Member Info for Porky9

LOL - very good OB, catch up soon
Take care

My god you lot get up early to start ramping :)

Trying to get my head around this one as based on current SAAS market values it is clearly ridiculously cheap but evidently it's CAC and general cost base are too high hence the obscene level of losses in relation to revenue. This evidently killing the business valuation and dire need for a cash call.

I can see they did some cost restructure but I'm just wondering if this partner first policy as opposed to expanding own direct sale team is what's killing this? Are they paying too much out in partner commissions in relation to the contract value or are they paying too much upfront in partner commissions whilst the end user pays on monthly terms? Something here just doesn't feel right to me but without closer understanding of this partner model its hard to know.

Total bookings went up by £1.4m BUT losses increased by 200k. On closer inspection we find deferred revenue went up by just over £1m so this brings me back to the CAC being too high? Either that or they are not charging enough for the product in the first place?

When you look at that 3 yr University win for example, it works out at just £47 per unit a year, so maybe they are at the maximum price point? or under pressure from competition and having to price it that keen?

To fix this it looks like they possibly need to increase the retail price of the product but if they can't do that, the only other option is to reduce the CAC, maybe reduce the partner commissions or only pay commissions inline with the deferred income? anyone got any thoughts on this?

I'm kind of reluctant to chuck more cash at this, support the next placing, without some changes made to address reducing the CAC or at least an outline of how they will get to the Break even line?

Normally its the old adage of get it profitable by increasing revenues or cutting costs. Here you could argue that adding another £1.4m to revenue next year would see losses widen by another 200k ,so clearly its not winning business that is the issue here its making the orders they get in viable. Perhaps Stuart needs a strong COO appointed to work alongside him or an FD to really get a handle on the acquisition costs?

Will be interesting how this moves forward

PS - Don't shoot me, its the BOD that are accountable and happy clapy "well done Suzy - excellent" update posts don't help one jot. Handling of 201 has been a total shambles and Suzy needs to own it and sort it out.

Ramping at higher levels in 2021 before they dropped the bombshell news they were giving away the crown jewels 201 to a two bit start up without funds for a token down payment - deal still not completed so proves the point - market expectation back then was an expected deal with AZN or similar with at least 10m down being injected into the business for further growth.

De-ramping, if you want to call it that now, at the current 11m mcap because we are now funding a lab start up, overheads have increased massively and there are no immediate catalysts to bring actual cash into the business other than another raise which i'm expecting - the fact that the BOD are not buying is also telling.

They cant get the derisory £1.3m out of THX heck they cant even get £120k out of them to cover bloody lab fees. They expect shareholders to keep indirectly funding THX.

See you at the 5p placing and 50/50 if i support then without board changes, i am now of the opinion the business lacks the negotiating skills it needs, further market conditions for fledgling biotechs are worse than ever.

@Iceman
A both rude and highly patronising reply, you don’t have a clue

You posted with glee 5 or 6 ways for 201 to secure funding, you then posted some utter garbage about how VAL should run an advert in the FT asking people to donate to fund 2m to try and increase its profile.

I have simply given a counter reply why the opportunity was missed at the time, I further gave you a link to a report about the difficulties of small early stage biotech funding. If you are watching the market you have just seen yesterday the effects of the biotech funding squeeze on PYC it’s how it is. I’m suggesting how other small biotechs are trying to ride this storm.

Your issue is that my post is not inline with your current ramping strategy. Anyhow, you will likely request removal of my post anyhow, so what’s it matter, God forbid anyone actually properly evaluates and discusses this investment case

Good luck to you anyhow

@HD
I’m being all mystery and speculative. Jim Milan, PYC, my wild speculation post that got removed. 2 for 1 share swop alongside 5p capital raise, synergies, use of VALs lab, removal of duplication, mutual client targets. It’s business and what I would do.
Of course I could be barking up the wrong tree, no change there eh :)

No, watch this space

Welcome to the BOD Jim, you know it makes sense, let’s explore together :)

Noted
Take Care
Pork’s

@Adam
Well as you are a aware a high percentage of drugs fail even at phase 3 so no guarantees or silver bullet here. On 201 it’s still sitting on the shelf two years after accepting the LOI with this two bit outfit in the states.

