Member Info for Porky9

@Laura

Hey, there is no getting away from the fact that Jim is an honest broker, I totally get it. He projects as a thoroughly decent and professional guy, working incredibly hard and he is clearly passionate about Physiomics.

I have total admiration for him, its really not easy, he is making a difference and that's to be applauded and now he is battling against a turning market on top to add to his stresses - its really not easy and for what its worth he has my total respect.

I can tell that you are aggrieved by some of the comments here and understandably so, but the investor community as i see it are done with JAM tomorrow no matter how succinct that's presented. There is kind of a end to shareholders support especially after years of non delivery and more so where there is a market downturn in addition.

Its clear there has to be a cash call now, they have no choice and I'm not sure what their options are frankly. I just hope that Jim can steer a way through this.

They deserve to continue this journey but as i see it the market is perceiving them, rightly or wrongly, as falling into a lifestyle business category rather than an up and coming highly scalable future growth business. It's difficult to change that perception this late on but that has to happen.

I wish you well with your investment, you are clearly heavily invested here, i can see why as we all like to back the people behind the business and Jim is VERY investible but there has to be more than that now at this stage and with a £660k revenue expectation for this FY and a cost base of circa £1.250 m its going to take some serious work to resolve this.

Good luck

It took me a while to recognise the business model here: -

They are primarily a consultancy business and charge project-based fees. The Virtual Tumour software is primarily used as an in-house tool to support these client projects.

IF they were simply a software business on an annual recurring license you would be saying a) what’s the Lifetime Value of the client b) What is the Client Acquisition Cost and c) What is the Churn. You would want a) as long as possible, b) as low as possible and c) as low as possible and these metrics would give you a good idea of the growth potential of the business by building on a solid base of fixed price recurring renewals.

But unfortunately, this business model is not that simple. The problem Jim has here is that a drug development program only lasts so long, they must keep winning new clients to replace expired ones hence churn is higher, and their client acquisition costs will be high as this is a high touch process, each prospective client would need significant time invested to tender and win them. I would go as far as to say that scale could also be a factor as its so specialist, it wouldn’t surprise me if Jim is required on every tender? So, this really hampers growth.

The steps taken to ensure they were not reliant on just a couple of clients was a good move IMO albeit late in the day, but we can clearly see now over the years that scaling has been almost impossible with the delivered annualise growth being lower than ideal year on year.

Now we have gone into a biotech funding drought period, these sorts of projects are even harder to win, the installed client base is being squeezed and client acquisition costs are still too high.

So far to date they have never been able to get the revenues high enough to cover their base operating costs despite Jim drawing a modest salary. So, I’m not sure what the answer is here; clearly it doesn’t take Einstein to work out they can only either add more revenue or reduce the base costs or a combination of both to break even.

It just kind of feels to me that merging this business with another offering complimentary services is the only way to go as it would drive down the base costs by removing duplication and reduce client acquisition costs if they can cross sell? I’m not sure just chucking more cash at this in a placing is the answer.

Anyone know how successful their competitors are? What are they doing compared PYC? Jim’s certainly got his work cut out that’s for sure.

Pork's

@Uncanny

PYC offer consultancy services and they have desperately tried to add lots of smaller clients so that they no longer rely on a couple of large accounts as previous. This has gone well however the two largest client's due to the biotech funding drought effectively put the accounts on hold and not continued hence the fall in revenue this FY. Yesterday they confirmed this was the reality and also impacted by data delivery.

201 has nothing to do with this. They signed to Valirx for 201 on a "future" commission based deal almost two Financial Years back. 201 is worth exactly £ 78k of the £1.3m they would pay us in the first year post sign off if it ever landed. This is NOT in the PYC forecast.

I do however think PYC would be a good acquisition for Valirx, there are many synergies and i actually thought Valirx would make that move rather than the strategic partnership deal they announced earlier.

If VAL announce the placing request at the AGM shortly similar to the previous time, rather than rush to dismiss, there just needs to be an adult conversation regarding the plans for this and if its enough to get to self sufficiency without further raises.

Good luck, got to go, got letters to post :)

Pork's

I think Jim should join the board at Valirx and they do a share swop. Co-share resources, reduce costs and increase bottom line.

Both Coys would benefit IMO

God Knows - Jack Russell maybe???

Making 2 + 2 = 144

@Nick

I am NOT some bloke called Russell, How absurd

I have no desire for Valirx to fail, not at all, quite the contrary, i want it to be a roaring success but researched enough to recognise changes need to be made for that to happen.

If you want this BB to just be an echo chamber, i totally get that. However the success of the company is 100% down to the decisions the board makes and nothing else matters and things need to change.

They made the call to put 201 with a start up that can't even pay £10k let alone fund the millions required for early phase 1 trials. Almost two years later still in that position. That's time wasted and hasn't helped any patients, its a travesty in my opinion, a decision needs to be made on THX for sure.

