Member Info for Porky9

Can't read the article in the Torygraph as i don't subscribe but it mentions a float by Oxford Nanopore:-
https://www.telegraph.co.uk/technology/2021/02/28/britain-fights-land-oxford-nanopores-blockbuster-public-float/

Not that it affects us any, its previously had bucket loads of funding from IP Group. They likely see this as a good time to secure a return on investment.
I'm just interested to see how it gets valued. Previously it was suggested something like a PE of X50

I wont be listed on the Bourse that's for sure..

This is in addition to the South African Variant which is equally as Nasty.

We had 235 cases of the SA variant two weeks ago, i don't know the current numbers but its another variant of concern.

Surge Testing using PCR being carried out in locations to identify cases

@troublesome
Agreed
In relation to schools the policy as you say is its a Voluntary test after the first two. A positive LFT will result in a PCR test being carried out to confirm same.
There will be three obvious issues as i see it:-
1. They won't carry out the home test / Or do them properly hence a percentage of infected kids will return to school and pass the virus on.
2. Schools will be sending home "bubbles" left right and centre
3. Infected children will go home and give it their parents

I'm actually surprised with the AZK saliva data just out that this wasn't a selected tool for use in schools? Take up rate would be higher and a more accurate results delivered.

We can only see how this unfolds but i don't see much point in a "voluntary test"

The position in France is actually quite concerning.

I discussed earlier in the week the Horizon program regarding when we will get back to anything resembling normality and basically its proven that the answer is in a formula:

H = I – I/R over E

Put simply; Herd immunity, this being the percentage of people vaccinated in the population plus those with antibodies required to stop it spreading to regain control.

R reproduction number as we know is how quick it reproduces (1 in 3 is the natural level) but a new variant can see that increase to 4.5 or more which is the concern that can affect our current timelines. Then comes vaccine efficacy, how well the vaccine is working.

Now taking the expected AZK efficacy rates they state it would mean that 84% of the UK population would need to be vaccinated to allow herd immunity by November in the UK this year for a return to normality.

BUT a small percentage reduction in efficacy, such as the vaccine not working as well over the next year as expected OR worse new variants coming in rendering it less effective means the percentage of people vaccinated needs to go up even higher. For example, a new variant that spreads quicker and reduces efficacy by just 2% will see our vaccine required rate go up to 97% for herd immunity which is just not likely.

In the UK we have pockets of high virus spread and that is in lockdown so it could get worse as lockdown is lifted but, some areas will for whatever reason, race, religion, belief will not have as high vaccine take up percentages.

So, the conclusion being that we will need to adjust to living with this virus. We can live with the virus without herd immunity, but we need ideally vaccine rates as high as possible and we would need to continually test to keep on top of it and as I keep saying there will be a percentage figure of deaths a year that the government will consider as collateral damage and acceptable that we can live with. I.e., Flu kills 30,000 in a bad year, what would be OK level with Covid?

Finally, we turn to France, if the French are that stupid NOT to trust a vaccine and the take up rate Is that low as stated then the situation there is going to continue even longer not to mention we better sort out rock solid border control with PCR otherwise more will come here straight from France.

It is a bloody mess frankly…

Pork's

My two pence worth:-

Recommended for national authorities
https://www.fda.gov/regulatory-information/search-fda-guidance-documents/emergency-use-authorization-medical-products-and-related-authorities

It's a US term signifying importance at TOP level identification of a material threat, they consider the variants to be in that class and will fast track in those authorities as required to protect.

We have our key appointment in New York plus a number of specific supporting executives appointed. I believe that Dean identified at least four added recently so we are positioning well stateside to capitalise on this region.

Plus, the FDA specifically reduced the approved list removing tests that were ineffective against new variants and of course reducing or removing a number of rapid and tests found to be lesser effective. There were some big names taken out which was surprising.

Then we have the budget going through of which 50 bn USD is specifically for testing allocation. Then the drive in the USA to start a whole genome sequencing program which pound to a penny we will likely support.

Without doubt our stateside sales will be significantly higher than in 2020 but i cant help feel that there is every chance of a sizable "left of field" deal landing, either a strategic partner under white label or some other key reseller arrangement on top of direct sales.

We need to appreciate the size of this market, its five times the size of the UK and France put together and we are right in the middle of it.

Very exciting....

This post is specifically for new shareholders visiting here to research; -

Novacyt is an established diagnostics business currently supplying 150 worldwide regions with over 550 different diagnostics tests in multi sectors.