What I would say though is that unfortunately for us, it’s not down to shareholders to do their bidding. Business for the labs won’t just fall on us, likewise Pharma partner deals or licensing deals won’t just fall on us either, they will need strong negotiating skills. This is where we fall down.

Look, obviously you know what you want to do, but why don’t you review the forward plans in a few weeks time and if from July H2 if you don’t like the plans, force a resolution to join the board as CEO propose removing Kevin, Martin and Gerry clear out the dead wood, add a senior negotiator, move Suzy over to head sciences and build a dynamic new Board with drive to get this business moving forward. My view is you are going to need to do this sooner or later anyhow and it’s gone on long enough. You would get full backing, you know that.

As Nick says maybe THX will come through in the end but that’s looking grim.

meanwhile results will be out in a couple of weeks showing the increased cash burn unless they delay them and I stand by my view that a capital raise combined with equity swop acquisition deal is highly likely, unless they put out an update confirming the current buy and build policy has been shelved and the first half Acquisition now not going ahead.

See how it all unfolds, good luck

@PM2022
Look you just carry on, ignore to counter my points, get my reply removed, put fingers in each ears whilst singing lar lar lar will be 30p and keep your head firmly in the sand.

The handling of 201 has been at best bloody atrocious, I won’t sugar coat it. Our top legacy asset was given to a potless US start up that has still not been able to secure any funding or pay VAL any money in practically two years and shareholders have paid for that.

VAL are NOT in a position to squander shareholder cash in that way, they are not. They might think it’s a never ending river of free cash but there is an end to shareholder support.

We have seen ZERO evidence as shareholders of ANY stateside fund raising activity by this outfit. I say again, this relationship potentially damages VALs credibility in the market and is the Albatross around Suzy’s neck.

My concern would be that if the 201 negotiations are this p poor, is it the same with 301 are the other line negotiations been as poor?

I put it to you @PM2022 that Suzy is not as Kevin claims “A fierce Negotiator” but is in fact very poor on negotiation, lacks commercial acumen and has little support. This is compounded by the fact that the market has changed, is very difficult to negotiate deals in and VAL need to appoint a highly skilled biotech deal maker to the board that can navigate this market whilst Suzy should be moved to the side to focus solely on the sciences which she is clearly brilliant and passionate about.

I repeat doing the same thing and expecting a different outcome is pure madness.

Meanwhile, chucking more cash at a lab and dreaming of build and buy acquisition plays is all very fine but SH will be paying for that also and you wonder why the BOD are not buying shares - put simply they will likely need to do that at the next placing to show confidence in order to get the deal over the line.

Wake up

It’s time to kill this albatross off once and for all. Leaving this ongoing is not healthy and IMO is damaging the integrity of the business.

Frankly, I think Suzy needs to own it, THX was the wrong partner, call time with THX and look for another financial backer for it. We also need full clarity regarding the position with 201. I strongly suspect that this initial decision was made because either there was no interest in the market to take 201 on OR they didn’t try hard enough to find a backer with capital to take it forward.

What I would say though is that the market has changed, its really tough to get deals for early stage pharma and I suspect this is the real reason why Suzy wants to move more towards a labs based business with regular revenues.

@PM2022 posts constantly about big money sums being paid and why the business should be 3, 4 , 5 times its market cap BUT in reality BIG pharma are no longer paying big sums upfront. The LOI that Suzy agreed to for our legacy crown jewels asset as I see it, was to secure £1.3m in the first year and even at that incredibly low level it still wasn’t executed. The journey now to commercialisation is so long (Suzy now has it at 20yrs) and requires so much cash getting there that securing deals is really challenging, as I say the market has changed.

I get stick about the shambles that was 4D pharma but there are lessons there, even as fire assets in administration they had 14 drugs, 9 at advanced stages, 1 backed by Merck with superb evaluation results and 1 a drug called Blautix for IBS had just secured FDA clearance in phase two close to commercialisation YET even with all that IP, administrators approached 50 biotech’s and 19 financial institutes and ended up selling the lot to a small Korean biotech to go forwards with it for a token fee.

So, the reality situation with 201 could well be that despite it being potentially something great, market conditions and large biotech’s investment stance, outside of Suzy’s control, means that even if Suzy pulls 201 from THX she will likely find it hard to secure an alternative backer for some time.

