Member Info for Merchantbanker

Snowking - yes i am talking about gross profit not revenue.

The thing is BBI and Abingdon is they had nothing to lose by working with Avacta. They have been desperately trying to get other products on board to add to their portfolio and use up their capacity. You never want to rely on one product no matter how good it is. Omega achieved this early with Mologic thanks to Colin King. When negotiating something like the UK RTC contract, if you only have 1 product and are reliant on 1 customer it puts you in a weak position. If Avacta test fails they have spare capacity that can be offered up elsewhere.

Look at the Sona drop today. It shows the risk of being reliant on 1 product that is not yet approved. Omega have a hedged portfolio of lateral flow and lab antibody and Elisa tests for self and professional use. Our risk is being managed extremely well and arguably we have the best portfolio of products out there including the best antibody test in the world, the only triple antibody lateral flow tests, and soon one of the first lateral flow antigen test. The value of what Omega have is far beyond todays mcap.

Safy - "I have a question here, Mologic will CE mark test before TT to us, how are Avacta doing a TT to BBI without a CE? Answers from ODX holders only."

The TT on Avacta is from developer to lead manufacturer. Cytiva will not be manufacturing the test therefore cannot CE mark it. Part of CE marking is validating production lines. Mologic are developer and manufacturer therefore they will CE mark themselves.

I prefer to do my projections at a prudent level and then any upside is a bonus., I think yo can agree using £2 average the upside is substantial. If £2 happens to be more like £3 or £4 then amazing, but i'll use £2 until more concrete evidence.

Okehurst - I assume the following:

UK RTC £1 per test (Slightly ahead of Finncap guidance) for UK Gov sales, + profit share for non gov sales.
Visitect Antibody - £1.60-£2.00.
Visitect antigen £2.50-£3.
CD4 £2.50-£3.00

Will likely have a favourable weighting to the Antigen tests.

2.5m tests is worth around £260m gross profit at £2 per test. Per Finncap report peers are trading at around 9x earnings. Call it £200m net profit and use a prudent 5x earnings you get £1bn. Covid will have a good few years traction in revs, and CK is already planning to use the capacity going forward. This is not just about Covid this is a industrial shift in the UK diagnostics industry.

The guidelines for self test approval is that the device should be certified by a notified body as meeting the guidelines for an IDV for self test use. So the actual approval and CE marking for sale will be granted by the notified body CE or EC marking the product as confirmation of conformity with the guidelines. A notified body is an independent qualified person. For Mologic Antigen tests this is likely to come from Liverpool School of Tropical Medicine, for UK RTC it is Ulster. In normal circumstances the CE marking would enable the test to go on sale for self test. What happened with the Antibody tests is MHRA stepped in with a legislation override banning the sale of Antibody tests for self use on the basis that they were unhappy with the accuracy. It seems for some reason the government are not ready for us to have access to home use antibody tests until they are ready, which is why we are waiting on MHRA approval because of the legislation override currently banning such devices. The ban is on the manufacturer not the vendor, which is why the Visitect tests could be ordered by an individual and used because the manufacturer has geared the product for professional use and sold as such.

Once an Antigen test has received CE marking for self use, this can currently go on sale as such as the MHRA override only applied to antibody tests, unless of course they issue a similar ban. This is unlikely seeing as they are desperately trying to move this forward. So the interesting thing to look out for is, will Mologic CE mark for professional use first, or go straight for self test CE mark? Part of the requirements of CE marking for self use is live field trials, and we know that these have taken place in various settings, so i suspect they will go straight ahead with self test CE marking.

https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/404335/In_vitro_diagnostic_medical_devices_-_guidance_on_legislation.pdf

https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/377885/Guidance_for_notified_bodies_on_the_regulation_of_IVDs_for_self-testing.pdf

TBB - check out the Finncap report the day after placing.
Uk RTC £0.75-£1
Visitect antibody £1.60-£2
Visitect antigen £2.50-£3

2.5m tests A week at £2 average would be worth £260m gross profit a year.

Jaylarc then you must understand the difference in the commercials between making a visitetc branded test and making a test for someone else. It’s simple business and simple maths. You have 1m capacity, do you make 1m tests that make you £2 per test or do you make 1m tests that make you £1 per test?

After the presentation we had today it’s ridiculous to see comments of avacta excitement over Mologic’s antigen test moving forward saying that in fact it must be theirs despite the fact the company have just been discussing the process in the presentation! Sorry for being the bad guy and calling them out.

