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Slight decline is SP recently, secondary to the 3 cases of coronavirus in Bangladesh no doubt. However, I’m not sure I really follow the link. BXP manufacture drugs – the concerns as I can see it could be 1) reduced manufacturing due to staff illness/or state shutdown, 2) disruption to supply chain activities 3) reduced end user uptake of their products (i.e. reduced sales, and thus profits). But if we think this through, starting with the bottom line (Point 3 - product sales) we know that the biggest threat to patients is having uncontrolled comorbidities (e.g. diabetes, heart disease etc.). The last thing patients (or the State) will want is for patients to stop receiving their medicines. Regarding Points 1 and 2 (manufacture and supply) even if there is a temporary slowdown this should/could be recoverable quite quickly, especially given the demand for their products is likely to remain stable (if not increase). The only issue I could see is reduced supply of API from China – but that’s been a known issue for a while, and one that seems to be improving? Who knows – the market is a fickle place, although more often than not returns back to normality, so I’ll just wait (again).
Humira sales should have read $20Billion
Great news today. Although the RNS doesn't specifically spell out all the biosimilars BXP will receive, from Mylan, we can safely assume (given the indications of RA, Crohn's/Ulcerative Colitis) that one will be an anti TNF alpha. Mylan have an adalimumab (HUMIRA) biosimilar so it's more than likely to be this (the only other possibility being infliximab). Global sales of Humira hit just under £20B in 2018, and the price of biosimilars has held up very well in comparison to the branded original monoclonals. Unexpected but welcome news, in the highly profitably field of biosimilars...
I've received the same from ii and very straightforward to convert (it will happen after the 14th of Feb). Easy decision as they're 20p on the bid here and currently 23p equivalent on the Nasdaq.
II have also confirmed I can carry on holding the ADR's in my ISA. Not sure why HL was telling its customers they couldn't (glad I left HL 20 years ago!)..
We should have the Q2 results tomorrow (or Thursday), and hopefully on track for our predicted 8p EPS this year. As you say cyberduck we're looking at a 5-6% dividend yield (assuming all cash), compared to c1% in the bank. Interestingly in Bangladesh they're getting a much lower divi yield (given the higher SP on the Dhaka) and could get c6% if they held as cash in a bank. Shows confidence that they're expecting good share price growth.
We get the best of both worlds here as even if the SP stayed the same we're still quids in with the dividend.
Thanks Chris
I think with ii the shares (or at least mine) are held in a nominee account. I'm hoping the conversion for these therefore will be relatively straightforward without me needing to convert to certificates - that's my hope at least.
Regarding holding the converted ADS's an ISA (once delisted from AIM) as I understand it (and I'm no tax expert) it lies with who is the "beneficial owner" of the underlying investment. Link below - and looking at the american depository section under qualifying investments
https://www.gov.uk/guidance/stocks-and-shares-investments-for-isa-managers#qualifying-investments-for-stocks-and-shares-isas
So if I interpret this correctly, and according to the circular (last part of my previous post), the shareholder will be the "beneficial owner" of the unlisted security and thus nothing should change in the view of the HMRC i.e. the ADS's should still be qualifying for the ISA - or at least that's my take.. Like I say I'm no expert but I'm hoping to keep all my converted ordinary shares in my ISA once converted to ADS's..
Hi Chris - ii are OK. I hold SUMM ordinary shares in an ISA with them, and also SMMT ADSs . Although you can currently buy SUMM in your ISA they couldn't confirm with me whether we will still be able to hold in their ISA following the delisting? There is some information in the shareholders circular which I've pasted below (page 25). It doesn't specifically mention ISA's but thoughts/take on this are always welcome.
"UK tax treatment"
"Many investors purchase AIM-quoted shares because they are classed as unlisted/unquoted securities
which may qualify for relief from inheritance taxation and certain other preferential tax benefits. Summit
cannot and does not provide any form of taxation advice to Shareholders and therefore Shareholders are
strongly advised to seek their own taxation advice to confirm the consequences for them of continuing to
hold unlisted Ordinary Shares or converting Ordinary Shares into ADS form.
The Company’s understanding of the current position under UK taxation law is as follows (but it should be
noted that the Company has not taken steps to confirm the current position with HMRC and therefore the
following should not be relied upon by Shareholders without taking further advice):
l following the AIM Delisting, Ordinary Shares should continue to be accepted by HMRC as qualifying
as unlisted/unquoted securities for the purposes of certain specific UK tax rules (notably, the UK
inheritance tax business property relief rules). Therefore, those Shareholders who elect to continue to
hold unlisted Ordinary Shares should continue to be regarded as holding unlisted/unquoted securities
under those same rules; and
l those Shareholders who elect to convert their holdings of Ordinary Shares to Nasdaq listed ADSs
should similarly still be regarded as holding unlisted/unquoted securities for the purposes of the same
specific UK tax rules as are referred to above, on the basis that the issuer of the ADSs, contractually
governed by the law of the State of New York, regards the Shareholder as the beneficial owner of the
underlying Ordinary Shares. Each ADS is a financial instrument which represents five Ordinary Shares
held on deposit with the Depositary’s Custodian on behalf of the ADS holder. As the ADS holder retains
similar rights to a direct holder of Ordinary Shares (rights to vote, rights to dividend, etc.) subject in all
instances to the terms and conditions of the governing deposit agreement and it is the ADS rather
than the Ordinary Shares themselves that are listed, the Company understands that the listing of ADSs
on Nasdaq and the AIM Delisting should not cause the Ordinary Shares to be treated by HMRC as
listed/quoted securities ceasing to qualify for relief under the specific UK tax rules referred to above (in
particular, under the UK inheritance tax business property relief rules)."