It has proven technology embedded in the NHS and has recently launched PROmate which is supporting faster adoption. See this information from contributor Poidster: -
https://twitter.com/Porky9Here/status/1359964611114598405/photo/1

It has also recently deployed approved commercial scale products for use in the Lighthouse Labs our national testing centres.
https://www.genomeweb.com/pcr/novacyt-obtains-ce-mark-extraction-free-covid-19-pcr-test#.YDpBak5xc2x

In addition, they support decentralised testing with next gen point of care (POC) testing technologies. Its technologies identify different variants:
https://www.primerdesign.co.uk/products-hub/snpsig-sars-cov-2-voc-identification-kits

It is now CONTINUALLY active in whole genome sequencing; this is to help identify new variants which are vital to support vaccine changes and updates.
https://twitter.com/Porky9Here/status/1365157202454011906

AZK where it has a solid relationship has also worked on other product areas with Novacyt including Saliva tests. Results gathering since last October https://novacytinsider.com/azn-saliva/

Results out currently being reported as incredibly positive.
This is not a short term covid play. Its share price is depressed yet its results are solid likewise its forward earnings. It delivers Results NOT Hype. The company is totally focused on delivering results. See my tweet following conversation with the company.
https://twitter.com/Porky9Here/status/1362417809574293509

Both brokers have restated solid BUY ratings.

Numis Security:
Revenues 317m EBITDA 201m CASH at Bank 279m Fair Value SP £ 13.65

S P Angel:
Revenues 271m EBITDA 173m CASH at Bank 278m Fair Value SP £ 14.33
See: https://novacyt.com/wp-content/uploads/2021/02/SP-Angel-Update-04.02.2021.pdf

It has a solid forward product pipeline but remember these are ADDITIONAL revenues.
https://www.sharesmagazine.co.uk/news/shares/novacyt-outlines-strong-new-product-pipeline

Finally, the talk on this board regarding a delayed LFT. Do not get this confused with the high volume cheap, LFTs (pregnancy type tests) you read about for detecting ANTIGENS.
The Next gen test Novacyt are about to launch is to establish ANTIBODY levels so you know what level of protection you have against the virus.

There is so much more to this business than first glance but above may help.

I remain specifically Bullish here with a significant high long term SP expectation. The BOD at the company are trying to position Novacyt as a solid Mid Cap Business. They have a proven track record in scale and i personally am confident they will deliver on that. But DYOR.

Good Luck

Pork's

With so much going on its easy to quickly lose sight of some significant advances here:-

https://www.genomeweb.com/pcr/novacyt-obtains-ce-mark-extraction-free-covid-19-pcr-test#.YDmnkU5xc2w
Novacyt on Wednesday announced that it has obtained CE marking for a next-generation high-throughput PCR test for COVID-19, called COVID-HT Direct, and is making the test available in Europe and other regions that accept the designation.

"The test is being used by one of the UK’s Lighthouse laboratories, and is being validated for use with private high-throughput PCR laboratory partners, the firm added. A Lighthouse Laboratory is a high-throughput facility dedicated to COVID-19 testing for the UK's national testing program"

It's obviously more challenging with the SP depressed to remain positive, I totally get that. But the business is going incredibly well, its continuing its expansion and delivering results. I remain confident that the H1 figures will be superb and highly likely a number of deals will come over the line and fundamental's will out. Its just a matter of time.

@Jgcw
I appreciate your fed up, just hold the faith. I accept that i try to maintain positivity but that's better than a negative stance which just feeds and supports shorter's.
I would also prefer the SP to reflect a higher price, especially with so much going on but we are where we are. Lets see what the position is at the end of March. I suspect before then we will have some further clarity.
Take Care

Possible
I wasn't expecting any contract award news today but i do think its likely VERY soon.
No business would keep increasing staff for NHS related work if Novacyt were no longer active in this area
So is just a matter of time.
I certainly wouldn't want to be out here that's for sure
GLA

@VanV
Hmmm... Interesting comments. Noted
Please note: My position has not changed. I have always been both LONG and Bullish and i retain that position.
I also retain my price targets
SH are fickle but fundamentals will ultimate out here imo.
GLA

PART TWO

As such I imagine from 2024 onwards bottom-line EBITDA in the region of 200m but likely will be higher with longer term contract deals on an ongoing basis. By this time, we will have an established PE ratio (Not Cash rating) as they will be established as a long-term Diagnostics player not a short term covid play as current. The outlook further proven.

Now as at today Numis has valued Novacyt at between 13.65 per share and 35.00 per share blue sky on the current conservative data.

