The latest Investing Matters Podcast episode featuring Jeremy Skillington, CEO of Poolbeg Pharma has just been released. Listen here.
Thanks for the messages of support gents. I actually really enjoyed the debate despite the level vitriol that came out (I could just imagine rxdav frothing at the mouth to the point of convulsion but couldn't contribute to the debate - haha brilliant!). Over 40 reccs to call someone a **** but only a handful of people joined the debate. Assuming those handful up ticked that means there's at least 35 pussies happy to criticise but had nothing to add.
Fair play to everyone who has joined in with intellectual debate. That's the whole purpose of the board of course and the challenges made me think so I feel more informed as a result, thanks. "Tom the bomb" has been banding around the 8.9 times multiplier as gospel for months but when he realised it's BS, not only did he not discuss, he deleted his LSE account! Whilst I don't agree with Rah and vice versa, at least he backs up his posts so fair play.
Ok digitalman I shouldn't have lowered myself to their standards but I have been given a bit of grief today on here.
Nothing has changed since last year and I've added regularly (again happy to prove to anyone but no takers). My value is 70% higher than our paid professional analysts and that is being classed as deramping, strangely. TD have used assumptions that result in a lower valuation.
All the assumptions I made were sourced and links shared.
What do you think we should be using and why?
Dox market size
When AVA6000 will hit the market
Market penetration and period over which peak sales will be reached
Licence or go it alone. If licence the royalty percentage, upfront and milestones payments.
If we go it alone, how many additional shares would need be issued
The COS
Discount rate
Sure PL but changing the COS would assume there was zero development risk from this point onwards. I used 16% due to the following -
“Taxation and working capital costs also need to be factored in. Investors should expect operating and capital costs to represent no less than 30% of the drug's royalty-based sales.”
“A drug approved for Phase I clinical trials has a 10.4% likelihood of eventually reaching FDA approval. If the drug moves to Phase II trials, the likelihood of approval rises to 16.2%”
As P1B is now a pseudo P2, I assumed 16.2% even though P1B of course hasn't started yet (as far as we know). I also assumed the minimum 30% costs.
Presumably you think a higher COS? Not unreasonable of course given Dox has been around for decades. There isn't a 100% COS though.
Absolutely PL. If you double the market size and assume we achieve 100% market share, you get to a current fair value for AVA6000 of 48p per share
Year Revenue Revenue - 30% costs Cashflow assuming 16.2% chance of approval Discounted cash flow assuming 6.5% rate and 2026 approval
2026 $80,000,000.00 $56,000,000.00 $9,072,000.00 $7,510,246.96
2027 $160,000,000.00 $112,000,000.00 $18,144,000.00 $14,103,750.16
2028 $240,000,000.00 $168,000,000.00 $27,216,000.00 $19,864,436.85
2029 $320,000,000.00 $224,000,000.00 $36,288,000.00 $24,869,404.50
2030 $400,000,000.00 $280,000,000.00 $45,360,000.00 $29,189,441.90
2031 $198,340,000.00 $138,838,000.00 $22,491,756.00 $13,590,220.44
2032 $198,340,000.00 $138,838,000.00 $22,491,756.00 $12,760,770.37
2033 $198,340,000.00 $138,838,000.00 $22,491,756.00 $11,981,944.01
2034 $198,340,000.00 $138,838,000.00 $22,491,756.00 $11,250,651.65
2035 $198,340,000.00 $138,838,000.00 $22,491,756.00 $10,563,992.16
$155,684,859.00
$0.57
£0.48
My calculation used DCF, TD used rNVP. So now you're saying that TD, our paid, FCA regulated, industry professional analysts know less than........you? You should probably read your posts back before replying.
This morning people were falling over themselves to criticise my calculations, saying I had made various incorrect assumptions. I (an industry professional who works for an asset management firm) then make the offer to run you your very own set of calculations free of charge on any assumptions you like and the same people have nothing to say.
Absolutely GMCC, only patience is required.
DTW, what are you scared of? If you're not interested don't read the thread, it's really simple. I think you know that TD know what they're talking about, my calculations stack up and you can't give any reasonable assumptions that will derive at a figure you want. People called me out, I do it back and you have nothing to say. Clowns
Thanks for the considered input. Still nobody has answered the question why me attributing a current fair value for Avacta of over 4.5 times today's SP is de-ramping? It obviously isn't.
I was asked to provide calculations so I did.
Was challenged and answered all queries.
