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That is interesting. Not a competitor to us but they’re expecting £600m to $1bn sales this year and valued at $5bn.
Just goes to show where our SP could head once the contracts start rolling in
Avacta have two divisions, testing / diagnostics (principally focussed on Covid-19 right now) and therapeutics (principally focussed on cancer). We have three Covid tests, BAMs and Elisa have some potential but its the lateral flow tests that are most of interest right now. We announced early results a month or so ago showing our LFT to be much higher quality than the Innova test that is currently being bought for £billions by the UK government. The Innova test is also Chinese and the UK government are committed to a UK / sovereign test. CE marking and final validation are expected any day then the door could be open to millions of sales a week. The anticipated sales price is circa £5-7 (more to private organisations) and analysts have quoted a 35% margin expectation. The reason the test should be so good is that it uses our proprietary Affirmer technology (put simply like antibodies but much smaller, better and cheaper), no one else can produce a test using this tech so there is also lots of potential to licence it around the world.
The therapeutics division is even more exciting though not as immediate. It is based on two platforms, Affirmers (as above) and Precision. Both have rock solid IP. The most exciting use cases are making existing chemotherapies better. Basically the tech allows a drug to be much more targeted in the cells it attacks so existing drugs could be used in higher doses and for much longer. A huge advantage here is the scalability and the relatively fast time to market as it makes existing drugs much better. Many (myself included) believe the therapeutics business could / should be worth many billions in the years to come,
In addition to the above we have numerous partnerships worth £hundreds of millions with major pharma companies keen to use our IP in numerous areas. Check out LG Chem and Daewong (two huge multi billion South Korean pharmas for examples). We also have £50m cash in the bank and the expectation that LFT revenues will mean no further fundraisers ever needed.
That’s a summary. Now check out these Twitter feeds for high quality analysis:
BBN: twitter.com/bigbitenow
Myles McNulty: twitter.com/MylesMcNulty
Ophidian: twitter.com/Ophidian18
For a detailed overview Myles (a former professional small cap analyst turned investor) wrote some excellent papers last year. I’d strongly recommend the update two part three as a comprehensive overview of the value in Avacta: https://aimchaos.com/category/investment-notes/
Finally if you do nothing else watch this recent interview with the CEO: https://youtu.be/lzenLmpNhxs
And this was with the shoddy tests already out there.
We know from early results Avacta’s test will blow the performance of these out of the water so can expect even better results.
Great news for Avacta as this large scale study shows the value of LFTs in controlling the pandemic.
https://www.medrxiv.org/content/10.1101/2021.03.31.21254687v1
Just going back to this.
The Surescreen contract is for 20m tests total.
There have been no new Innova buys and we know this test is relatively poor quality suggesting the government are running down the stock they have.
Mologics test is out there but doesn’t look great and hasn’t secured orders. If it was going to be bought up on mass ODX would be producing it now (they confirmed they were waiting to be told which test to produce for the government).
The few other tests on the market around the globe are in short supply, highly priced and not available in anything like the volumes the government are quoting.
So where are those massively volumes going to come from?????
We are days at most away from showing our hand with final clinical validation, manufacturers (announced and hinted at) are lined up. Time to step forward Avacta
Given the new tax year and the news over the weekend of the government wanting all adults to take two lateral flow test a week I assume we will have new investors buying and researching today. Here’s some info to help.
Avacta have two divisions, testing / diagnostics (principally focussed on Covid-19 right now) and therapeutics (principally focussed on cancer). We have three Covid tests, BAMs and Elisa have some potential but its the lateral flow tests that are most of interest right now. We announced early results a month or so ago showing our LFT to be much higher quality than the Innova test that is currently being bought for £billions by the UK government. The Innova test is also Chinese and the UK government are committed to a UK / sovereign test. CE marking and final validation are expected any day then the door could be open to millions of sales a week. The anticipated sales price is circa £5-7 (more to private organisations) and analysts have quoted a 35% margin expectation. The reason the test should be so good is that it uses our proprietary Affirmer technology (put simply like antibodies but much smaller, better and cheaper), no one else can produce a test using this tech so there is also lots of potential to licence it around the world.
The therapeutics division is even more exciting though not as immediate. It is based on two platforms, Affirmers (as above) and Precision. Both have rock solid IP. The most exciting use cases are making existing chemotherapies better. Basically the tech allows a drug to be much more targeted in the cells it attacks so existing drugs could be used in higher doses and for much longer. A huge advantage here is the scalability and the relatively fast time to market as it makes existing drugs much better. Many (myself included) believe the therapeutics business could / should be worth many billions in the years to come,
In addition to the above we have numerous partnerships worth £hundreds of millions with major pharma companies keen to use our IP in numerous areas. Check out LG Chem and Daewong (two huge multi billion South Korean pharmas for examples). We also have £50m cash in the bank and the expectation that LFT revenues will mean no further fundraisers ever needed.
