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Yeah Thompi, totally get it.
Its just sometimes a place of frustration for me when members just blindly say - Fully funded. Thats what the company said, correct but they have also said other things to the contrary.
Anyways, you do really need to spend alot of time getting into the weeds of all the info and follow the story and Im highlighting points for those that might have only dipped a toe into understanding everything.
However, I remain Flexible to outcomes and decisions of the CEO.
the lft had no relation to the success of the company since we have had nothing but news about corruption from politicians since.
the fact that we did have one of the best tests on the market, but were gate keepered away by the likes of phe etc.. the fact the gov had a monopoly on covid lft market be becoming the single source supplier to the public.
just a *******s thing to bring up and should just be put down to lessons learned... and a way to use the experience to develop products for dx. nobody was getting a look in unless you greased the wheels. dunno why people bring it up as a negative to the co, maybe its again another thing that you need to fully understand first.
Well then you would need to include Myles McNulty into this then since he was one who brought up the fact the BoD were looking at further M&A for Dx... something he was trying to avert!!!
Ive been here years... Ive held from initial entry of £1.80 in LFT days through to 40p drop. Buying everything i can in between and still hold without selling. My posting history will tell im not one for spreading FUD but i do like to discuss lots of different subjects SUBJECTIVELY ... by discussing the ins and outs of RNS info and what's been actually said and analyzing it.
Regarding the manufacturing statement you put... yes... i also said the exact same thing. Its very clear on the slide. So what about Self testing? Could you forsee them making further M&A in that direction? Who said it would only be a small purchase? What if small is £10m?
But you cant disregard what the co have said, include comments from Myles regarding further M&A for Dx and conclude that all the current funding is fully towards Tx.
There might be a balance there... but what is it? £500K or £10m? Whats the impact on our bottom line?
Im just coming from this if you were just to read the RNS's.
And i dont think its a clear message from a financial point of view on the direction of the company.
The expectation (including my expectation) of the launch dead was leading to a significant milestone that would fund Tx was made. Something like licence of 3996 for instance or Affyxell.
Or that any further acquisitions of Dx would be confirmation of a significant milestone inbound. Rah and myself had a convo about this and i think we were aligned to this.
Seems lots of theory's and thoughts on the direction based on what the company has said. But a simple line of there is no further M&A planned for Dx would have cemented the current working capital towards Tx beyond doubt.
Its just a bit confusing messaging to me which isnt ideal. Options are great for a company though, but the launch deal, Dx direction has yet to fully develop without affimer products.
Still think this has nothing to do with the SP tanking, and its just the market doing what it does... nothing to do with the opportunity presented to Avacta or the company progress.
Also think the average punter might not fully understand all the ins and outs of all this either.
Quote from RNS
"The Acquisition provides Avacta with an established route to market in the UK and several European in-vitro diagnostics ("IVD") markets for existing and future products that it distributes, develops or acquires. It is the first step in building an integrated IVD business with global reach that has the advantage of Avacta's proprietary Affimer® platform to differentiate its immunodiagnostic products in a competitive market. The Company intends to use the net proceeds of the Fundraise to pay the initial consideration of £24 million for the Acquisition, for general working capital purposes of the enlarged Group and to support expected growth of the Group (as enlarged by the Acquisition and any future acquisitions)"
"Further acquisitions", we had the mentioned Off site testing, Manufacturing and Self test slide previously, where they mentioned not looking for manufacturing co - So that would lead to a self test M&A co?
Adding to this, the comments from MM that the company were looking for a further acquisition and He and others were trying to put pressure on the management to change this direction and fully fund Tx instead.
Simply, if Avacta go and spend another £5-15m on further M&A then are we still fully funded to 2024?
The expectation is, they are putting the cash fully towards Tx... but im not sure we can 100% confirm this expectation
No thats not quite where im going with this.
We cant be "fully funded" using the £30m odd from the Bond etc to progress Tx, keep lights on etc,,, if we are progressing with further Dx M&A.
We have ASSUMED the rest of the cash is going towards the Tx side to get us to the end of P1B.
If they spend it on Dx, then we need cash from somewhere in the next few months.
The company hasn't clarified this so far... and the RNS doesnt collude with the cash going towards Tx.
I would like this clarified that they are finished with M&A for Dx for now.
Actually Wyn, I think your missing something.
Avacta said... The bond was for M&A for Dx.
So is the market waiting for this to play out and is expecting them to wax the cash on further Dx M&A leaving Tx desperate for Cash?
Reading the RNS, this is what it sounds like waiting to play out. Have we just assumed the Tx side is fully funded?
It certainly wouldn't be if they go shopping on the likes of ABDX.
Obviously it cant be both, a fairly large acquisition and be fully Tx funded for P1B. I would prefer the company to just allocate the rest of the cash to Tx and state this in RNS and say no further M&A for Dx will be occurring using the Bond money.
Im not particularly keen on the Dx play but im not the CEO so i dont have the big picture but maybe, this is adding to some nervousness in the SP.
SP
Dropping from £1.80 to £1 since SD and other RNS progress has no bearing on the company progress.
The reason you would see a drop is if the trial was not going well, funding was running out, Directors selling up, looking at further raises and an overall gloomy outlook.
Its actually quite the opposite, fully funded and trial progressing nicely.
So ask yourself, is the SP from £1.80 to £1 anything to do with the company, or is it just market dynamics? If its the latter, then its just an opportunity for those in the knowledge.
Death Spiral.
Company takes out a bond to "KEEP THE LIGHTS ON"
They end up crashing the share price constantly. Eventually the cash runs out running the business, the company prospects didnt improve and the company is left needing more cash.
