The latest Investing Matters Podcast episode featuring Jeremy Skillington, CEO of Poolbeg Pharma has just been released. Listen here.
As a private outfit, with a couple more preclinical drugs, they'd probably want upwards of 1 billion for this, currently. Seen less well stocked sell for 2 billion USD in better times.
It's a damning AIM valuation and WELL out of kilter. There'd be an immediate re-evaluation as a private company.
It's not a scam. A scam would be the IIs bagging another 6 per cent or so via a placing and then forcing a compulsory buy out, before delisting, as they have inside information.
This outfit IMO should be NASDAQ listed and could ultimately be.
If you have the stomach to hold, the Company has made clear that they will accommodate existing LTHs, so that's fair for those wishing to wait for relisting/selling/dividends etc.
Holding in SIPP etc should be doable, but you may need to transfer the holding another broker.
Some will be topping up today. Private limited obviously has downsides, but if you can buy into a Co. With 1.8 billion in milestone deals, sitting at a current valuation of a comparative bag of crisps, then that will suit some wishing to remain for a longer period.
DYOR.
Last one before I pop out, is a slight irony.
VAL has no instis.
But 2 years ago, instis would have been falling over themselves to get in on cash for shares, in order to purchase Imagen as a going concern, as part of a buy-and-build strategy.
Imagen would likely have wanted several million. And they'd have got it. And we'd now have a LOT more shares in circulation; potentially suffering a decline in the interim business strategy that befell Imagen.
Funny old world.
It's hard to know what effect such acquisitions bring to the immediate overall Company value, but it could easily treble the revenues of Inaphaea, and this would be in the near-term, as they already have the accommodation and lab environment to transfer the cells and offer the services. It likely trebles the offering immediately; probably more.
It's a proper oncology CRO now, with no direct UK competition in this particular space.
I have to comment on this one, as I know the Company.
Spent big (you can check out the accounts). Accumulated about 3-4 million pounds worth of equipment, and built a bio-bank. The latter is hard to value, but it probably cost about 2-3 million, in and of itself, to build. Not much else like it – and nothing in the UK. It has patient-derived cells to test cancer drugs, rather than immortalised cell lines, which often do not give an accurate signal in terms of drug efficacy.
When large pharma reigned in spending a couple of years ago (which thankfully is coming back now in my own experience), crunch times hit the debt, and here we are. Effectively the fire-sale of a business. It’s definitely a “buy” this one, but at a “build” price. In fact, I’m shocked that a big CRO Company like Sygnature didn’t snap it up. I can only assume it has passed under the radar, given its base away from any scientific hubs.
They’ve bought a business that had an equipment asset value of probably 3+ million; a biobank with significant worth; and all the IP. For 170 grand.
Credit where credit is due. This is an excellent bit of business.
201 is reduced to clear, but yes, to be frank, I would.
Maybe not with 301, but I have no idea what the status is at present. At least then, even giving 201 back would maintain a slim chance of getting it into a patient.
Even if the deal does come in now, we've lost around 75% or our potential otherwise MCap; had 30M new shares to show for it; and had to endure a year and a half of excruciating frustration and lost trust/decline in LTH relations (on both sides of the fence), in the interim, which is a real shame for me, personally.
I couldn't agree more, NH.
I've long thought that managing to partner 201 was more important than the financial reward, in and of itself.
Let's face it, we're probably talking 500 grand upfront and another million the year after. Small fry.
BUT; if a dog-legged compound with many issues has been partnered, then not only does the preclinical SPV pipeline then look like a really attractive partner package to emerging collaborators, but, more importantly, shareholders can sit back in the knowledge that compounds such as CLX then have a fair chance after a couple of years for a 5-10 bagger; each. These are 18-20 year patented first-in-class compounds - fit for the next 20 years of pharmaceutical progression.
The first "deal" has alluded this Company thus far.
Sentiment would turn on a pin-head if this were to change.
Sareum got fed up with a partner who procrastinated; didn't fulfil their obligations; and didn't substantiate a material reason for delaying the progress of a compound.
They took the punch, packed up, and went to look for other opportunities.
Good for them. This is the right thing to do.
I think they do understand the science, Cobalt.
But I'm happy to get the crayons out, if you don't.
No info on that exact markup figure, Kidlington.
But if true, it would work both ways I'd imagine, in that PYC would get a "finders fee" if they "reverse-referred".
