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Morning GMS, that’s interesting that the reimbursement has gone up to about $2400. It’s 90% profit margin as I understand it.

As you say Jon Burrows knows his stuff and has shown commercial acumen from his past and is putting it into practice here.

There looks to be a clear pathway to profitability. Potentially CiRT could produce breakeven/profitability alone if 450 plus tests per month are attained this calendar year but PSE revenue will come into play of course.

I am sure the Company and the new appointment have their targets. With the two established and combined tests the Company could well be very profitable this time next year. The share price for a high growth cash cow could get very interesting!

It’s hard to get a handle on likely PSE test numbers per month just yet. They have said they will link with the large diagnostic companies once the test is established. My view is that is the more likely focus/next news rather than rolling out the Colorectal or canine cancer tests but we’ll see.

If the initial target is those that are sent for biopsies in the U.S. as a result of an adverse PSA test then the numbers will be decent given the inadequacies of the PSA test by itself.

I am pretty sure if given the choice of a supplementary PSE then, based on known stats of unnecessary biopsies due to the PSA test failings, almost all patients would want it.

It would be odd if even 1% of those flagged up for an unpleasant risky procedure chose the biopsy route prior to a PSE supplementary test given the latter is likely to result in it being avoided.

Buy and hold went out of fashion many by years ago but I do think it will reap rewards with that patient approach here. We’ll get a clearer picture on the 17th and the webinar following the results will be interesting as well.

For balance, I should add I think HSR is over-egging the profit projection ($150m on 200,000 tests) as the profit per test in the U.S. is likely to be $200 on a $500 sale price so $40m profit. Those projected figures are from the CEO in a presentation.

It could be more though. He says they start higher with a high figure (about $1,000 per test) and then the pricing settles down. I am not exactly sure how that works but he mentioned with CiRT it started at a cost of $5,000 and settled at $2200 with a 90% profit margin. For the PSE test, the CEO envisages it will settle at around $500 and projects at least $200 profit per test. It's currently fixed at £750 in the UK for the PSE test.

Regardless of the seemingly incorrect figures in the HSR tip, any growth in the tests take-up towards an initial 1% of the prostate testing market share and accompanying $40 min profit means the Company would almost inevitably be heading for a $1b m/cap. That's based on a relatively low forward P/E with exponential growth just on one test that is vastly superior to the current standard PSA test which currently has around 25m tests per year.

The capacity is there for 200,000 tests for PSE and this can be scaled up to 600,000 with a mere $1.5m investment. For higher figures then the CEO says:- "The plan though, after launch and adoption, is to partner with the leading healthcare laboratory testing companies and use their existing laboratory testing facilities and distribution networks to achieve a much larger market share."

The initial outlook in the results won't show the growth for PSE testing just yet as the reimbursement code for the test only kicks in at the start of Jan I believe. So it will be the CiRT figures that will be of most interest plus any commentary on sales prospects for the PSE test.

Profit from the sale of 250 CiRT tests per month ($5m profit per annum) and the profit from a mere 2,500 PSE tests per month ($5m profit per annum) should see the Company through to about breakeven. The demand for the PSE test is of course likely to be much higher as given a bit of time after launch and the start of the remibursement code being used. Common sense suggests users will opt for a vastly superior test that has an accuracy that avoids the high PSA false positives and means an unpleasant and risky biopsy can be avoided in most cases.

Tipped by Hot Stock Rockets on Friday morning I believe.

Without breaching copyright it recognises much to do in production/scaleup but focuses on the PSE test and the accuracy enhancement highlighting the vast potential of this test. Points out that with 200,000 PSE tests per annum in a much vaster market than that there is circa "$150 million profit potential and the market size potential is much vaster than that."

Not an in-depth tip/article. I think there are about 24m tests PSA tests per annum just in the U.S. alone so 200,000 PSE tests is less than 1% of the market.

The obvious question is who would want a test with 55% accuracy resulting in 19 out of 20 men having unnecessary biopsies when there is a test that increases accuracy to 94%. The potential here is staggering just for one test capturing a fragment of its market. It's just a question of the extent it can be delivered and the timescales.

Dug, that should have a positive impact for CiST figures.

A bit more on the forthcoming tests roll-out from the Chief Scientific Officer, Chief Scientific Officer, Dr. Alexandre Akoulitchev, on the 'in the loop'. blog.

