The latest Investing Matters Podcast episode featuring Jeremy Skillington, CEO of Poolbeg Pharma has just been released. Listen here.
@TWatcher,
The comments on twitter started on the 4th of Jan culminating to 2 rumour reports, both of which were quoted by members on this board. Am I right?
"I really don't get how something confirmed by odx in an RNs can repeatedly be called a "rumour""
Let me explain from the RNS:
"...there is no immediate need to raise additional capital..."
What does that means?
"no immediate need" = medium/long term.
The rumours spoke of imminent fund raise, they have been propagated from the **4th of January** on Twitter.
So if you provide us with the rumour report from the 11th of Jan and the subsequent one, then we can compare it to the RNS and figure out why the rumours were set in place prior to the RNS having to clarify?
Thanks Maximillian3,
We do now realise capacity is 2M a week and ODX can continue to use this for business expansion. Let's combine that with the FDA application and the recent CE mark for self-use and this is very positive news. The rumour report which has still not been made available if it can't be cross referenced between the RNS, then this would be the way forward. Otherwise this is still a rumour.
Right now we have a target price is 58p as a minimum based on the sum of parts valuation range of £105m - £155m.
@CaptainSwag and @TWatcher, I am still waiting on you to share your rumour report, so that we can cross reference it with the recent RNS from the company. As I mentioned to you, if you can't provide it, I will continue to assume it is a rumour. It's been > 4 weeks since these rumours circulated and still nothing.
I will let you ponder the nitty gritty for now. What we are certain of is that the capacity is now 2 million per week.
GL
@CaptainSwag yes they do say that, the exact phrasing used is:
"Given the uncertainty over timing of DHSC clearance for the professional COVID-19 test and CE-Marking for the self-test COVID-19 test, we leave forecasts and target price under review."
In fact they re-iterate the point again and state:
"Given the lack of forecasts, we leave our target price also under review. However, as we look to a post-pandemic FY 2022 and beyond, it is easy to see how a sum-of-the-parts valuation could substantially exceed the current market capitalisation of c.£73m."
That's where it get's interesting. What are the sum of parts that exceed the c. £73m, they state them to be:
- Food Intolerance business at c. £50-70m
- VISITECT CD4 (HIV testing) at c. £55-85m
A combined valuation range of £105m - £155m.
So as they said, although they can't give a target price for the entire company due to DHSC clearance, they do put a target on the rest of the company (Food Intolerance business + VISTECT CD4 business) at >£105m i.e. 58p/ share.
Fast forward to 2022 and we realise that the £105m - £155m valuation for ODX is also an undervaluation because it does not include the fact that ODX have received CE-mark approval for the covid-19 self-use antigen test that opens a c. 440 million target market.
That means that combined with the antigen testing, ODX would be valued well above the range of £105-£155m i.e. north the range would be above 58p-84p per share.
finnCap is well known in the financial community so not much for wolves to hang on to.
Turns out ODX have capacity for 2 million tests per week.
https://twitter.com/marik_investor/status/1490670541711286276
Amazing news when combined with ODX having received a CE-mark for the covid-19 self-use antigen test and a professional-use test application has been made already to the FDA and awaiting approval.
finnCap puts a target s.p. at 58-84p WITHOUT covid-19 testing business arm.
Yes very important, that's why the target of 57p - 84p per share was WITHOUT covid-19 predictions (which they were not able to forecast). The second quote is general policy applied to all their reports.
Since then we find out that the Government is allowing ODX to use Government Funded equipment to grow their business for future pandemic preparedness. ODX have a capacity of 2 million tests per week! i.e. >100 million tests a year. @ £3-7/test it equates to £300m-700m revenue.
After CE-mark for self-test approval, and FDA professional-use already applied for, the current market cap of <£20m is exceptional value for money for entry in to ODX at sub 12p.
The real report we should be reading is finnCap. Taking the covid tests out of the equation, finnCap puts the #ODX target price between 57p - 84p. After recent CE mark approval the professional-use FDA test is next on the list of approvals. Manufacturing capacity of 2.5m per month (potentially a lot more) and this is such an undervalued stock.
