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The article in question, but not convinced its genuine due to antivirus software warning if I follow the link.
GlaxoSmithKline, AstraZeneca, ThermoFisher, Qiagen and Roche are seen as likely suitors.
GSK is regarded as the most likely buyer of Novacyt to bring fast growing diagnostics market into its revenue stream.
Novacyt’s rapid expansion and innovation capabilities puts it on the map for a takeover due to foreseeable revenue and growth prospects. Novacyt has become embedded into the NHS and DHSC networks and has some of the highest margins in the industry. Novacyt has an existing working relationship with GSK since their work together on the UK’s high-throughput lab in Cambridge in April 2020.
With GSK’s global distribution network, together they could become a major force in diagnostics and device technology since Novacyt’s recent acquisition of IT-IS.
GSK’s existing range includes pharmaceutical drugs, vaccines, consumer medication and now sports nutrition. Pharmaceutical drugs have onerous R&D costs with new drugs often taking decades to come to market, if at all. In 2019 alone, GSK spent over £4.5bn on R&D costs. Having a high margin, lower barrier-to-entry, diagnostics division, with an existing and expanding 550+ test range would help to buffer costs and increase group profitability.
Johnson & Johnson, GSK’s largest competitor has a medical device and diagnostics division which GSK lacks, and over 20% of JnJ’s revenues come from that area now. JnJ also quote diagnostics to have greater growth in future than other areas.
BDB Pitmans corporate team advised existing client Novacyt on its £12m acquisition of IT-IS International Limited, a diagnostic instrument development and manufacturing company. The acquisition strengthens Novacyt’s position in the market and supports the longer-term growth opportunity for rapid near-patient testing as well as securing significant IP and expanding the product offering and core capabilities in instrument manufacturing.
BDB Pitmans corporate partner Philip Weaver says: “BDB Pitmans is delighted to continue working with Novacyt as it looks to reinforce its strategy and take advantage of the opportunity that COVID-19 has presented the company as it addresses a drive towards rapid, decentralised testing.
“Client relationships are built on understanding their objectives and ambitions, and we’re delighted to be part of Novacyt’s growth story.”
ShaunP, I have been in here from 1.66 with a large holding so every £1 change now is big money but I am hardened at this game and seen it all before. Too many here jumped on the bandwagon for a quick buck on the latter part of last weeks rise. I am confident it will climb to new highs but do they have the patience that you and I obviously have.
Respect for sharing your research with us all btw.
All nonsense, the markets are volatile all over the world this week, large drops on lots of shares. IMO this is reacting the same as most. Just switch off and come back next week when confidence returns.
Its ironic that the panic is over the increase in the pandemic worldwide which ultimately means more testing is required!!
The share price of Novacyt could quadruple in value to £34 according to estimates put forward by its broker Numis.
After initiating coverage, Novacyt issued a broker note on Friday morning that heralded a ‘new diagnostics leader emerges’.
At the time of writing the share price of Novacyt was at £8.35 – however it later climbed by over 10% following the report which initiated a buy recommendation on the share with a target price of £13.65.
However, the valuation of £13.65 is conservative even by Numis’s own admissions. It notes that this is somewhere between its base and bull case forecast between £9.5 and £15.
Its most bullish forecast could see Novacyt hit £34 a share considering its longer-term potential and recurring revenues into the NHS, contributing to a peak of 1bn EURO in revenue in the long-term.
This would essentially quadruple the value of the shares and firmly cement its status as a mid-cap company (with a £2bn+ m.cap) as CEO Graham Mullis previously outlined to Sharebuyers.
Breaking down its rationale into four areas, Numis highlighted the following points:
First mover advantage which has allowed it to rapidly scale up its business.
A stronger H2 and 2021 with revenues expected forecast anywhere from 380m EUR to over 600m EUR.
Strong cash generation and acquisitions means it will be able to consolidate the wider diagnostics industry.
Longer-term potential as discussed above.
What would be good here is to see an R & D update from the company. The majority of products from July update have been released so it would be useful to see what is now in the pipeline direct from the horses mouth.
No panic here, the markets are down everywhere based on the gathering pace of the virus worldwide, which ironically means more testing is required!!
I would be interested to hear thoughts on the share buyback tabled at the AGM as one point keeps jumping out which I am unsure of the reasoning for.
Resolution 6 of the AGM is quite a lengthy resolution dealing with all of the terms and reasons for a buyback but they have set a maximum price of 12 euros (£10.90) per share. I know we are not there yet but they must have had some idea of where the SP is going when setting it so why set it so low potentially shutting themselves out of a repurchase so close to the AGM. I assume they would need to RNS any buybacks and we haven't seen anything yet.
It may simply be that am I misunderstanding it or does the company not see or foresee the value above 12 Euros? It just seems a very detailed resolution for something that unless they act quickly is unlikely to be done.
15/7, 23:17. NHS Test and Trace has been notified that some test kits produced by Randox laboratories may not meet our required safety standards for coronavirus testing. Alongside the Lighthouse Laboratories, NHS Test and Trace has a separate contractual arrangement with Randox laboratories. As a precautionary measure and while we investigate further, NHS Test and Trace are requesting that all settings pause the use of Randox test kits with immediate effect and until further notice.
Just released, https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/878121/coronavirus-covid-19-testing-strategy.pdf
The Government is setting the challenge to itself and to the whole system - industry, academia, the NHS - to immediately scale up our testing levels to 100,000 tests a day from all five pillars of the strategy, across the UK by the end of this month.
This is a huge ambition. Currently, we are delivering around 10,000 swab tests per day. And we will continue to scale up our ambition beyond this to 250,000 tests a day from all five pillars.
Talking about new diagnostic consortium formed with AZ, Cambridge Uni and a couple of others to reach 30K tests by end of April to include antibodies. Announcement made by Government health minister this pm. Lets hope they name NCYT as one of them as the story develops. Hopefully hear more at the briefing shortly.
Buried in the detail,
The Company also announces that the Republic of the Philippines Department of Health Food and Drug Administration has approved the Company's COVID-19 test for commercial use, effective immediately.