To reach my £ 54 SP target I need to see a valuation of just over circa 3.5bn which is what I am working on and consider this more than possible. Some Visitors will scoff at this, but I do not care, the BOD have made it clear they are working to and intend to become a MID cap player, they always estimate on the side of caution and I consider they will not only achieve this but will become firmly established in the £3bn to £ 4bn range minimum.

So, I am looking for a PE Ration of about x 18 based on my forward earning calculation from 2024 which I think is VERY achievable.

Meanwhile I can illustrate numerous peer examples that carry a significantly higher PE ratio so the reality is that we could deliver less long-term earnings at a higher PE ratio to secure the same value.

The key to unlocking our true value is PROOF of long-term sustainability and this is now unfolding before our very eyes.
So, onto the take over risk.

GSK have always been touted as the most likely suitor, in its desire to keep pace with J and J with their profitable diagnostics division so Novacyt are an obvious buy.

Equally AZK is working in partnership with Novacyt in numerous ways and the addition of Novacyt would strengthen their business also especially in relation to Vaccine development.

With our market cap so low in relation to these giants and our potential revenues I am see a swift take out at minimum of £ 2 bn as highly likely which is about £ 28

70 million shares in issue and being predominantly private investor owned is why its rocky but II now controlling about 12% I think at last check.

Either way, I see significant upside from where we are today.

GLA

OK I am prepared to share my thoughts here on Share Price valuation irrespective of being shot down by certain visitors and I remain very bullish, so here goes:

PART ONE

As I see it, they are building a multi sector international diagnostics juggernaut with an established network of sellers and resellers into 150 regions. In addition, they are leading the way on whole genome sequencing which supports vaccine development and embedded into the UK NHS where diagnostics which has previously been overlooked will now and in the future continue to grow in all health sectors. This is a high growth quality business.

Their technology is both versatile and they remain ahead of the curve continuing to innovate.

Currently we sit materially undervalued at about half of both broker estimates: -

Numis Security
Revenues 317m EBITDA 201m CASH at Bank 279m Fair Value SP £ 13.65

S P Angel
Revenues 271m EBITDA 173m CASH at Bank 278m Fair Value £ 14.33

To value the company fairly you need to price in its longer-term potential. Currently both broker estimates have the outlook for 2024 and beyond at around the 145m Revenue mark and 65m EBITDA with 465m cash at bank and the market remains pessimistic to outlook still thinking they are a one trick pony and a short life business. Hence the cash rating.

However, I do not share this view, and this is because I believe that some kind of forward arrangement with DHSC is highly likely BUT moreover now we are positioned stateside I believe that USA sales will be significantly higher than forecast and we will imbed further into this market. I also believe relations with AZK and GSK are also strengthening, and partnership deals likely.

The move forward with whole genome sequencing is VITAL to future vaccine development. You cannot have an effective vaccine without mapping the effects of variants and this further endorses their market strength and value.

In addition, I do not believe that the cash pile will just sit there. The BOD is highly experienced regarding scale having done it before and strategic acquisitions will be made for sure to diversify diagnostics. We are seeing white papers in Maternity embryo testing work, Cancer Tumours and even work in Autism spectrum so their products will be far reaching.

From most sectors I have worked with a 20% ROI from acquisitions is what I would expect as norm. Now Novacyt could get it wrong and buy a perpetual lemon or lemons then again, they may buy something off the chart. BUT I see a series of acquisitions being made which will balance risk ratio for them and as such in very rough terms see an absolute minimum of 4 x 20m bottom line = £80m to maybe £ 100m bottom line creation from acquisitions.

Our Tay, always on the ball

https://novacytinsider.com/novacyt-acquisition-moves/

As you research this vast growing field and realise how essential the data from sequencing is for effective vaccine modification it becomes incredibly noticeable how interlinked Novcacyt need to be with the vaccine producers.

I am fast coming to the conclusion that especially due to our materially undervalued market cap we won't get to full value before the business is acquired and this now has AZKs name written all over it - its a total no brainer frankly.

If that DHSC contract lands and further embeds us with the NHS just watch this space, I think they will be targeted us within 8 to 10 weeks tops of any deal.

Its painfully obvious imo - time will tell

The Role of Diagnostic Tests and Sequencing in Managing a Pandemic
https://www.brighttalk.com/webcast/18699/469081?utm_source=Novacyt+Group+Holdings+Ltd.&utm_medium=brighttalk&utm_campaign=469081

PART 3

How we can Treat the Virus

Treatments with patients, c pack giving oxygen, turning the patient over, optimising patient care but now able to save more lives.

Long covid is also now an issue. It is causing Fatigue, heart issues, breathing issues – two to three months later after getting covid issues are showing, specifically in the younger generations.