The best outcome might be for her to go for damage limitation, request a down payment from THX to maintain exclusivity and if that’s not forthcoming, remove the exclusivity and start searching for a new partner again. Tough call either way but some kind of decision needs to be reached now that’s for sure, its gone on long enough.

Pork’s

@PM2022
I will explain why I completely disagree with your post before you have it removed on Monday.

Excluding any acquisition moves, just to shore up working capital runway from the start of H2 in July If VAL were to raise 40m shares at 5p and 10m broker options at same, that would give them about £2.3m after costs – this from a business perspective is roughly what they need IMO on the current business plan.

That is NOT a £5m market cap it’s £7.5m mcap fully diluted as you would then have circa 150m shares in issue at 5p equating to £7.5m.

Barcelona, is NOT a given, we don’t know the outcome yet BUT lets assume it’s a VERY positive evaluation, it will still take absolutely years before any form of licensing and VAL need to be able to fund supporting it until it can be licensed. No money in means VAL need to find it from elsewhere.

You are 45 times more likely to be struck by lightening than winning the UK national lottery, The odds of winning the UK lottery are more than 1 million to one, I put a capital raise here, in bookmaking terms as being “odds on”. Stella has indicated that for a biotech to be considered as viable it must have more than a 12month working capital runway, they have outlined their requirements, they have also told us they are supporting a “buy and build” policy. I don’t understand what you are not getting? VAL couldn’t be clearer. A placing will happen, the question is at what price?

The SP of the previous raise is NOT relevant. You have to consider what someone is prepared to risk to invest for upside. Funds are NOT rushing in here most of the shareholder base is all private, there are loads of businesses currently competing for cash, the market has changed, smart money is not rushing in here, I don’t agree with you.

Suzy and Kevin are NOT at risk of losing their jobs, the update on Friday was “an excellent update – well done Suzy” so as I see it, AGM in a few weeks time, resolutions for re-election get passed simples. Acquisition and capital raise AFTER. Stella and other BOD members may invest alongside the next raise to support it. I don’t see any reason why they would buy stock now in the open market knowing a further issue is planned.

You constantly quoting “we should be 25p/30p by June” is purely emotive, there is no basis for a triple of the market cap in the short term. Results statement will be out in the next week or so, unless they delay it and it will show increased cash burn, it cant show anything else, Overheads are expected to be 28% higher going forwards. The share price is more likely to drift unless Adam wants to buy some more again to help hold it up.

Lets see what happens, my call is that I’m still expecting to see a proposed acquisition with capital raise alongside – could be completely wrong.

Pork’s

@Adam
To be clear, I think the current strategy to build a level of ongoing income from labs rather than rely on the highs of licensing money as Suzy put it, is the right call. I just think this is going to take a number of years to do. They have to go out and win this business then learn how to invoice and collect it. So far they haven’t invoiced anything in over 10 years. ZERO. This is a start up. Do they actually know how to raise an invoice?

To go from Zero revenue to £3m revenue to cover all costs and break into a profit is going to be a challenge as I see it and take a few years and further investment to do.

I have no qualms on the science side, I don’t think there is anyone more passionate about sciences than Suzy. It takes a special kind of someone to get excited about peptides and that’s Suzy. Big tick box, but she is not a negotiator and not a strong CEO the decisions made to date prove that conclusively, so they either add a strong negotiator to the board or she is moved to head sciences which she is brilliant at and a new CEO is brought in.

I refer to the ramping squad here because during LSE trading hours, any posts questioning the concept by anyone are being requested to be removed. So the forum just looks like a sea of positivity and that’s not good. As I always say in business “you don’t know, what you don’t know” so if issues are ignored and not explored its business as usual doing the same things and expecting a different outcome.

Finally, being a tad more honest; would I want to buy in at 4p? not sure frankly, the investment case would need to be compelling. I believe I would have a far greater chance of a ROI at that level than 10p for sure, but the past history here really isn’t great, spend, raise, dilute, consolidate and I expect more of the same. Many investors currently view it this way, hence the short term trading.

Good luck anyhow.