Agreed @Maximilian3. I agree. We now know that the company doesn't need to raise cash immediately and the rumour report is off target by >4 weeks, perhaps it was a ploy to drive the price down?
Balanced with the potential risk (similar to all stocks), I am reading the upside for ODX and feel that as a risk-reward proposition this is one of the most undervalued stocks on the market.
Taking the covid tests out of the equation, finnCap puts the #ODX target price between 57p - 84p. After recent CE mark approval the professional-use FDA test is next on the list of approvals. Manufacturing capacity of 2.5m per month (potentially a lot more) and this is such an undervalued stock.
GL
It does look very positive @Maximillian3. The fundraise rumour report sent some false jitters. Now that investors realise that the there is no immanency and that ODX have a substantial target price WITHOUT covid-19 priced in. i.e. 57p-84p, investors are piling back in. In perspective that's a 5x - 8x return on investment if the target hits. There aren't many companies where the share price is so far off the analysts target price.
The finnCap note was a valuation carried out by a reputable firm. My view is that it has been over looked and worth looking at the target price of 57-84p that they are putting on it. There doesn't seem to be an immediate need to raise money and large investors could be buying on the open market.
GL
The same finnCap that is putting the price tag > 57p per share. That is WITHOUT covid testing.
Target valuation WITHOUT covid-19 at £105m - £155m.
I'm waiting on this mythical imminent fundraise that has been > 4 weeks in the making.
The 25 Nov 2021 FinnCap note on ODX states that EXCLUDING covid-19 testing, that the valuation "... substantially exceed the current market capitalisation of c.£73m".
In fact they put a tag on:
- Food Intolerance business at c. £50-70m
- VISITECT CD4 (HIV testing) at c. £55-85m
A combined valuation range of £105m - £155m.
Also of significance, since 25 Nov there has been further advancement by ODX in the covid-19 market:
a) FDA professional-use application is in progress
b) CE-mark for self-test has been approved and opens the market for c440 million EU citizens
c) The COVID-19 antigen test detects Omicron at the same levels as Delta
Furthermore, ODX have a personal capacity to sell >2.5m tests per month.
The ODX current market cap is less than £20m, trading at huge discount compared to the valuation range of £105m - £155m. That is putting the price tag > 57p per share. That is WITHOUT covid testing.
Based on finnCap and the recent news on ODX covid-19 self-test CE-mark for HUA, I would expect the target share price to be much higher.
GLA
Looking at the following statement from the RNS (03/02/2022):
"We are very excited by the potential of AVA6000, and the pre|CISION platform more broadly, to deliver ground-breaking and affordable cancer treatments that have the potential to significantly improve patients' lives."
The positive nature of the results are expressed in three parts:
a. "AVA6000"
b. "pre|CISION platform more broadly"
c. "significantly improve patients' lives"
It is interesting to see the way it has been broken down i.e. AVA6000 function validates the the pre|CISION platform which significantly improves patients lives. Validation of point a) the potential of AVA6000, the dose escalation was a very positive step for which, some of the points I have shared. Point b), the pre|CISION platform opens up a strong pipeline of other pro-drugs. What is fantastic to hear is the positive note of Alastair's comments. i.e. c) it has the potential to significantly improve patient's lives.
The future for AVA6000 is very bright.
GLA
As so many retail shorters have misunderstood the basics of the company e.g. FDA EUA for professional-use vs FDA EUA for self-use, and they claim to be shorting as retail, does this looks like a short squeeze?
Whether a placing happens or not, the key point is that here is no evidence I've seen for imminent fund raise. The rumours started 4 weeks ago stated that it was happening immediately on a Friday. 4 weeks later, nothing.
"Personally I doubt that until the issue of the placing is resolved."
@BIGBangs, The rumour that the placing was imminent has not finalised despite it being four weeks later. In the meantime here is the RNS from ODX which states that there is nothing concrete at the moment:
"...there is no immediate need to raise additional capital..."
If anyone has any evidence to the contrary i.e. an imminent fundraise, please let everyone know. Otherwise, I'll take it as a rumour.