Was accused of not holding so offered to show on twitter - silence
Sent challenges back - silence
Says it all
Here's an offer for you - send me the assumptions you want to use to derive a fair value for AVA6000 and some reasoning and I'll do the calculation for you. It will literally take me a minute. I just need the following
Dox market size
When AVA6000 will hit the market
Market penetration and period over which peak sales will be reached
Licence or go it alone. If licence the royalty percentage, upfront and milestones payments.
If we go it alone, how many additional shares would need be issued
The COS
Discount rate
Can't say fairer than that
Unsure why you started a new thread golf nut but of course you’re more than welcome to disagree with the assumptions used- that’s what makes a market. They are all independently evidenced though.
Anyone care to answer my questions in the other thread?
Really unsure what the issue is to be honest. The value I calculated with all components independently evidenced is a 70% premium to our paid analyst’s valuation and that’s deramping? 39 vs 23p. Go on TD’s website- we are their client and it’s not as if they’ve been sacked and replaced by avacta since producing their various reports so presumably avacta aren’t unhappy with them? It’s becoming very clear from the replies that very few people have done any of their own research.
Apply the same factor to their valuation of both platforms and DX and my valuation would be 459p. Over 3 x todays SP and again, that’s deramping?
Ever wonder why these self confessed traders are spending all day every day posting SP predictions of many multiples of the current SP? Are they your friends looking out for you? Are they sad ****s who want reccs on lse and likes on twitter? Or are they trading the pumps?
People have questioned if I hold. I’ve offered to show my holding on twitter and no takers. Can’t do anymore so if you want to be taken for mugs, keep believing the trader pricks who are extracting the urine out of you
Last post you’ll be delighted to know as out with clients for lunch.
Digital man- the TD value does factor in the value of both platforms and the DX division.
Really unsure what the issue is to be honest. The value I calculated with all components independently evidenced is a 70% premium to our paid analyst’s valuation and that’s deramping? 39 vs 23p. Go on TD’s website- we are their client and it’s not as if they’ve been sacked and replaced by avacta since producing their various reports so presumably avacta aren’t unhappy with them? It’s becoming very clear from the replies that very few people have done any of their own research.
Apply the same factor to their valuation of both platforms and DX and my valuation would be 459p. Over 3 x todays SP and again, that’s deramping?
Ever wonder why these self confessed traders are spending all day every day posting SP predictions of many multiples of the current SP? Are they your friends looking out for you? Are they sad ****s who want reccs on lse and likes on twitter? Or are they trading the pumps?
People have questioned if I hold. I’ve offered to show my holding on twitter and no takers. Can’t do anymore so if you want to be taken for mugs, keep believing the trader pricks who are extracting the urine out of you
You've got to love the replies from those who can't be bothered to read the post / don't have the capacity to understand. Do you really think biotech valuation is 8.9 x potential revenue, not taking into account risk, cost of capital, timeframe to reach those revenues and costs of achieving those revenues with some random COS applied? If you do, I've got some magic beans to sell you
There's another biotech that could displace the immunotherapy market. The immunotherapy market will be $274bn in 2025. Apply 20% COS and the MCAP should be $54.8bn. Current MCAP <$100m. You can see the issue here?
haha got to love this board. People explain, providing evidence why we aren't trading at multiples of the current SP and get attacked (me today, SB the other day etc.)
OAMOT, that's why I used a higher COS for P2 rather than p1. TD apply value to the rest of the pipeline and that's how they arrive at their 270p valuation.
You can't just look at a potential market, assume we conquer 100% of it over night and not factor in the costs and risks associated with getting there. You also need to factor in the cost of capital.
I'm obviously not here to achieve 270p per share but that is "fair value" today factoring in industry standard assumptions.
Mr R / Doh- I think you know that I'm invested. c.200k for the immense potential of this company. Happy to send you screen shots on Twitter
Using rNPV (industry standard) and DCF you can't get to 371p PL75 without assuming AVA6000 also simultaneously stops the ageing process.
TD's valuation is significantly higher than our current SP, factoring in AVA6000, both platforms and DX. My calculations are valuing AVA6000 only and arrive at a similar value to TD.
So I and other reasonable posters disagree with others valuation during discussion, get asked for their valuations, which are subsequently provided and now some don't like that either. Happy to discuss any elements of the calculations.
TD (our paid analysts) attribute a value of 23p to AVA6000 and my calculations attribute a much higher value but people think that's deramping?