That’s a summary. Now check out these Twitter feeds for high quality analysis:
BBN: twitter.com/bigbitenow
Myles McNulty: twitter.com/MylesMcNulty
Ophidian: twitter.com/Ophidian18
For a detailed overview Myles (a former professional small cap analyst turned investor) wrote some excellent papers last year. I’d strongly recommend the update two part three as a comprehensive overview of the value in Avacta: https://aimchaos.com/category/investment-notes/
Finally if you do nothing else watch this recent interview with the CEO: https://youtu.be/lzenLmpNhxs
Oh and check out this article from a few weeks ago: https://www.huffingtonpost.co.uk/entry/five-minute-covid-test-nightclubs-moonshot-plan_uk_602fee6fc5b67c32961d49a
Myles agrees. On Twitter just now:
Re: the LFT - so much noise over Easter weekend about the NHS' 2-year, £37bn T&T programme, with ~80% of that to go towards testing. Assume 75% of that (at least) goes towards LFTs.
That doesn't account for the private UK market.
Then the public and private RoW markets.
The market for #AVCT's - hopefully soon-to-be-launched! - LFT is essentially unlimited for the next 1-2 years.
Just reposting this from yesterday:
Twice a week LFT tests for all
This is the main news story in most news outlets today, heavily trailing what Boris will be talking about in tonight’s press conference. Pretty clear that frequent testing, not vaccine certificates is the key to the next stage of unlocking.
Follow this to it’s logical conclusion.
Twice weekly tests = 100m tests a week / 5bn tests a year
The contracts will go to the providers with the best test (Avacta, obviously in my opinion)
At £2 profit per test that’s a potential profit pool of of £10bn a year (versus our current market cap of circa £650m)
And this is just UK only, now imagine USA and EU with a combined population more than 10x the UK follow suit!!!
And this is just for one year and we all know regular testing will go on much longer than that (even if not as frequent think about air travel, cruises, conferences, high density offices, etc).
The sky is the limit and it’s all about to fall in to place. Good luck everyone, hope we all enjoy the ride
We know there is massive demand for the sovereign test - a potential £200m a week profit pool (£2 per test) for whoever can provide the best UK made test to the Uk government.
We know Surescreen and Mologic aren’t getting anywhere near those volumes. It’s also highly unlikely that Innova are getting them as that could easily have been announced and a new contract issued - very tellingly it hasn’t been.
All the clues point to Avacta. Just need a little more patience!
Oh, and we now also now have a highly convenient agreement with a major distributor. Do you really think the Elisa test will be all they are selling for us? This ticks off one of my last remaining concerns, how we will be able to distribute outside the UK without a global sales force. Now solved.
Very, very good things come to those who wait.
I’m most excited in the short term about the UK news of 100m tests a week but a couple of people questioned my comments about scaling to EU / USA / other countries so just to add:
Three possibilities here. Either
1. We produce enough via Asian manufacturers that we sell to them directly
2. Other manufacturers in those countries produce our test under licence and distribute locally (we know it is made of standard parts)
3. We simply sell the reagents having shown they are the best in the world in the same way that Intel sells chips as the most valuable part of a computer
All are possible. Two and three seem the most likely to me but in any case only someone very short sighted would rule out massive international opportunities if we can capitalise on massive domestic ones and show what Affirmers are capable of and how they can control the pandemic.
It is realistic to imagine a world where hundreds of millions of tests with affirmers in them are manufactured and sold every week and it is realistic that at least a very high proportion of that demand could go on for some time
This is the main news story in most news outlets today, heavily trailing what Boris will be talking about in tonight’s press conference. Pretty clear that frequent testing, not vaccine certificates is the key to the next stage of unlocking.
Follow this to it’s logical conclusion.
Twice weekly tests = 100m tests a week / 5bn tests a year
The contracts will go to the providers with the best test (Avacta, obviously in my opinion)
At £2 profit per test that’s a potential profit pool of of £10bn a year (versus our current market cap of circa £650m)
And this is just UK only, now imagine USA and EU with a combined population more than 10x the UK follow suit!!!
And this is just for one year and we all know regular testing will go on much longer than that (even if not as frequent think about air travel, cruises, conferences, high density offices, etc).
The sky is the limit and it’s all about to fall in to place. Good luck everyone, hope we all enjoy the ride
Also, quick question for Starbright.
I know trades above certain thresholds can be delayed before they are printed but don’t they still have to be printed with the time they actually happened even if they are ‘published’ later? I.e. yes a trade could have happened on the 25th and been printed on the 26th but it would still have to say it was done on the 25th. I have seen this many times
Two thoughts.
1. There aren’t actually that many shareholders who have £2m worth of shares to sell in one go. It’s not going to be Ruane and Premier Mitton always sell in smaller chunks (as would many holders wanting to sell without driving the price down). There could be others as it’s below a TR1 level but there are unlikely to be many contenders who are able sell quite that much.
2. It’s a round number in pound terms (£2m). That to me suggests it’s more likely someone has said ‘I want to invest £2m’ than ‘sell down my holding by £2m’ which would leave an unknown amount left (presumably still a decent chunk to make it worth leaving some). If it had been an uneven amount of money it would have looked more like someone selling out but it wasn’t.
Looks suspiciously to me like someone has thrown £2m at Avacta just before news but I suppose we will never know for sure