RE: Peer Group Average - £ 52.1m19 Sep 2021 16:45
Hi again,
You will be relieved that I’m off Carp fishing tomorrow so you will get some peace from me…. LOL
I just wanted to raise the BEAR argument that I have encountered from one of the previous shareholders no longer invested and to just clarify why I’m backing this Biotech. The argument was along the lines of why I was bothering to invest here when, to quote: -
“Val, had nothing, has nothing & is way overdue on timeline promises, they just appointed another broker with a seriously over generous offer & they have Little cash in coffers so Why invest there”
Well, I’m not ignorant to risk, I have well researched this company and other Biotech’s, it’s a fledgling biotech business hence, the AIM market and not the FTSE and I consider it ABOVE average in this sector.
Don’t get me wrong, I would be mighty miffed if I had brought shares at the back end of 2016 at £ 11 and now, they were worth 30 pence. Likewise, many shareholders averaging around the 55p to 70p need the SP to more than double just to get back to square one again. I get that.
But investment in Biotech’s on the AIM takes time. If you want a sure thing, go and back GSK or some other Major. To invest in an AIM stock, you must be prepared to give it time to mature. On average it can take north of 7 years from concept to market to complete phases.
Now, the previous management team made a royal hash of running this business, raise after raise, wasting cash like a man with no arms, but that is now resigned to history. Its in the past, they can’t change that but its now a totally different business doing things differently with a different team.
From an investment perspective from today: -
a) Is the management team solid with clear focus, hell yes.
b) Have they got any projects near licensing that could eliminate the chance of another cash call, hell yes, potentially 3.
c) Have they enough funds to meet the current objectives, hell yes: by end of Q1 end of March 22 they would need to raise more money IF no licence deal secured – That is our risk here. But they have indicated they are working to get a deal over the line, hence, should be avoidable.
d) Always late on timelines, well that’s historic, we have just gone through a major pandemic, the new management team have outlined their plans and a full presentation will be issued shortly. I repeat this is a different business to what it was.
e) Another broker appointed at a significant fee, well yes, can’t argue. Its a tidy fee but unless the SP rises, they earn nothing. If the SP rallied to £ 1.22 after a deal they could earn as much as £4m next year. Well frankly, if that happens, they are worth EVERY penny and nobody, but nobody here will be complaining I can tell you!
So, in closure, why am I invested here; well, if I didn’t think I could make a good Return at this level I wouldn’t bother. I’m joining the party later in the day after much of the hard work and restructure has been completed. But what
Sign In
Follow the stocks
