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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

Bang in the mid point between bid and ask but higher than the volume weighted average for today.

Really tricky to tell but with the above and especially with the SP being up on the day I’d lean towards buy

Assume escape of water means leak rather than people bailing.

£6.51

I assume this is a guess rather than an in the know comment?

I agree though, the production is going to be huge

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

Is miles and miles away. They’ve done a bit of sampling in a lab. Roughly where we were in about May last year. Not even been used with real samples. This is just being used as an excuse for a tree shake. Ignore

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.

Six years is a pretty standard term for a NED. Good practice says they shouldn’t continue much beyond that and three year terms with one renewal are very common

No implications whatsoever. An employee has chosen to exercise options worth £25k but because it affects the total number of shares in issue (albeit by only 10k) the company are legally obliged to put it in an RNS

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.