"As previously mentioned, our upcoming commercial tests include early detection of colorectal cancer and, in the field of veterinary medicine, a multi-choice early diagnostic test for the most prevalent dog cancers. The latter holds a special place in my heart as it allows us to apply our technology to assist our beloved canine companions. Additionally, it sets the stage for developing a human version of a high-performance multi-choice early cancer detection test."

Interesting Krull and thanks also masarap. That’s an impressive list.

I read on Stockopedia that the next tests to be rolled out are for colorectal cancer and also the veterinary market and, in particular, various canine cancers. Both lucrative markets I would have thought.

I think they did 93 CiRT tests in June with 50 doctors (the last figure as far as I know available) so I'm hoping to see 150 plus CiRT tests per month which will be significant growth. That coupled with the anticipated growth from PSE tests in '24 should make it an interesting year.

I'm being quite conservative with that figure on the basis they had the full amount of doctors (50) selling the tests so the growth might slow a bit with the sales personnel (as far as I know) not being increased. We will see.

They only need a small share of the prostate market to move from small-cap to mid-cap status and it's hard to see how they wouldn't get this with a vastly superior test to the PSA test in a substantial market. As you say, growth with a clear pathway to profitability is all the market will be looking for to potentially re-rate as the market always looks forward.

Just bought a position as this could do very well throughout 2024 and beyond as it moves to breakeven and profitability.

I was staggered by how many conditions could be tested via EpiSwitch. Some tests are highly commercial and others such as ALS (motor neurone) less so I assume, but they validate the testing science.

Presumably, the company will focus on the prostate and CiRT tests rather than roll out new ones in the near term.

Perhaps the colorectal test will be the next test to be rolled out. Does anyone more steeped in researching the Company know if they have put out a timescale for launching this (or any other) test?

In the last results webinar, they covered some potentially colossal numbers for the PSE prostate test. They mentioned $50m revenues -in effect profit $50m ($200 profit per test from an estimated $500 price) based on 2% of the U.S market. Figures tended to vary and it was also mentioned that 2m a month in the U.S. undergo a PSA prostate test. In this case, 2% would be $80m profit from the tests.

Obviously, these numbers are a long way off but does anyone know the scope they have for scaling up testing to meet demand?

It looks like insurance companies will eventually be mandated to cover the PSE test (seems New York is the first state) but, insurance aside, who wouldn't want to spend $500 for more certain knowledge and avoid any unnecessary biopsy with the accompanying highly unpleasant potential side issues?

Part 2

Weighed against that of course is the fact that XF-73 and NTCD-M3 still have to pass phase 3 although all data so far bodes well. Multiple discussions suggest that they should be able to fulfil their prime objective of maximising shareholder value whether that transpires to be a licensing deal or an outright sale.

Sajy, your original post was spot on in my vew. I'll copy my post from advfn here as it just elaborates a little on yours.

Part 1 :-

It’s reassuring to be in the hands of, for AIM at least, an unusually astute CEO with an impressive track record.

He has used his words very carefully and within what appeared an innocuous ‘say nothing’ statement there is a revelation that, to me at least, is interesting. It’s just the obligatory style of wording that plays it down.

If the announcement said “we are evaluating a number of options including a sale of the Company or self-funding the XF-73 nasal trial” then that would have been massive news. But I think that’s, in effect, what they did say.

They are evaluating options other than licensing/partnering:- “Destiny's priority remains to realise the maximum value for our XF-73 Nasal asset. ..The Company is evaluating all options to achieve this, including continuing discussions with a number of potential partners, with a view to delivering the best deal to maximise shareholder value."

“All options” include self-funding phase 3, variations on the structure of a licensing deal, selling the Company or just a sale of XF-73 nasal. The objective of maximising shareholder value was emphasised a couple of times. I don’t think a self-funded trial is something that fits with that and it’s been firmly dismissed before by the Company as not within the business model so, by deduction, I assume the evaluation of the options beyond partnering is whether to license or sell.

The announcement doesn’t explicitly say that some of the multiple discussions are with potential buyers as the wording is ambiguous and presumably deliberately. For example. there is one sentence that could mean the reference to “continuing to progress our partnering activities” related to progressing partnering activities specific to NTCD-M3 and Sebela or it related to “discussions with multiple interested parties.” It might have been deliberately opaque as transparent references to the nature of discussions would be restricted by NDA’s.

Of course, it's still most likely they are likely to conclude a licensing deal but I wouldn’t rule out a sale based on the contents of that announcement. If so then the results of XF-73 Dermal might be awaited to formalise a value.

If there were a sale, I have no idea of the likely value but a decent licensing deal for XF-73 would put the Company in the £200m to £250m valuation I suspect so, on that basis, it would be north of that.