Pork’s

“No eggs, no money” I like it, must remember that one :)

No accountability what so ever, none of this is insurmountable but the status quo continues. Doing the same things and expecting a different outcome is plan stupidity.

My views dont fit with the fan club here but I consider the risk profile has changed significantly, I see the Share Price as expensive in relation to the short term (1 yr window) upside potential. shareholders are now funding a lab start up which is where the focus now sits (Q update opened with the lab) and this needs more cash for sure.

Kings is a positive as it has third party drivers but in current market conditions suspect it needs at least another 18 months.

You all know my stance that a quick board re-election end of June then hit with 5p placing in July to bolster working capital or it wrapped up in an acquisition deal. I see no catalyst for inbound cash before then other than from shareholders.

As a long term play, there are some outs, Suzy needs to regain control of 201, its now damaging their reputation as I see it.

Also, If they are not continuing with buy and build they need to state that. But despite what posters here think I believe that buy and build will happen at ANY price. The focus shift is now on building out the lab business for long term growth not short term share price growth for long term holders.

The fact that the board and 201 has had probably north of 10m of shareholder cash chucked at them is considered as irrelevant now, it’s well in the past... dam shame as I believe 201 has massive potential but it now looks like they either couldn’t find a buyer or didn’t try hard enough and got sold the dream by a sharp suit.... perhaps, who knows. Some open clarity on 201 would go a long way to restoring investor confidence.

Good luck

What this whole debacle regarding 4D tells us is that realistically the valuations that the brokers assign to these AIM plays often bares no resemblance what so ever to realistic company value. Never has it been truer that something is only worth what someone will pay for it.

Parking to one side the atrocious management, cash burn, ten years of development funded by shareholders and wasted cash etc etc etc in terms of actual drug pipeline assets, this business had 14 drug lines, 9 of which at significant advanced stages towards licensing and commercialisation, One of which had recently secured FDA clearance and was on the cusp of a licensing deal. These drug lines were backed and partnered by some of the biggest names in the industry.

When they raised £18m at £1.10 SP investors were being told investing in these drug lines could result in possible cures and help for some of life’s most atrocious illnesses. One drug line alone could be worth £100m plus in licensing. Yet the stark reality is totally different.

The Interpath report on page 4 tells us that 50 large and medium Biotech companies were approached, remember that Merck were even a partner to a drug supporting their Keytruda drug doing $22 billion sales per year, there were 19 financial biotech players and despite some initial interest NONE came through with final offers. Not one. Nobody wanted to bid for ANY of the IP.

We now know that a two bit small Korean biotech has acquired all the rich IP assets for a token fee yet by my very rough calculation there has been over the years north of something like 100m of investors capital to get these drugs to the current stages.

There is no answer to this really and there will be a heck of lot of investors giving fledgling biotech investments a wide birth knowing that not only are the chances of success limited in most cases but even when the outlook is strong, big biotech are no longer paying decent upfront licensing fees, they only really want to pay after everything approved just before commercialisation. If the biotech goes bust in the meantime, they can pick up the IP for a token fee if they want it.

At this rate biotech investment will continue to dry up, perhaps some extra tax breaks or something could help but certainly MMs should be materially reducing placing valuations that’s for sure. Often they are miles apart from what that IP is worth on the open market. The outcome here certainly endorses that point.

@Laura2022
Are you connected or in close contact with this business or Just an outside prolific investor that likes what they are doing?
I ask because i think there may be a specific reason for the mark down today and wondered how close you were to the operation
Best Regards

Do you rely want me to Andy? Not a good idea
This ones going to be a long journey
You take care now
Pork’s

Can i respectfully point out that Valirx are under no obligation what so ever to update on a quarters Scientific progress.

Yes, it would be nice, Yes it would be good to have regular updates and a road map in this regard but officially they don't need to. It's NOT an AIM reporting requirement.

Suzy would be well within her rights to update progress alongside the results statement which is normally issued in the first couple of weeks of April if she so wishes. That might be her plan, who knows?

A number of posters here are simply complaining and getting heated in this forum because of the likes of Iceman (now patient investor) and PM2022 posting comments that the update is tomorrow, next day, next day etc etc and they "have a feeling" its going to be good blah blah.

It's going to take time....

DYOR