RE: New Cenkos Research Note27 Apr 2023 16:49
Great post from Adam below.
If those financials are correct, then that is a pleasing report.
Year-end residuals should be bolstered significantly by revenues from Inaphaea. Now, these would only be revenues, but they would hopefully be paying for the staff and equipment/some new capabilities, as the lab builds, to ultimately turn over a few million per annum. Cash looks good until well into next year, based on this.
The lab will also save significant time on any new compound evaluation; probably halving, if not more, the time taken for “preliminary analysis”. Additionally, it will halve the cost of this analysis. And with R&D credit access, these evaluations will almost look “cheap”. Even Cathy’s time can probably be claimed towards it; nevermind just the lab staff.
Obviously, VAL are still at a fairly critical juncture, but I expect the leadership to be acting on this.
The lab evolution has, to my mind, been great. But I am opposed to any further third-party acquisitions at this juncture; especially as I see something great emerging here. I think the BOD would do really well to take the “buy-and-build” categorically out of the minds of shareholders, for whom the threat of near-term dilution has absolutely caned our SP; not least give endless ammunition to those that wish to use it detrimentally. It’s a great idea, in a world where our SP isn’t down 65% YOY. For me personally, now is not the time, but it may be in future.
So, I think that a sense of measured and incremental progress (as we have, to be fair, thus far seen) with the CRO arm is fitting.
However, in contrast, a more pressing sense of urgency is required for the legacy and some new evaluation compounds. And although various contributory factors may have led to a “drag”, now is the time to get some of them on the road, or out of the parking lot; preferably by June. Not least 201; an update on Barcelona; and preferably (unless all current acquisitions are swimmingly excellent), a new addition. Let’s see if they can do it. This is after all what SHs invested for and will invest for, still.
PS - if a Biotech business is only considered viable with a 2-year runway, then I actually can't think of any "viable" biotechs, Porky, so you might want to look for FSTEs for your investments, whether Stella said that, or not.
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