I can't rule out that Chris Tovey was sending a message out to interested parties that they are exploring all options because current licensing deal offers are currently short of what is required.

It’s also arguable that Chris Tovey isn’t going to sell the Company for £300m or so if he is referencing long-term "shareholder value" and perceives it will ultimately be worth something towards the GW Pharma value a few ye

A couple of assumptions being made. The first assumption is that it would be costly and unnecessary to scale up to the aspired 20,000 litres at this stage as it is a simple process that would be a formality and done prior to Croda being ready to launch. It may be a reasonable assumption but why haven't the Company stated this?

Why would the Company not explain that this is the case rather than assume that investors, most of whom will be far from experts on the ease or otherwise of scaling up lysate production, will automatically understand it?

SA has made a big thing of scaling up from 600 litres to 2,000 litres so if that was a significant technical achievement why should investors assume scaling up to 20,000 litres is routine? It may be the case but, if it is, it should be communicated by the Company if it is via RNS.

Secondly, there were significant benefits observed in the scale-up from 600 litres to 2,000 litres. Perhaps 2,000 litres is the optimum for highlighting benefits. I'd just like the Company to say as much because as a layman I am left wondering if they scaled to say 5,000 litres if even more benefits would be shown.

Unless the Company say otherwise and communicate with clarity, then it's a reasonable stance to assume Croda still have a fair bit of work to do to scale to 20,000 litres. This is the target SBTX has stated needs to be achieved and they have never reasoned:- "T

We will just wait until after the trial results and then it's a routine process to scale to 20,000 prior to launch."

All this is secondary but related to my belief is there has to be a reason why SA has embarked on a strategy of multiple acquisitions rather than wait for Croda/Sederma to launch (along with the possibility of a lucrative AxisBiotix-Ps deal) and watch the share price to soar. My reasoning is that SA is not wholly confident Croda will launch as early as he has indicated (perhaps or perhaps not because scaling up will take time) and the acquisitions are his means of insurance in case they don't. He can't come back for cash again without a commercial deal whether it be Croda launching in the first half of '24 or a multinational deal, he isn't confident regarding timing for either prospect hence he has gone down the acquisition route.

Perhaps I have got that wrong in which case I think SA is foolish taking on debt or CLN's when, if he is genuinely confident, he can simply wait for Croda to launch and watch the share price re-rate to significantly higher levels. Dilution at current levels for acquisitions or using equity at 50p plus after Croda launch? The latter of course although my preference would be none whatsoever as I feel given the expenditure Croda has undertaken means SA should not be nervous about commercial launch. That really will be transformational rather than acquisitions using debt and CLN's.

Meanwhile, let's see what the "heavily pregnant" SBTX deliver this year

Madaboutmedtech, I admire your steadfast loyalty. I notice that you have used in past posts some uncannily similar vocabulary used by Stuart to depict investors' views including the likes of 'dumb', 'stupid' and 'silly'. Are you perchance related :-) I am only joking.

I'd say either there is a mass of news to come this month as intimated by SA's "pregnant with news" comment or it was an exaggeration prior to the placing for whatever reason investors may wish to speculate on.

So, it's not unreasonable to assess whether these bullish utterances come true and have any credibility rather than, as you put it, holding Stuart's 'feet to the fire' for every word uttered. It's either true or its not. It comes down to something far more basic than excess scrutiny which, incidentally isn't a bad thing when it comes to assessing AIM ceos. It's more a case of trust and credibility.

Likewise, its perfectly reasonable to assess Stuart's statements that investors 'won't see what is coming' to 'transform the Company' into 'something unrecognisable' to its current state by the end of the first quarter next year.

SA had already flagged up an acquisitions in announcements but refused in the interview to say what it was that would transform the Company. He could easily have confirmed it was acquisition-related as that intention had already been RNS announced. It was therefore not price sensitive (as he replied it was to me) if this transformation related to his £20m acquisition plan.

A cynic might think he wanted to leave the thought open that he might be on the cusp of concluding an exciting licensing deal or two. It would be far too cynical to think that he wanted to leave investors to incorrectly ponder if he was referencing multinational deals rather than dilutive acquisitions.

Subsequently, it became clear in the final results that his hype related to multiple acquisitions. Not something that excites me as much as Stuart who was off-the-scale with pre-placing animated enthusiasm.