(Think we will see more on this in due course, its evidently a bigger issue than we are being shown)

When will we get back to normal?

The answer is in a formula:

H = I – I/R over E

Heard immunity ideal, this being the percentage of people vaccinated in the population required to stop it spreading.

R reproduction number how quick it reproduces (1 in 3 is the natural level) but a new variant can see that increase to 4.5 which is the concern that can affect the timelines.

And vaccine efficacy – how well the vaccine is working. Taking the expected AZK efficacy 67% the rate of spread this would mean that 84% of the population would need to be vaccinated to allow heard immunity by November in the UK this year for total normality!!!

BUT a small percentage reduction in efficacy means the percentage of people vaccinated needs to go up. For example, a new variant that spreads quicker can see our vaccine required rate go up to 97% for heard immunity which is just not likely.

The conclusion being that we will need to adjust to living with this virus. We can live with the virus without Heard immunity, but we need ideally vaccine rates as high as possible.

Hence why the government are so concerned about Variants being tightly controlled and why the vaccines need updating to reduce chances of continual lock downs.

We will only know more over the coming months and therefore government have suddenly taken a more cautious stance when quoting timelines.

That just about cover it.

Pork’s

NB. Whole genome sequencing is an ESSENTIAL service. The discussion later today will be enlightening in this regard.

PART 2

Over at AZK where they manufacture the vaccine.

It is essential that they secure the coding sequences from whole genome sequencing to adapt the vaccine.
(Hate to say it but reconfirms that we have AZK acquisition written all over us)

The SA variant is causing issues.

Unless we update the vaccines, they could be rendered useless. Highly likely they will need to keep updating each year like the flu vaccine, but we do not know how long one vaccine can last for. You need the booster jab to booster cells quicker because weaker cells die off the longer left.

(NB. 3 weeks for booster is better than 12, government are gambling better for more people vaccinated at lesser protection rate than more at higher. But on a completely selfish level you want the booster as quick as you can get it for max protection)

How the virus Spreads

Proven that Air travel helped spread the virus.

Without ANY control (no lock down) at all the R rate is 3 this means 3 people infected for every 1 with the virus.

Then we need to look at rate of spread this is the K number.

For example, 43 cases on one flight came from 5 people on it due to K number – super spreaders.

We then carried out to see how super spreading worked using Pigs… wheek, wheek….
Super spreading analysis understood.

This resulted in Surge testing where a new Variant found.

The Concept following track and trace being to quickly find the contact with the virus then trace contacts, the person who gave it you are likely to have passed onto others. So, with backward tracing identify who gave it you and contain and stop you passing it on forwards. Hence Surge Testing with PCR absolutely vital to identify and contain a new variant.
Testing will be a Big Part of our lives going forwards.

They then outline a LFT test, that it picks up high viral load, but a negative test is NOT to be taken as you being virus free and that you need a PCR test for that.

Importance of PCR to identify the variants. Incredibly positive on PCR.

For those that did not catch the program earlier, this is the precis: -

PART 1
Coronavirus is changing Shape.

Infection rates fell last November but in Kent cases were rising. Genome sequencing picked up the new variant that was more transmittable.

Government supported Cog-UK (we play a part in this)

Genetic code loaded to the data base to identify mutations.

Sequencing tells if two viruses are the same or different.

Virus Jumped to 23 mutations then to 37 mutations in a body with a weakness and they discovered the virus when exposed to new antibodies as it evolved mutated more. Some mutations are not much different BUT some can move in different direction and a New variant could go out of control.

Now we are in an immunisation phase the virus will try and adapt again and create new variants to try and escape it, this is the concern and vital we stay ahead of it.

Sharon Pea)ock is introduced regarding Sequencing.

Currently the SA, Brazil UK and Nigeria strains are of Importance but new ones emerging. The key factors that Sequencing is looking for are: -

- Is it more transmittable?
- Will it avoid our immune system?
- Is it more lethal and will it kill more people?
- Could it affect our tests and avoid them?

New variants are now proving to have resistance to vaccines in certain parts of the world. This is causing obvious concern.

The Kent variant for example is more likely to kill us due to the infection rate which is 35% higher however the numbers are lower in the UK.

Absolutely Superb - Love it, Love it, Love it...

It's worth remembering that we didn't have a video at all before. Some shareholders have zero idea what Novacyt does and this is a rapid way of quickly showing that its a real business, producing and delivering products to get the message out.

it was desperately needed and they HAVE listened to shareholder concerns.

Just Brilliant - oh and 150 countries....... what was i thinking,,, i have been telling everyone its 130 LOL