Member Info for JES1889

Well worth 40 minutes of any investors time.

The feeling I’m left with is that AVCT has a ‘tiger by the tail’ here and are holding on for dear life for as long as they can.

They seem to be extremely confident that 6000 (and 6103), and by definition anything that follows using the Precision method of action will work. Of course it will take time to continue to develop the data to support this. A key difference to 2+ years ago is that with RH we can now access the funding on attractive terms to allow that data to mature and maximise value. I believe that we will be dealing when we want and on our terms.

As an aside, I’ve just used ChatGPT to look at the presentation today and consider the TAM for Precision enabled chemo. Some key drivers / stats……

Roughly 20m new cancer cases per annum globally

50-60% treated with chemo

90% of those express FAP

Current addressable patients c11m per annum

Fully developed platform TAM could exceed $500bn per annum (using $50k per patient per annum, range $25k to $100k) / risk adjusted TAM IS $20-50bn in next 10 years. I think this is conservative given the lifting of the lifetime limit on 6000 as it is possible some patients will remain on treatment longer than 12 months.

Irrespective of multiples used, and the scientific process risk and data still to work through the £350m market cap does feel incredibly low to me.

I’d imagine there’s a few of the placing shares still trickling through. With the news flow coming it was a high probability to be able to turn some of those at 10-20% return in short order.

On the maybe naive assumption that a share price movement is a function of supply and demand i think it's important to remember that close to 16m shares were admitted to the market only 14 days ago. Bought at 63p. For a circa 30% return i'd imagine a few have banked some profits. There have been quite a few 100,000+ share sales over the last couple of weeks. I actually see that as having been a bit of a brake on the price. It has actually been quite hard to buy today, i tried 4 times on HL and had to lower my amount to eventually get some more a couple of hours ago.

I think the other piece to consider here is that Avacta no longer seems to be a leaky ship.

I now believe that (if and) when news drops it’ll arrive without forewarning, like the FDA news this week. Whilst I see there being room for the share price to appreciate as this year progresses, on retail demand/expectations. I doubt that even positive data releases on TNBC and 6103 will see this head anywhere near true value. AIM and the UK investment community just find the scale too hard to contemplate.

I’ve seen comments about the current low share price and suggesting that potential bidders would start buying shares in the open market. There’s no way that any party under NDA would be able to do that as they’d be party to inside information and that would be covered by the Market Abuse Regulations. The NDA would almost certainly have some form of standstill clause prohibiting open market share purchases.

I think the big news when it comes will come out of the blue.

I certainly fit your description of LTH's HC. As painful as the last 18 months or so have been in terms of share price, there is no way i'd have been holding the number of shares (or the % of the company after the dilutions) that i am now without it playing out this way.

Feeling more confident than i ever have that this amazing science will have the opportunity to enrich the lives of all stakeholders. The transformation in the quality of the communication and the composition of the board has been the real difference for me. The strategic thinking also seems to have far greater clarity and be targeting a far greater prize (price), i think the Tempus collaboration has been a massive influence here.

I wonder if some of the selling could be coming from AS and TG exercising the share options that they held when they both left, which had to be exercised within 12 months of their respective separation dates (Annual Report 2024 page 54), and selling a chunk to cover their immediate tax liabilities. They held over 7 million options between them with the vast majority being 'in-the-money'. I'm not sure if we ever found out the actual separation dates which are quite possibly different from when their departures were announced so this could be happening now.

The ongoing funding need, and the impact on negotiating position was something that used to be a worry for me.

I sleep much easier now following the two NXD appointments.

I envisage the chat with big pharma along the following lines…

CC - only big $ deals will be considered

BP - we know but you’re low on cash so you’ll dance to our tune sunshine

CC - please come over here RH….. can you tell this joker to do one!!

BP - I didn't really mean it, please can we talk some more?

CC - goodbye….. next!!

Great RNS today. As many have said this removes the short term pressure on cash and will allow the upcoming data updates, including ESMO, to be read and digested without the background noise of “what about the funding”?

I also feel that this is a (not so gentle) warning to would be commercial partners, demonstrating that now with RH on board we are not the same Avacta team as before and we are not desperate for cash. You want to deal with us then you better show us the big money!

Wyn - I'm sure that you know that the auditor does indeed have a special statutory right to be provided with any relevant evidence to support the directors assertion that the accounts should be prepared on the basis that the business will continue as a going concern. That would off course include the scenario that i outlined.