Lastly, some investors apparently received replies to questions from Stuart that, perhaps understandably, led them to incorrectly perceive that Sederma had scaled up to 20,000 litres or were well on the way. That may be the case but it was clearly stated as 2,000 litres in the final results statement. It appears in the emails Stuart was referencing the size of the tanks installed and (inadvertently of course) left it open for investors to conclude these 20,000 litre tanks had been filled to capacity. The factual scale-up achievement in the official announcement is 2,000 litres.

So it is important to look at his words and check for any ambiguity. That's what all sensible investors should do - particularly on AIM. I'm not sure why you would have a problem with that. "Abuse", however, is another matter of course and completely unacceptable. I've only seen polite questioning and reasonable and informative debate on here.

Great article Rob and despite the illogical protests of the well-balanced non-holders (chips on both shoulders) HAA couldn't be spelling it on more clearly.

The COO, Eddie Solbrandt, said mid-Dec and the pr volume with the 'done deal' message is increasing in line with that timescale. Of course, the timeline is with the banks but they wrote to Kefi to state a two-week delay which would take things up to mid-Dec, so, unless there is any different message or unanticipated further slippage from the banks, then that's the highly likely timescale.

HAA doing the rounds and saying "Construction crews are on their way to Tulu Kapi" is about as clear a message that he could give.

Mr P - ho ho. No, not announce but, who knows, quote possibly it gives a hint that Harry is hoping to discuss something with TW in that timeframe (weekend, early next week) of interest which he is unable to discuss with Tom as of now. Perhaps the biggest hint was in the recent interview when HAA was doing his best impersonation of the laughing policeman. All relative of course.

TW said he has exchanged emails with Harry and the 'shindig' that Tom was invited to `(but declined) went 'very well' , funding is 'on track' and he will speak with Tom over the weekend or early next week.

A couple of points I had to google 'shindig' and it means 'a large, lively party, especially one celebrating something!'

With reference to 'on track,' it's important to remember that Eddie Solbrandt anticipated hearing by mid-Dec. I don't know whether we should read anything into HAA's timeline for a call with TW before early next week. Harry said he didn't know which week but I'm not sure. For sure, at a minimum, he'll have a better-educatedRegarding guess than most.

Either way, I tend to have a two-year rather than two-week outlook and whilst I want to see the funding signed, sealed and delivered ASAP as much as anyone, I will not be perturbed if the signing comes in Jan. It won't impact where the two-year share price is going. But for the record, I'd have an extra Christmas shindig if it comes in the next two weeks as I firmly believe it will!

Deedee, 200m m/cap based on "5,000 potential more than 5 million ounces of gold over the next coming years" is a fair but perhaps conservative valuation. In Harry's recent interview, he projected this 5,000 figure would double (10,000 ounces). His point was that most countries have been worked over but this is completely the opposite for Ethiopia and Saudi Arabia so there is little ceiling.

I also think the prospect of a Saudi listing (which HAA has flagged up as on the cards) would propel the shares to a much lower NPV discount. Others have quite rightly pointed to the potential acquisition of the Tulu Kapi assets from a larger player which would no doubt give an early boost to KEFI's mcap.

I suppose KEFI as a whole might be an acquisition target but I think seeing Saudi assets developed would probably enhance shareholder value the most rather than an early takeover.

Lastly, if the gold price motors as many have predicted next year, then junior minors and especially the likes of KEFI are likely to have their turn in the sun. They have had 10 years or so in the doldrums so it's about time. Exciting times and the initial re-rating will be kick-started once TK financing credit approval comes in.

Toyin, I can see why you perceived they had achieved 20,000 litres and he reiterated the same line in the March 23 release "Sederma ... is testing the scale-up to 20,000 litres in a custom built vessel in Widnes.” I suppose SA would argue that he referenced a 20,000 litre capacity vessel but he, carefully or otherwise, skirted around confirming whether Sederma had filled it!

I sense Stuart is content to let bullish misperceptions float or even fuel them. The same applies to the possibility of a multinational deal on acne before year-end following a successful 2023 study completion. I don't believe that was ever realistic and the last reference was recruiting participants. I recollect SA fuelled the belief a multinational deal was possible before year-end in his answers to either TW's or Elric's questions. That obviously would only have been possible if a successful study had been completed and that was surely never on the cards despite SA leading listeners to conclude otherwise.

TC, I agree BSFA are very early stage and there is an element of hype in the announcement. SBTX will be well ahead of them. Croda have invested circa £6m which endorses the view that they will launch as soon as they can:-

"3DBT is pleased to announce that it has entered into a proof-of-concept contractual agreement with one of the largest cosmetic companies in the world"

I think Stuart plays up expectations unrealistically either clumsily or deliberately.

