heart at the dissenting PE investor and founders that hold 17%…..they can delist once they get to 75% which is likely which will mean it is difficult to sell the shares (more expensive broker fees included).
There are two dates listed for the tender offer, the first is 15 Feb and the second is 24 March.
While I would welcome a higher offer, I dont think one is going to happen, I dont want to hold an unlisted security (it is not permitted in an ISA so that may be another reason to sell).
On the basis that this deal is likely to be the only one available in the medium term and so would like a bid to succeed, I have tendered my holdings via HL which has a deadline of noon on Monday 12th to register acceptance of the offer.
My view would be to definitely accept the offer by 24 March, if it is proceeding.
A good day for once…clearly the forward looking statements are driving this…..
Blooomberg was saying that the interest cuts coming may lead to some dollar weakness which is historically positive for EMs.
FY 31/3/24 - reporting on 9 May may comment on Q1 sales of Fruq
Q1 sales 31 July. (Links to HCM H1 royalty revenues)
Q2 sales 30 October (should show continuing take up in US)
Likely to be our earliest sight of HCM revenue (NB not product sales but royalties and manufacturing fees)
Seems to be $44m US…which is flat on the 22m achieved in H1.
Volume is up so HCM manufacturing fee gives a greater share of revenue to HCM.
Looks like HCM will consolidate $30m
Expecting HCM product revenue to exceed 160m, but not by much, 170m would be a good result…..may get to 200m in 2024 if Elunate GC and Sovlep are launched mid year, Hence they will still be burning cash reserves 24/25.
A 5% buy back would cost around HK$1bn or £100m/ $130m.
I just dont see the Board doing it on current revenue visibility - there is too much uncertainty to be sure of being cash positive from drug sales. Of course if they land an international partner for Sovlep, then a large upfront payment may change the picture somewhat.
As for M&A, CKHH will need to be persuaded of the merits….a deep pocketed Western pharma can easily afford HCM even with a 100% premium….local offers may be more share based with lower premium…there are significant cost savings to be realised with overlapping programs with Innovent / Beigene etc but we dont know whether there are change of control terms in the licenced products that could strip product value out of any deal…it is complicated when potential M&A partners have competing licensing arrangements..
Mr To is CKHH’s man…..he will get his orders…..difficult for the Board to do anything that CKHH does not want.
HCM itself is too small and not yet listed in the mainland so will not be on the radar of the chinese financial market regulator…..the same cannot be said for China legacy pharma, esp those with CCP owners.
BTW when do you think HCM will be making sufficient profits to enable significant returns to Shareholders? I cant see this until 2026/27. The 2024 NDAs should lead to marketing approvals during 2025 and first full year of sales in 2026…..so that is my earliest timeframe for determining excess capital.
Currently around 3.5% of AUM……Jupiter has a similar sized book and is valued at 1.25%
Margin difference accounts for some of the above….but does this indicate ASHM is overvalued and Jup undervalued?
With the right incentives in place, owners and executives should be aiming to advance share prices…..when the regulator has to remind companies of this, there must be great concern about popular discontent in the CCP.
I don’t think the HCM board is in a position to declare it has excess assets to do a buy back yet..although that is quite a likely outcome in 2026/27…..but it might see short term opportunities to buy mainland operations…..the regulatory door would appear to be open to this…and if you dont pay much premium over the hard assets acquired there is limited risk..
Now we have some analysis of the Frutiga results, Takeda will need to decide whether to progress to a global study…..If they do, they will need to consider the design and end points, The PFS data looks strong, with OS harder to determine. From a patient perspective PFS may be just as significant as OS
how long it will take to hear their decision?
I am beginning to fear the worst for the Amdiz study….an NDA was suggested by end 23 but there has not even been news of the results….
They should tell us the bad as well as the good news….rather than just quietly dropping it into a pipeline update….it was prominent in last year’s milestones and there is no hiding from it.
Having said that, it could just be administrative delays….the Sovlep read out was given in (august/sept?) but missed the Y/E NDA target by a short time.
If even the Guardian can carry an article grudgingly supportive of the 3/Vod UK merger, then the prospects for the deal are looking up…..although it may not be approved for some time.
Italy allowed 3/Wind tie up but imposed conditions that have allowed Illiad to dominate the cheaper PAYG space as a MVNO….such that it thought it could acquire VOD Italia.
MVNOs are already 17% of the UK market….with some support of the MVNO market, the 3/Vod merger will probably get through. Although whether this should be celebrated by the 3 remaining network operators will be an open question.
What is the PI mood?
Take the money and accept by 15th? And be paid at the end of Feb?
Or see what happens on 15th and then sell?
I have 1000 shares which is a rounding error in the number of shares so I am tempted to take the cash now.
Selling before the dividend entitlement and buying back when ex-div converts the dividend income into capital gain (if xdiv is the only movement), so if this is a GIA transaction you may prefer to have the divi (if within annual allowance) or capital gain (which has a lower tax rate if outside the annual allowance). In an ISA/SIPP there is no tax effect so in theory there should not be much to be gained by selling around the XD date…….but these are volatile times….good luck,but I will be holding within ISA/SIPPs rather than trading.
The value of the 4 assets licensed to Inmagene is probably not counted towards their future profitability aim….the two assets (IMG 004 and 007) are shown on the Inmagene pipeline as entering Ph 2….the phase 1s ran from 2022-23. Still several years from a regular income stream for HCM