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Yeah, I was just triple checking that; the minute I say it's quiet, an absolute monster goes through. Was just trying to figure out if it's a buy or sell. I agree, pretty sure it's a buy at that price. Everything seems to be showing as a sale today for some reason.
Yeah, I'm surprised how quiet it is today; they probably won't announce the TT, but they may, which would be good, and since there's already POs, they may announce it together with volumes.
I suppose people are waiting for the FDA completion, but (from the Vatic website): "The KnowNow test has been CE marked for professional use in a healthcare setting and has been registered for use in the UK and the EU." so sales aren't dependent on the US, ... as soon as the TT is completed, they could be going into production for those other markets.
Hmmm. One new MoU with the similarly suffering company across the business park .... nice to have something but very much kicking the hope can down the road. Single digit percentage licensing fee suggests it won't be huge (but everything counts, and it sounds like a worthy set of projects (life's not just about earning a few more £, do some good too!). Vatic MoU just reiterates what we knew but adds names to some of the projects. A bit worrying that there's no KnowNow timescales, or volumes indicated.... makes it hard to believe that we're just a couple of weeks away from selling product (post FDA EUA).
One point that people may've missed: different test = assessment regime. That carries a time risk, either adjusting the test regime (for a test which isn't assessed like the others), or (as anybody who's tried to put a non-standard case through a standardisation authority will recognise) a period of 'mistakes, clarification, learning and adjustment' with getting the application through. This has been my concern with the timelines for a while, and I don't see any comfort with today's announcements and absence of timelines.
'main impact on margin being labour under-recoveries with the changing cost base of the business on lower turnover' Another concern; large unproductive facilities/capacity = accelerated cash burn. Not comforting with indefinite timelines.
My view: no surprises, no definite news good or bad, hopeful talk about the future but little concrete. Hope has already been stretched, now being stretched longer; so over all, slightly negative. What do you think, kind reader?
Good news about the TT being charged, thanks.
(For other readers, this was raised on another thread)
Totally agree about the potential benefit of the Vatic test’s tolerability in the more vulnerable groups - and would add that they will probably be the longest tail consumers into the future, and not a small group either.
Is there any reason to think there might be surprise good news? Genuine question.
One thing that might be surprise bad news to some posters; I don’t think companies pay fees for TT, so Avacta (which is almost certainly abandoned) is an unfortunate loss. (Correct me if I’m wrong about TT payments - another genuine question).
HD2U as I’ve said before, I enjoy and applaud your posts and positivity. Respectfully, I think you lean on generalities a bit too much (total covid cases, gov policy etc.) - I’m not trying to apply any logic to everything (Apple etc are hardly like for like) only this specific case; is ABDX’s capital investment productive? I guess we’ll get clarity on the recent history and outlook for that next week.
I find it hard to get behind the statement “it doesn’t matter when you come to market.” — Covid related things are very timely, even as I agree that there’s going to be a multi-year future (albeit at a significantly finessed scale/use case).
DaProphet, if you’re replying to me; I agree with newer better technology - if you mean the Vatic product? Fingers crossed. If you mean the manufacturing capacity at ABDX; it’s only good in so far as it can deliver higher quality (market seems satisfied with current quality for covid tests) at better prices (don’t know, hopefully). I don’t think we’re going see any Covid players switching manufacturers at this stage, and if there were new entrants then we’d probably know about them (like Vatic).
The upgraded manufacturing tech and capacity means potential for the future, but until that machinery is productive, it means cash burn. ‘Biggest manufacturer in Europe’ etc. is a double-edged sword; most win capacity, but if unproductive, high(est?) cash burn.
“It only takes another series variant and it rockets!”
I think we’re passed the wild speculation stage of assuming that need = future sales. Reality has shaken out those who can get a product to market and sold, and those who can’t/haven’t. Greater demand is most likely to mean larger orders to existing suppliers, not new supply chains being established with new parties. Why would you go through that risk and work? Three answers; existing suppliers can’t ramp up to meet demand (unlikely), new entrant is cheaper (unlikely to undercut established and profitable Chinese mass-producers), or new entrant is better/different (and that’s the hope and Vatic bet).