Toyin, who observes the analyses the Company more than most thought that the Sederma had scaled up to 20,000 litres. Presumably that view was based on SA's interviews or, understandably on the wording in the March '23 announcement :-

“SkinBiotix Pillar (skincare/cosmetics)

Sederma has successfully scaled-up manufacture to 600 litres and is testing the scale-up to 20,000 litres in a custom-built vessel in Widnes.”

In terms of acne results, SA hasn't managed expectations very well and rather than a study completion in 2023 it looks like it may only be recruitment for a study that commences early '24. SA hinted in interviews he hoped to get a commercial deal for acne before year end 2023. That implied the study would have been completed with successful results by then. Elric, who has made some terrific contributions and who I know even more after chatting with him is a very good-humoured and likeable guy, had to put a footnote after the last interview that clarified that the acne is a two-part study with the second part to come.

I think there has been some slippage in Stuart's anticipation of Croda/Sederma scaling up progress and associated launch timescale along with delayed acne results which are essential for multinational licensing deals hence the acquisition strategy. Slippage is normal and I think SA would still have been better off waiting for the Croda launch say mid-2024 and the completion of the acne study before embarking on acquisitions.

Fair comment Aquae on acquisitions but I think the timing and scale (£20m over 18 months) is wrong and sends negative messages on the prospects of a timely Croda launch and a multinational deal. Perhaps SA's hand is forced and the negative connotations are a reality but that would conflict with the public domain information about Croda/Sederma being on track and Acne completing the study in first qtr 2024. I believe SBTX will come good but in my view they shouldn't dilute at current levels to fund the acquisition strategy and should put it on hold until share price-enhancing news (acne, Croda and updates on licensing progress) is delivered.

I

It looks like there will be some potential competition for scientifically validated anti-ageing cosmetics and possibly acne treatment as well.

https://www.londonstockexchange.com/news-article/BSFA/3d-bio-tissues-product-partnership-progress/16223351

Not necessarily a negative as Croda appears well advanced with potentially exciting scientifically validated claims and it's a huge market. Also, the announcement by BSF Enterprise might mean any resulting licence is exclusive to the large cosmetics company referenced and competitors will need something with similar claims. Step forward Croda who will be much more advanced in their studies. That said, I am confused by Stuart Ashman's comment "scaling-up manufacture of SkinBiotix™ from 600 litres to 2,000 litres which is expected to ultimately lead to the 20,000 litres vessel required to service the global market." I thought he has said they were already up to 20,000 litres?

I am currently out of SBTX due to the prospect of further requirements for funds for several future acquisitions. I will monitor and potentially look for entry when Croda launches if the cash burn is under control, OPTI's remaining holding is in stickier hands, and SA has modified his £20m acquisition spending spree. I also hope he will modify his salary a bit as well or at least make it performance-related.

More important than that, I hope SA will avoid multiple acquisitions as it sends the wrong message. Croda and multinational deals are the game changers and diluting in advance of such events suggests to me that SA has little confidence in achieving a decent licensing deal in the medium term and isn't overly confident of a revenue-enhancing Croda deal in say the first half of '24. If he is confident then his focus should be in both of these areas and then there really would be no need for acquisitions as SBTX would be on a pathway to substantive profitability.

I know his argument is that he needs SBTX to be financially strong to get an optimum licensing deal but a) any multinational can see he has been able to raise funds and the balance sheet is good for 12 to 15 months now so his negotiating position should be fine b) he says he plays one multinational off against another to get the best deal - that competition should be enough to get a decent deal c) licensing deals are regularly made with small caps and biotechs with much higher cash burn than SBTX d) get a slightly less than optimum initial licensing deal rather than dilute and get diverted focusing on multiple acquisitions.

There seems to be some confusion here. The warrants can be exercised at any time including now. Logically they are not going to be exercised unless the share price is above 1.6p.

Realistically at say 1.7p and above, most holders will exercise. The confusion arises by the fact that at 2.4p or above for the specified timeframe, warrant holders *have* to exercise or lose their warrant entitlement below 2.4p exercising is optional.

Thanks Banjoroeguy. I am mainly looking at the difference between accuracy (94%) and sensitivity (86%) for the PSE test and getting a handle on which one is the key figure. I assume the former and that's certainly the one that will get the media attention. In terms of take-up it doesn't matter too much because sensitivity for the PSA test drops to 33%.