I'm sure that you also know that it would be insider trading for the BG fund investment team to be party to that information before the market.

Given the time in role for SB, and “how busy he has been” together with the scientific progress over the last 12 months it is entirely possible that Avacta does have a deal (or deals) on the table right now. It’s also entirely possible that these deals are executable in Avacta’s control. It’s also entirely possible that these deals don’t represent the value that our BoD believe will be achievable when further trial progress is achieved. Hence we’ve not proceeded with any yet.

Now if that we’re the case, they probably couldn’t tell us due to NDA’s, they would probably satisfy the auditors (if execution is in our control) and they would then be in a position to present us the audited preliminary results in 7 days time.

We’re all in the realms of guessing, but we do know that Avacta is a lot less leaky these days. We also know that the volumes have been low and that any HC selling has been limited. It doesn’t (yet) feel the same as last year.

A couple of questions linked to the funding conundrum:

1 - do we think the FDA would have allowed Avacta to begin P1b without certainty that the funding was in place to complete that phase of the trial? I'd assume that the tail end of the trial (like previous phases) involves the ongoing treatment for patients who have not reached the maximum lifetime dose, so potentially into Q1 next year and maybe beyond.

2 - can Avacta release their preliminary results next week if they don't have certainty of a standard going concern opinion from their auditors without mentioning that? I'm assuming that we need funds in place out to the date the accounts are signed off plus 12 months.

To add to some of the comments about dilution, on balance i'm in the camp of preferring dilution over striking a hasty suboptimal commercial deal. I do however understand, and agree, that a narrow commercial deal (STS?) could provide 3P validation which might provide a significant boost to the SP.

My own opinion….they know what they’ve got, they know what it’s worth and they will hold on and maximise value. I don’t think CC has any intention of playing the game of massaging AIM PI’s other than keeping us reasonably up to date on the science. The reality is that until financing / commercialisation is done the share price will stay subdued until it isn’t. Nobody is going to hold your hand, give you a step by step commentary on commercialisation (other than the strong guides already given via the latest research notes). It’s time to rely on your research whilst remembering this is still an equity risk.

If my view is correct then dilutions will be irrelevant. Somebody posted the other day, raise another £100m dilute everyone by 50% and keep control. I’d be fine with that and would stump up my share, i appreciate not everyone can/will.

The next month with posters and accounts could be fun!

Whilst I appreciate the pain being inflicted as a result of the quarterly CLN repayments i think that those that have been here a long time, and truly have at least in part an altruistic desire to see the science of Avacta succeed and improve patient outcomes, probably appreciate that without the history of the company from 2020 to 2023 (yes, COVID, LFT, Launch, Coris, CLN and all and importantly a much higher share price) that we would have been very unlikely to have been in a position to raise the equity capital (at the prices it was raised) required to get the Tx business to where it is today.

Yes, plenty of mistakes along the way and some poor comms to say the least, especially with hindsight but without some of that 'painful' history i doubt we'd be anywhere near where we are today in terms of the Tx science.

It's been a long and bumpy journey, fingers crossed we're coming around the final bend.....

In amongst the debate here there’s a point that I’ve not seen raised….

CC has 3.6 million share options at 72p. She had been on board for some time when those were allocated so would have been well aware of any commercial propositions to date. I’d like to think that those discussions (almost 9 months ago) gave her confidence that they would be a valuable part of her package. I accept that these haven’t cost her a penny (to be awarded) but if she thought they weren’t likely to be in the money then perhaps she would have waited before agreeing an options package.

I think increasingly auditors take a pretty risk averse view on this.

Cash - OK, near term contracted cash - OK, surplus assets that are not needed for continuation of business and can readily and with certainty be converted to a known cash value - OK, anything else - not so much!

I'd be surprised if one of 3 to 5 (and maybe 6) on that list doesn't happen before the accounts are signed off.

So, we've been guided that the 2024 financial results are expected to be finalised during May, which is later than recent years which have been in April. We've been told that the cash runway extends to Q1 2026 so it won't be 12 months from the date the accounts are signed which means that as things stand the runway isn't long enough to support a going concern opinion and basis of preparation.