Maybe ?? it’s just the cynicism of the burnt, but those tweets don’t look positive to me, they look desperate; nothing much going on, some old stock that no one wants being flogged one at a time, or used up internally, and hey don’t forget that we make non-covid products that no one wants too! Why isn’t the Vatic product (directly or indirectly) being hyped? And why so many uncoordinated tweets all at once?
Yeah, I know: “Well what do you want them to do? Be silent?”. You get yourself to a point where you’re damned if you do, damned if you don’t. I guess I’d like some teasing about the big news due at the end of the month - the lack of that, I read as preparing the way for disappointment. I’m already sceptical about the timelines (DYOR), and there’s nothing here to reassure. I’d hoped this would be a rising FOMO week, instead it’s been apathy at best, but looks more like collective skepticism - again, the burnt. For what it’s worth; I think this will touch single digits again before any big jump, and that that jump will be much more muted than people hope.
I guess my original point is that many of these stores are more than just retail. Many commercial services are subsidised in rural areas (Stagecoach buses for example) by government / local authorities. Additionally, I bet that as the banks closed rural branches, they had to offer some guarantee (to that there would be a continuity in services - off loading that to concessions in connivence stores (quick search yielded this https://commonslibrary.parliament.uk/research-briefings/cbp-9453/). Same for The Post Office, which is after all state owned - I'd bet there's some mandate that those services can't be withdrawn as simply as dropping the hard commercial axe. I agree that (almost) no retail is too important to fail, but the additional services these premises house probably come under some kind of existing protection, or would at least attract political intervention to ensure their continuity. I view these premises as a hub of retail and services both 'community' and commercial (ie Amazon delivery/returns) -- the issue isn't only about McColls 'caring' about the 'community they serve', it's the other stakeholders involved. The solution would seem to de to split the portfolio; the commercially viable branches in one group, subsidised in another, with a common logistics and management operation serving both.
Apologies if this has been discussed before; isn't there a sense that (some) of these stores are too important to communities to fail? In my local village, it's the only place providing banking and post office services (pensions etc) for about 8 miles. Is there a chance of government or other intervention? Or that the branches deemed to be providing 'essential services' might be split off by a white knight?
For those not familiar with medical device registrations; a US FDA registration unlocks, or significantly accelerates, registration in many other territories too. Poorer countries often just mirror the FDA with a local rubber-stamp (they don't have the means or need to evaluate independently) and even the poorest country has wealthy elites and critical infrastructure looking for the best solutions (as opposed to minimum-price-lead testing for the masses) . Look beyond the US and EU.... this is going to unlock a lot of markets.
Governments aren't the only customers, especially with a 'back to work' test. This test should open a new private sector market (companies and organisations protecting their productivity), and is aimed at the next phase of the Covid story with the whole 'new normal' and 'living with Covid' thing. If you read up on it, it's a new class of product in this crowded space. In the case of governments and public sector, it also represents a new way of gatekeeping and ensuring continuity of service (healthcare, military, etc.) and is more suitable for people who can't/struggle to tolerate the current tests (disabled, elderly, sick) and so could open new doors there too. Exciting times ahead for Abdx and for us this week...
Since I’m on a cautionary soapbox, 2 other points which bother me with what I read on these boards:
DHSC payment - it’s a one-off windfall. Valuable for extending the horizon to find real business, but it’s not on-going turnover and as such doesn’t prove the business model or ensure future revenues, and so shouldn’t move the share price as much as people seem to think.
Leading to the second point; these mcap vs cash on hand + DHSC (jeopardised) invoices owing estimates leave out the consideration of liabilities and debts owing. I don’t know abdx’s capitalisation structure and liabilities but the modelling thrown around here is too simplistic.
We need sales, turnover, profit, and cash flow if we want to see positive price movement, not just runway extension.
@HD2U, you are a valuable contributor on these boards and I greatly respect that, but a little reality check is needed on those numbers in case it misleads others. ‘Cheap Chinese’ tests are available in bulk wholesale at $1 a piece, I’d estimate 70-90c /ppc from OEM for 1m pcs white label pre-shipping. DYOR but don’t look at single piece European high street retail prices for your manufacturing baseline. abdx needs to in the multi-million /pcm volume game to be viable…. So compare like with like; millions wholesale on the global stage.
Footnote to that; if Vatic or others have a product which is genuinely a different offering, and that offering fits the market, then a different price point may be possible, but the ‘Cheap Tests’ will provide price resistance, so the offering will have to be truly compelling.