This cycle leads to the death of the company.
Avacta, bought a profit generating company with the bond as well as funding part the trial creating value. Far from just to keep the lights on.
The bond was good value when considering what Carnival and other companies were offered and at the time, other companies couldnt secure even a smaller amount of cash - Clovis for example who then went Chapter 11.
Eventually the Launch purchase will be a big asset and fully paid for... On top of a hugely valuable Tx division.
They can be death spirals, but i dont see it in Avacta's case as long as the trial is successful and keeps progressing.
The other macro thats occurring with Avacta.
We have seen huge changes and swings in SP. This will be a red flag for investors.
I think there will be less risk and more interest if we were sat at £6 rather than £1.
Simply because... in order to achieve £6 excellent news must have happened.
Problem is, I think that news is BO and those not invested will be locked out. So either in or out. Prior to that... we will sit below £3 regardless of progress in the trial.
Money,
Avacta could go bust in worst case scenario.
No deals, No BO, No partnerships etc. Very expensive P2, basically everything would grind to a halt... They wouldnt be able to raise enough cash to progress and we go Chapter 11.
Clovis is an example which their main asset was sold off for about $500m.
Remarks just on balance, and why one of the reasons id like a deal following P1a... rather than nearing the start of P2.
Think regarding the current SP...Relatively unknown company and even more understood.
Reading the RNS.. are we Tx co? Dx co? Both?
Lots of defined but still unknowns. Last cohort or second to last?
If you have to sell other assets to buy in... is it still too early? People want to have money earning elsewhere then time this just before monumental news... which might be the closure of P1a and maybe the BO.
We are some time away yet... clearly... so the SP languishes. Nobody invests nowadays... its all short term trading.
CJ... maybe rephrase with clear definitions.
Is this scenario based on AVA6K being 100% solely owned by Avacta?
If so... then not only money but an extortionate amount of time would be required also.
I dont know values, but the challenges are not only funding the trial from P1a through and past P2... but then onto commercialization which i just don't see Avacta being able to do... its also a timeframe problem should they "Be going alone" So then it would be down to how much equity is released and so not "going alone"
Theres a whole support arm needed, Manufacturing, to name just a few and the list does go on. Avacta are just a very small R&D outfit.
The rhetoric that we will retain 100% of 6K and 100% of 3996 right through to commercialization and sales... is simply not going to happen based even on something like £100m upfront License deal for X. We would need something like the whole market cap in cash. Promethous rasied £500m prior to selling up for £bn in the hopes of going alone.
its not that simple, its how long and how much to set up manufacturing and distribution?
"amateurs talk tactics, experts talk logistics" - Omar Bradley
Thing i see is the real value of selling the whole lot.
What are we going to license or partner up on?
We could license the platform off for others to develop their own Pro drugs, but i dont see the value of such a license being able to cover the sums needed to proceed further.
Even £100m upfront for X isnt really enough cash following P1B.
Loveable, I also see that as acceptable and would mitigate some of the cash issues we would experience later in the P1B trial.
Just realize that some deals can take time to establish and obviously the trial would still progress.
Theres a whole host of options to Avacta will present at the time but with HC still looming over us, for a Dx play and the amount of cash needed it will be really critical Avacta can maintain a sustained increase in the SP, something thats eluded them so far.
Will get messy the closer we get to end of P1B, that I'm certain of and would like a deal secured before that develops.
Thinking about this more from a position of strength when negotiating.
BO offer end of P1a
- P1a finished and full data set
- Funded for P1B
- Trial prepared in US with creditable backing from Dr Tap et al as endorsement.
- 3996 IND Filled?
Vs
towards End of P1B
- Bank would be completely dry and Avacta would be looking for cash even just to keep the lights on.
- Funding for P2 would need to be sought.
- AVA3996 likely needs cash to enter clinic and start trial
The sheer amount of cash Avacta are going to need will be substantial and i just cant see it happening without releasing significant assets.
I understand more data = more cash... but if I was to go into a meeting and negotiate a deal at end of P1a or near the end of P1B.... I would choose P1a every time.
Whats happening.
Time period between Cohort starting and ending is 2 months.
This has allowed a news gap of pretty much guaranteed no news. To add, AS Said if no news, then thats good news. Every day without news at the moment is positive progress.
Traders / FUD are using this period of quietness to crash the SP as much as they can, using Charts to support their position.
I think the current bottom is around 95p.
Once this hits, I am certain that all the commentary will reverse and this will then have a steady increase up to the end of the current Cohort ending.
We could end at this next Cohort, or escalate a further time.
We have had an extended P1a due to the science being far better than expected, but the end of this phase is now drawing to a close one way or another and we WILL move to P1B within a few short months.
P1B should be a little more structured regarding timeframes as there isnt an unlimited MTD to find. Its incredibly rare you find a development drug that is struggling to find an MTD and this has been part of the issue for Avacta so far, a victim of their own success.
My personal view is that a BO will occur soon following P1A, and one of the reasons why P1 was split into P1A and P1B. It allows a data set to be released and an opportunity to be acquired. If not then the next period will be sometime during or following the end of P1B obviously.
I literally couldn't find a better time to be building a stake at this point as you are jumping ahead of 2 years progress with this stage closing very shortly, something we havent been able to establish during this long trial period so far with each cohort escalation being added.
I've never been more comfortable or excited about Avacta than this period coming up right now.
Nope.. in this instance... you have lots of ideas for books. But no actual books exist.
Theres only a title and a glossy cover... theres nothing to read in between.
When you actually have a book... then you might end up like JK Rowling... might need to knock on a few doors before it takes off tho.