Therefore between now and the end of May (latest) something needs to happen to bring additional cash resources into the company. There may be as little as one months runway extension needed, assuming existing Q1 runway is end March and accounts signed start May. Taking those assumptions to the other extremes then the longest extra cash runway needed could be five months more cash.

The possibilities are:

1 - Coris Sale

2 - Income from our existing partnerships

3 - equity raise (II placement and/or retail offer), remain on AIM only

4 - equity raise (II placement and/or retail offer) as part of NASDAQ listing

5 - new commercial partnership with upfront cash

Whilst 1 may happen, i'd be surprised if that provided enough cash.

We've had very little information on 2 in recent times so it's hard to see anything material there.

That would leave 3, 4 and 5 as the most likely and one (or more) of those needs to happen in the next 6 weeks.

I'd be surprised and disappointed if it was option 3 alone unless it involved a noteworthy (probably) US based II. There would certainly need to be some very good news to accompany this route. I'm keeping a little dry powder for this eventuality.

Options 4 and 5 have been trailed now for a long time, so long that although most expect them to come at some point it's hard to feel confident as to when.

Personally i'm hopeful that the recent relative radio silence, the changes to board composition, the continued scientific progress and especially the later reporting of the 2024 results (after AACR) mean that there's something positive brewing.

For what it's worth i'm guessing 1 and 5 (STS deal). I hope the board remain focussed on the bigger potential prize longer term.

LOL Halva, if only!

Wyn, i don't recall AS saying MTD was not expected, nor do i think the results were ambiguous. As for the share price, i'm sure most people would feel more comfortable with it being higher, others have probably enjoyed increasing their holding at low prices. The main impact of the low share price in the short term has been increased dilution on the CLN 'payments'. In reality this will lead to people holding a bit less of the pie, same as if more equity funding is required before a commercial deal is struck.

We're told the science works and the evidence supports this, if the TAM's are as big as seems likely, with wider applications being trailed over time then the pie is going to be nice and large, plenty to go around.

As for the SP reflecting the opportunity, I certainly have no confidence that UK PI's or II's have the ability to risk assess this properly. We know there is a paucity of talent in UK II's in the biotech space.

For me it boils down to two simple questions:

(1) do you think this has the potential to be huge? If so then dilution is not going to stop the return from today from also being huge; and

(2) do you know when an event is going to happen to cause the share price to escalate/rerate from here? My take is that trying to get on the train when this starts to rise is likely to have a more detrimental impact on your long term returns than some more dilution from here.

The difference in approach is down to opinions and that's what creates the opportunities. Most people (I think) will be expecting the CLN to be paid in shares next month and see that as an opportunity to buy lower, but what if the company already know that a deal is ready to be inked and pay the CLN in cash? Or what is PL have a home for those shares already? None of us know!

I don't mind the debate and wish all genuine commentators good luck. The only think i dislike on here is people changing their view based on their trading positions and trying to influence sentiment.

Wyn, you talk of 'missed deadlines' and yes Phase 1a took longer than expected BUT not because of missed deadlines per se, simply they were not able to dose high enough quickly enough to find the MTD so they kept going through more phases than anyone ever envisaged. More a case of everyone being increasingly stunned by how tolerable PRE¦cision enabled Dox was. Those 'missed deadlines' were part of the journey to the learning the massive market potential we now have. I see that as a good thing! You paint it negatively, i'm rather pleased we had those delays. Although 'delays' take time and yes more money i'll take a few more yet to get to the big pot of gold.

Whether a commercial deal lands tomorrow or 18 months time i'm trusting the board to get it right. Since coming in CC seems to be playing her hand quite well. Only time will tell.

One thing I’ve learnt over the last decade investing part of my portfolio in AIM is be careful not to be swept along by opinions (or trading position) of others on here. Largely a lurker on here these days but days like today bring out the binary opinions. Sentiment definitely offers a great chance for short term gains but be careful throwing the kitchen sink at something without DYOR.

I still have a large holding here, not as large as before the war, and have made good returns as an investor rather than trader, I’ve also lost a much larger paper profit from the 40p spike of late 2020.

Based on where EUA was prior to the war when the price was mostly between 20p and 30p, the Rosgeo JV in place, metals prices high and struggling to complete a deal and then compare this to today and the huge challenges in international trade and ongoing global instability then it seems unrealistic to see this heading to those levels just yet. I suspect this will remain a traders paradise for a while yet.

Good luck to all holders!