Yes that was my question regarding Dundee. A very astute commercial response although perhaps not as clear as it could have been. Basically he looked at a new site vs further expansion at Alva and worked out it was more cost effective, quicker and enabled better control if he expanded Alva. This is the kind of transparency we crave. Expects to complete plans on the next week or so and order the kit.

Sjpw no I wouldn’t say aggressive. I’m happy to have a debate on either stock I’ll talk about either for as much time as anyone wants and I’ll keep it respectful for as long as others return the same. I don’t believe these bbs are cults for those that only follow the most positive opinion. I’ll stick up for odx because that’s what the facts support in my opinion. Likewise I think my comments over there are not unjust (most of the time). Generally on this bb any negative view is combatted with a strong positive case with evidence and facts, over there it is simply met with abuse or “Sir Al” says this so were all good. Alternate views have their place on these bbs and They have always made me dig deeper into my research. I’d there’s a negative view I can’t respond to I look into it. If there’s something I havnt considered I’ll reassess my risk. I’ve learnt my lessons over the years which is why before odx I gave up posting on these bbs for a long time. Odx is the first time in a long time where I feel like getting involved.

Look I really hope both companies get a test to market for all our sakes. Sorry for biting earlier but I was called out and there were plenty of uncalled for comments on here regarding another stock.

I don’t believe the chance of success here is as high as the comments suggest. I do read this board with interest I try not to comment too much but so far there have been no new developments to change my opinion. I’ll do my best to refrain from commenting until there are further developments positive (hopefully) or negative. GL

My initial thoughts were it could be Burnet institute. He said it was development income. Burnett are developing a Covid test perhaps we have been involved.

Sjpw- not true everyone on AVCT board was taking great pleasure in odx having a bad day. Someone even called me out by name When bragging about it.

Sorry im not the main instigator, i am more than happy to keep my comments on both stocks specific to each stock, but if others aren't then i will have my say.
Sorry but the idea of producing tests for Avacta makes very poor commercial sense. When capacity is a limiting factor, why would you produce someone else's tests at say 30% margin when you can produce your own branded product at 60%? Sorry but linking ODX manufacturing capacity Avacta's test doesn't add up commercially. Especially when there is zero evidence that their test will ever reach commercialisation. If anyone that watched today's presentation thinks that Avacta is the key to our success you need to give up investing.

Bubba seriously do some research. Mologic will CE mark it first, they have their own manufacturing. We know ODX have to tech transfer before they CE mark it under Visitect brand

The live trials are part of validation. To CE mark the test it needs independent approval, likely from LSTM. This can be done very quickly once the appropriate performance measures are met

Mologic will CE mark it themselves first. FACT. Look ant the antibody test order of events. As soon as Mologic CE mark the test then we will rerate, as although tech transfer hasn't taken place it is validation that the test is 4-6 weeks away from being in production.

Sleepydave -

1) wrong. Mologic will CE mark the test. ODX will tech transfer and then CE mark under the Visitect brand. Same as the antibody test. Mologic CE marked it themselves and the ODX CE marked it under their own brand after tech transfer. There was a presentation on 13th Oct where Mologic stated they expected to CE mark by the end of Oct.
2) Agree

3)The difference with Avacta's tech transfer is that is tech transfer from a developer to a lead manufacturer. The lead manufacture have to produce the batches for clinical validation and the CE mark. Mologic are developer and manufacturer and can CE mark it from the batches they are already producing themselves. It then has to go through final development, into clinical validation and then CE mark. Mologic are doing all this already and it has already been used in pilot schemes.
4) Mologic will announce CE mark prior to ODX commencing tech transfer, and we are told today that it is expected end Nov and could be earlier. So Mologic news of a CE marked lateral flow test can hit the front page any day between now and the end of Nov.

The presentation slide shared yesterday suggested a next generation test with combined antigen and antibody. This has been mentioned in the past in relation to UK RTC. Perhaps the Mologic test once CE marked could go the other way and spread through the consortium members. Fact is Abingdon and BBI had no place in the Antigen market and were desperately trying to get take up for their lateral flow capacity. They had nothing to lose by working with Avacta and it probably suited them for entering government negotiations as negotiating when you only have one product or source of income is never ideal.

sjpw - do you even know what tech transfer is??? Tech transfer is a process that has to be completed by each manufacturer. It's not a one time fits all process. It's taking the manufacturing process from the developer or lead manufacturer and transferring it into your own manufacturing facility with validation batches.