I didn't make that decision to go with THX, they did, so direct your anger at the business not other investors.

Some of you here, Nick included are just desperate. You know full well the business is due to raise, they have no option and you are more concerned about dilution than you are about the business being a success or not. They already outlined that they need the headroom.

Your suggestion i might want the business to fail is totally disgusting, if they go on as they are you could end up in a situation where the Share Price is north of £1 but unfortunately its after numerous further share issues and consolidations.

This business could do well in the future and make a difference BUT it needs more capital now. It makes no difference to Valirx if they raise £2.5m now at 5p or even 3.5p back at April 21 levels. No difference as long as they get the cash.

It only affects those that don't want any dilution but the business will be better and stronger for it. Likewise if they did a share swop with PYC. The business would be stronger as a result.

Its the constant raise/spend/raise/spend/consolidate cycles for working capital i want to see an end of. When they do this next raise, i want it ideally to be the last one.

BUT be absolutely clear on this, the situation will be far far worse if they cant raise and run out of cash. so some here need to get real, its a business.

We see shortly what they have to say

In the spirit of good fun, lets bring the PYC debate back here again....

Come on, no brainer.....

Today's RNS helped crash its market cap further now sub £2m, Got to be a deal there now??

Would kick our revenues off at £650k

Streamline both sides

Add Jim to our board who is a really decent guy IMO

Still need to address our own issues but if we could get a share swop.

Say 4 PYC shares for 1 VAL share

To run alongside a placement?

I think there is a deal there i really do......

@OB

Have to say despite all the banter and theatrics in this forum, you really are a top guy.

Take care now

Pork's

To be fair that was well funny @OB

I forgot, in between my postie round, I'm also doing Claire, although its more off than on these days...

LMOL

So I'm a bloody postie now, just brilliant.

Yours Postie Russel

How did that get 84 likes, got to be a computer glitch.....

@Crofton

Oh I enjoy reading his/her posts, let’s face it most of these BB are just echo chambers anyhow. You just have to do your own research, same old same old

Take care

What are unforeseen “delays in data delivery” ? Anyone got any ideas?

I get the market hold up on contracts due to the reduction in biotech sector funding but whats the data delivery delays all about?

Bet Jim is more frustrated than anyone, seems like a real honest broker to be fair.

@Nick

Firstly, if you are such a fan and it’s such a great financial buy with the BOD and everything so amazingly rosey buy your 6% back - go on big boy, its a no brainer you will make millions?

You won’t because you know the reality, now is not the time. You just want to sucker people in pre placement to try and reduce your dilution risks.

Secondly, I do not want to see any biotech fail. This one won’t fail either. It will just take a lot longer. It will need more cash for certain as per the plan and it will complete more raises, matters not to the BOD what price they are at 10p / 7p / 5p / 3.5p/ 1p / .5 of a pence, .001 of a pence etc etc. It doesn’t matter, they don’t hold any stock so who cares exactly?

Oh you do, worried about a bit of dilution, there has been three consolidations. They have had five raises with Suzy as CEO and about to have a sixth. That’s the reality.

The current plan, the way the business is run will require more cash, end of.

You want to change direction, see things run differently, you need Adam to start and support that change.

Tell you what I will do, if Adam doesn’t like the forward plans end of June and decides to launch a move to become CEO I will back him. I will invest alongside if his placing is the last one and will pull in some contacts to consider making declared positions. But I’m not doing that until I’m sure the board structure is right.

I’m just not supporting this current lifestyle spend/raise/spend/raise/consolidate policy they won’t move away from. We need to see change IMO

@IronMighty

With respect, it’s business not a personal decision they need to make

The current business plan is costed and the cash burn requirement published

Unless they change that plan at the AGM shortly this is what we are working from

I state again clearly: There is not one event that will bring in immediate cash into this business to support the forward plans other than a placing, its that simple.

The glimmer of hope you have is if THX gets funded and they pay us the £1.3m due and I just don’t see that as likely in the short term especially in these markets. Outside of that it’s limited.

As I say, we will know soon enough

@PM2022

Have to hand it to you, that’s one incredibly written pieces of spin, you should get a job in government . Not going through each point again as we have debated this to death but none of the board are buying for a reason. Let’s see how events unfold

£2.5m before costs + Current cash at bank, unless audited result statement delayed and due any moment shows increased cash burn = 18 month working capital runway.

Now if they got the £1.3 m from THX in it would half that but it’s looking unlikely

Not long to find out

@Nick

Already told you, don’t come that with me

201 isn’t helping anyone anywhere. It was given to a start up that can’t even pay us £10k let alone fund the millions required to set up the early phase 1 trials

It’s sat gathering dust for practically two years whilst we wait and still wait on THX

@IronMighty

YES, they do. Ideally they need a two year cash runway. If they secured £2.5m it would give them a 18th runway from H2 with the cash they have left this year.