Scheduled to get the half year results on 31st of Jan. Hopefully they will stimulate some interest. Other than that the only other news expected (IMO) for this quarter is for one, or both, of the 2 in-house ANDA's to be launched in the US. We have a fair bit to wait for the other 8 Sandoz ANDAs to be launched - IMO.
DSE generally has been taking a hit recently - nothing BXP related (that I can see) but that will recover I'm sure. Still higher on the Dhaka than on AIM and hopefully results at the end of this month will give the SP a new year boost.
Looks like only resolution 2 (Directors remuneration) met with any voting resistance. Probably down to Glyn wanting a 3% raise on his current £650k a year package..
Hoping now we'll receive clarity on how to exchange our AIM ordinary shares to ADS's. ii informed me they are led by the company or company registrars, and hoped to know more after today's meeting.
Fingers crossed for a rally on the Nasdaq, now we have more certainty. Any Nasdaq rally, combined with a simple AIM/ADS conversion, should see a knock on to the AIM SP - IMO.
I think it's a foregone conclusion now. The votes are almost certainly in favour of approving the delisting and accepting the $50M. The deadline for the proxy vote was 16th of Dec so I guess they're over the line already - hence the RNS today speeding the timelines up.
Worth noting that last time, when Bob Duggan added $25m, it wasn't until the shareholders officially approved it that the SP moved up - despite that being a foregone conclusion as well (over 99% of shareholders voting in favour).
I've just recalled GW did something similar 3 years ago. There's some historic information online which may be helpful (of course this relates to GWs delisting, but I'm guessing the process here could be similar?)
https://www.sec.gov/Archives/edgar/data/1351288/000114420416128594/v450769_ex99-3.htm
Given the new subscription/placing is for ordinary shares on AIM, and Bob Duggan will be subscribing to 166M new AIM shares, I'm assuming the process to convert to ADS's will have been relatively well thought through (if he's in the same boat as us that is)?
I'm going to hold for the time being. Not sure there's a lot of point selling at today's AIM price. If we're delisting/converting to ADS's, the AIM price then becomes irrelevant and it's all about the NASDAQ SP, and how many ordinary shares you hold.
In the shareholder circular it states
“Subject to the Cancellation Resolution being approved, the Company expects to send to Shareholders further information detailing the process by which Shareholders may convert their Ordinary Shares into ADSs.”
It would be nice however if they could detail this before we vote (assuming the vote won't change the process), and allow us make a more informed decision. I guess we have to trust this can be done smoothly.
I don't see it as dilution when the shares are purchased at market price (or slightly above today's 21p). If they were given away at a huge discount then I'd see that as dilution... Just means we'll have a smaller slice of a bigger pie (as before when he bought $25M). I'm pretty sure Bob Duggan will have a game plan - may be to sell off before 2021 (at more than the $1.60 he paid initially) or accept he will have to add more in the future.
Happy reading for those interested - just released
http://beximco-pharma.com/investor/annual-report-2018-19.pdf
A little more info in the shareholder circular (https://www.summitplc.com/app/uploads/2019/12/201912_Fundraise-and-GM-Circular-FINAL.pdf)
"If Shareholders approve the Cancellation Resolution, the Company will seek to provide support to
Shareholders to enable them to convert their Ordinary Shares into ADSs prior to the AIM Delisting taking
effect. Shareholders should note that conversion of Ordinary Shares into ADSs must take place in multiples
of five. It is not possible to receive a fraction of an ADS, so in the event that this conversion is completed
after the AIM Delisting has taken place, there is a risk that Shareholders will be left with a small number of
Ordinary Shares (a maximum of four Ordinary Shares) which cannot be converted into ADSs. "
Thanks Chris - I'll wait to hear more. On the face of it all seems reasonable to me. Bob Duggan previously bought $25m @ $1.60 (SP rallied) and now adding another $47.5M to the pot @ $1.45 (equivalent), fair enough. We'd all have liked to see another add @ $1.60+ but his contribution seems very welcome. Anyone hoping for a takeover shouldn't be disappointed either, buys more time to add more value. Be interesting to hear the logistics of the delisting. I hold my AIM shares in an ii ISA but not sure ADRs were allowed in it?
If delisted on AIM - do our shares then automatically get transferred into ADRs? - sorry if this is obvious to others..
I think when they say I & I services Ltd is "related" the reference is to the fact it's a sister company owned by the Beximco group, and lies beside BPL on the organogram (link below).
https://www.assignmentpoint.com/science/pharmacy/financial-performance-analysis-of-beximco-pharmaceuticals-ltd.html
It's not unusual to distribute through a distributor. In the US their distribution partner is Bayshore Pharmaceuticals LLC (not related, as far as I know) but for Bangladesh it so happens they also own the distribution provider (like everything else it seems).. My take at least but doesn't look like an Enron (far too transparent!).
Nice plug on The Motley Fool
https://www.fool.co.uk/investing/2019/11/11/id-buy-this-pharmaceutical-growth-and-dividend-stock-alongside-glaxosmithkline/