The latest Investing Matters Podcast episode featuring Jeremy Skillington, CEO of Poolbeg Pharma has just been released. Listen here.
OK, this thread has taken a weird turn with more trolling and then people getting angry about the trolls.
Trying to get it back on topic. I stand by my calcs in the original post of a likely market cap in the near future of £1.2bn to £4bn from the first successes with the LFT with some pretty lofty potential upside above that if everything falls in to place. For what it’s worth my hope is we get to over £5bn with AVA6000 success following LFT success in about 12 months and see takeover talk at that point pushing it further but there are lots of (positive) ways it could play out.
Really interested to hear others (constructive) builds on this.
A lot of nonsense clogging up the board today,
Anyone have any thoughts or builds on these comments about possible valuation. Particularly interested in any thoughts on how you think the SP plays out over the next 6-12 months based on the below.
Great to see. Further confirmation to Mologic will not be the ‘sovereign test’. We know Surescreen have a small contract that has already been awarded. That leaves just....
There really does seem to be no one else in the running now
It’s hard to put a value on Avacta right now as there is so much potential and a few variables that could really blow the SP up to huge numbers but here are some thoughts as we await next week’s (hopefully Monday) announcement.
Clearly the LFT is the biggest variable - both on volumes and margin. I’m assuming that we announce next week we have clinical validation in line with what we have already announced from the earlier trial and CE mark. I assume we sell at £6 a unit and make £2 margin (both of these could be a little higher or lower but will be ball park).
At 10m tests a month capacity (absolute minimum volume we should expect) that is annualised profits of £240m a year. I think we can safely assume we will be able to sell at this volume for years to come. At an absolute minimum airlines and border control are going to have high demand into the foreseeable future. I’d therefore assume a minimum 5x maximum 10x multiplier on this for valuation so £1.2bn - £2.5bn or thereabouts.
Where it gets regally interesting is if we can ramp up capacity well beyond this (we are talking to Asian and European suppliers remember). The UK government want 60m tests a month. Assume we supplied half of that and demand is at that level for 2 years then drops as above. We’re now talking more like £3 to £4bn.
What if we are able to secure Medusa’s 50m a month capacity, Now we’re talking probably £6-8bn.
Add in white labelling to other countries (if we achieve in full CV what has been seen in the small scale trial we wil have the best LFT and arguably most in demand product in the world) - your guess is as good as mine £20bn+???
I’m discounting BAMS for now but at this point the IP in the Affimer platform is worth billions on top of this surely plus preCISION could achieve a strong POC this year which could quickly be worth more billions on top. Then TMAC...
I’m by no means saying this will all be achieved but it’s certainly possible and shows the huge potential upside here. The scenarios above would indicate and SP of £5-7 in the lowest scenario to £40-50+ in the more optimistic (but not unreasonable) ones and potentially in a relatively short timescale. Needless to say I’m not only holding but buying more today and looking forward to next week.
The peak could definitely be higher than £14. A good flow of orders, licensing of LFT in international markets and an appreciation of what that cash flow means for the pipeline in the rest of the business could definitely push us over £20, especially if there starts being speculation of a takeover. Not saying it will happen but if all the ducks line up then a realistic ‘peak’ could be in the £20-30 range. At that point you start talking about a £5-7bn market cap at which point you have to think a takeout becomes more likely than further growth.
I see them. Pretty clear they were buys though, all above £2.20 yesterday and no way the SP would be surging like it is with £800k of sells. Simply show as sells because they were below the mid price at the time they were published today.
Someone loading up it seems
I think £5 is a very conservative of where the SP could go.
At £5 the market cap would be about £1.25b give or take. We could make more that than from the LFT alone in 2021 under the right conditions (remember there’s an £8bn tender out there and that’s just for the UK). Add BAMs then the pipeline value of everything else fully funded with no dilution to come and proof of concept secured and I’d be looking at £10 a realistic target in the relatively short term and at least twice that over the next couple of years if all goes according to plan.
Obviously with the best LFT test in the world licenced to other markets, BAMS seen as a legitimate replacement for PCR, amazing results from AV6000, etc all that could go out the window and it could be multiples of what I’ve written above as the potential upside for Avacta is absolutely enormous but based on reasonable expectations £10 a share this year does not seen remotely unrealistic
Also it doesn’t make sense that closing other positions means you have to sell more to cover.
If you actually use the service you will know that closing positions returns money to your net available that can be reinvested. It doesn’t mean you have to sell other positions. IG wouldn’t let you get into that position.
Avacta definitely isn’t on the list of shares IG are stopping offering. I have a large position with them and believe me I have checked this carefully. The full list of shares can be seen at the link below and Avacta aren’t on it:
https://www.ig.com/content/dam/publicsites/igcom/uk/210219_IGM_UK_Affected%20Markets%20-%20Non%20TT.pdf
Weird. I heard this earlier and Avacta were the first share he discussed.
You can actually just hear the join. Where the interviewer says ‘what’ the first share we’re talking about’ he previously went into a spiel about Avacta. Catenae then followed as the second share. You can just hear that it doesn’t quite flow when the interviewer asks the question then he says Catenae. Question is why has this been removed? It was just speculation on the Huffington Post article.
Yes, you’re UK investments remain the same and are unaffected. There will be no delisting from AIM, hence why it’s referred to as a DUAL listing. There are many, many shares that do this. Anyone suggesting otherwise is being mischievous at best
Just a thought. I wonder if that could be EU sales?
There’s a bit of smoke and mirrors going on at the moment but I’m starting to wonder if Avacta have one test for Europe (the one we heard about in the recent RNS) but then have a much bigger UK government unbranded deal that they can’t talk about that will be through the consortium that is being kept very quiet.
I can’t help but wonder if Stifel are ignoring the UK business (where most of the manufacturing will be pointed) and are instead speculating on a lower number of tests sold into the EU.
All very conspiracy theory-ish but there’s a bit too much that doesn’t quite add up right now and this would explain it.
So if you assume a basic valuation of $100-£120 per gold oz in the ground.
Our 1m proven should see us valued at $100 - $120m (say £70-85m roughly)
Looks highly likely that there’s at least another 1m out there too which we will hopefully prove in short order so £140 - £170m.
That would equate to an SP of around £1.50 to £1.80 based purely on the discoveries.
Plus there are the other metals as well but discounting them for now.
If we were to push further forward you’d expect we’d be able to capture a greater value but my hunch is we’ll be looking to prove circa 2m ozs then push for a sale at around the £150m mark, potentially as soon as H2 this year.
Absolutely fantastic potential and risk / reward at current prices in my opinion
After today’s news we aren’t far away from where Surescreen were when they got a £500m contract from the UK govt.
I would see that sort of of contract as only the very beginning / tip of the iceberg and remember UK is only one country. Based on what we know today we have very strong reason to believe we will have the best LFT in the world (and potentially the lowest cost to produce) which can be reproduced using standard components so can be licensed out everywhere and patented for over a decade to come.
Just wait and see where the SP goes in the very near future.!
Love the calcs Pattbrown2, that would be staggering.
Just to put it in context the total amount of gold that has been mined IN ALL HISTORY is 197 tonnes. That is roughy 7m oz.
Your calculations below show there could be more gold in this deposit than has been mined in the whole world over all time!
And our market cap is £33m.
Apologies if this sounds ridiculously rampy but the potential return here is staggering beyond belief