That’s the reality and Stella has said same.

Let’s just see what they have to say shortly.

Half the trouble with some of these forums is they have just become echo chambers with nobody actually prepared to consider any analytical view that’s outside of a pro ramping agenda.

@Uncanny

Sorry, unless i have missed something, where does it say that lab revenues begin in H2? The CENKOS report clearly states that set up of the lab completes in Q2 and they will work on own transferring projects inhouse before enhancing services and offering to third parties. No revenue forecast until into 2024.

The RNS on labs 1st March confirms same and likewise the the Quarter update 31st March. Its clearly set up first then own projects.

Don't get me wrong would be nice if they could get something in, £10k from THX would be a start but will need a lot of lab contracts to make up £2.5m revenue for a start up that's for sure.

Anyhow we hear directly from the horses mouth soon...

@IRonMighty

To be fair I agree you didn’t vote down the resolution without good reason. If they were to raise more cash you wanted to know why, they were suggesting acquisitions as part of buy and build, understandably you wanted to vet and vote on such actions.

However, unfortunately more time since has been wasted, Suzy has stuck by THX through thick and thin because she “likes working with them” at the detriment of Shareholders. They are no further forward with funding and again Shareholders will need to pay for that because cash burn has continued during that time and we are no nearer seeing the colour of their money.

To clarify: Now the required raise is not for an acquisition as part of buy and build but solely to support WORKING CAPITAL .

@PM2022

Now you are being ridiculous:-

They are burning more cash than they have ever done, you are funding all the historic stuff and now a lab start up business. Did you really sign up for that?

The lab is not scheduled to bring ANY cash in until into 24 and it will likely start small, it will take time, sales and marketing and more cash to get right. You keep saying mid next year, no it’s not. From H2 they have circa a 7 mth runway. FACT.

They can’t leave the placing to the death and you are totally deluding yourself if you think investors in this climate are going to fund a placing at a premium - seriously they will struggle to get a placing at all, if they get it away at 5p that’s a good days work frankly. Not what you want to hear but realistic,

We will know soon enough anyhow but I don’t see any event that can bring cash in. The current cash burn is about two and half million a year. The initial consideration money from THX for 201 was only going to cover nearly half of that and they couldn't get that over the line.

I appreciate my post is harsh but they need a serious review of the business plan, focus more energy on the the pipeline not the lab and we really do need some board changes imo. On a positive, none of this is insurmountable but it needs a significant focus. We need to get Adam on board for a start.

Let’s see what they present and go from there

I don't think its a case of Suzy doesn't care, she lacks commercial acumen and is reliant on those around to advise. She is superb scientist, the business is better for Suzy but not in the CEO role. You don't know what you don't know.

As it stands, we do not yet have the audited year end figures but IF the cash burn is not worse than forecast they will have circa 7 months cash runway from H2. They really can not risk leaving this until lights out, its better to at least address this now. Or make short term cuts to extend the cash runway? This is the reality. Suzy has to deal with this, its a tough call.

IMO, they need a raise of £2.5m to give them a good solid 18 mth runway to get the lab covering costs or one of the legacy lines to support with a cash down payment, its that simple. They have been honest as i said about requiring headroom to issue future shares for the current business plan. Its business, its how it is.

I stand by my call: -

40m shares at 5p placing and 10m broker shares at 5p for current shareholder to raise £2.3m after costs and I genuinely think this will be a tough call in the current climate.

lets see what happens.

Pork's

@PM2022

Here you go again, dragging up 4D Pharma. The CEO lied to Investors, that’s right lied to them in saying they had a 24 mth cash runway because of available loan capital from Oxford Finance when in reality the company was in breach of covenants, the finance got pulled and that’s what led to their rapid demise. But that has sod all to do with Valirx.

On AIM half the time, what they don’t tell you is more important than what they do tell you frankly. I would actually argue that point here. Why is Suzy NOT telling us about 201? Do they need more time to evaluate with Barcelona or Hokkaido? Either way we want to know.

As for funding, frankly Valirx have been incredibly honest, they told SH before they needed headroom to issue more shares for the current plan. The business plan is the business plan unless they change it at the AGM it still stands including Buy and Build.

And as for fiscal control, I would actually argue the opposite; the FD Gerry remains and he resided over the first crash, he was also here when Suzy took the business to the wire and needed an emergency raise.

There were about 15 raises and three consolidations under the previous management, zero revenue generation in as many years and there have been five under Suzy’s control with a sixth due soon. I would say, when Suzy first became CEO fiscal cash control was reasonable. Now cash burn is significantly higher and they have increased cash burn during a biotech funding drought.

They have their reasons and I look forward to hearing them together with the forward plans shortly.

Pork’s