Having said that, 80% of something is better than 0% of jack; for both parties.
Also, as VAL have been, shall we say, thus far fairly "generous" on their deal-making with third parties, I'd be amazed if it wasn't at least as beneficial to PYC, as it was to VAL.
PS - love you too Harvey. :-)
If those financials are correct, then that is a pleasing report.
Year-end residuals should be bolstered significantly by revenues from Inaphaea. Now, these would only be revenues, but they would hopefully be paying for the staff and equipment/some new capabilities, as the lab builds, to ultimately turn over a few million per annum. Cash looks good until well into next year, based on this.
The lab will also save significant time on any new compound evaluation; probably halving, if not more, the time taken for “preliminary analysis”. Additionally, it will halve the cost of this analysis. And with R&D credit access, these evaluations will almost look “cheap”. Even Cathy’s time can probably be claimed towards it; nevermind just the lab staff.
Obviously, VAL are still at a fairly critical juncture, but I expect the leadership to be acting on this.
The lab evolution has, to my mind, been great. But I am opposed to any further third-party acquisitions at this juncture; especially as I see something great emerging here. I think the BOD would do really well to take the “buy-and-build” categorically out of the minds of shareholders, for whom the threat of near-term dilution has absolutely caned our SP; not least give endless ammunition to those that wish to use it detrimentally. It’s a great idea, in a world where our SP isn’t down 65% YOY. For me personally, now is not the time, but it may be in future.
So, I think that a sense of measured and incremental progress (as we have, to be fair, thus far seen) with the CRO arm is fitting.
However, in contrast, a more pressing sense of urgency is required for the legacy and some new evaluation compounds. And although various contributory factors may have led to a “drag”, now is the time to get some of them on the road, or out of the parking lot; preferably by June. Not least 201; an update on Barcelona; and preferably (unless all current acquisitions are swimmingly excellent), a new addition. Let’s see if they can do it. This is after all what SHs invested for and will invest for, still.
PS - if a Biotech business is only considered viable with a 2-year runway, then I actually can't think of any "viable" biotechs, Porky, so you might want to look for FSTEs for your investments, whether Stella said that, or not.
exp(EC50i)-N(a0EC50(marker in question) + a1 x log(ROR1i), 0).
Ironmighty is smart – he can QC that.
Not that lame, really CB.
PYC will effectively take some cell line data, that “looks like it might work when on a graph”, and apply a customised algorithmic formulae – something like the below:
exp(????50?? )~??(??0 ????50(marker in question)?? + ??1 * log(??????1?? ), 0)
Assuming, of course (and you’d obviously know, being Oxbridge educated), that an assumption can be made that any cytotoxicity EC50 value can be calculated using a cell-line density value.
…and then they'd present something back to the primary client that looks way better, and confuses the f out of big pharma acquisition personnel, who’ll probably then be much more impressed.
So a win-win overall, I’d say.
Agreed hasiba.
But one of the primary responsibilities of the Chairman is to ensure that there is effective and accurate communication by the Company with its shareholders, including the smoothing of any transitions regarding information and data consistency/communication, between old and new management teams.
So whilst the current major co*k-up is probably surmountable, in terms of having a new CFO who evidently isn't going to suffer mis-communication, there are very big questions as to whether the current chair has a tenable position. Passing the fiasco off and blaming the "executive" arm is a classic "I wasn't paying attention to my paid role" diversion, and this is very poor, if not inexcusable.
As for the previous CEO, I'd personally be quite wary of coming out of the blocks so quickly, to announce money owed. Director disqualification proceedings can be launched if it is believed that a current or former Director has been involved in the supply of misleading information and/or subsequently found, by a court, to have not carried out their duties, in the management of a company, correctly.
The quite large glimmer of hope, in my opinion, is that the new CEO appears to have put his reputation on the line to get out of this, and also appears to be building a team that can run the Company successfully and, most importantly, responsibly. Although it is obviously a lesson for all the management team in appropriate due-diligence, a MCap of half an expected minimum revenue is exceedingly rare in bioscience AIM, so I will also hold.
Ok Porky, a degree of positivity in there, but it all really came down to being "practically uninvestable" again, so I have to knock marks off for that :-)
Saving your energy, Porkster. Not your money, fella. Don't be so sensitive.
Anyway, in light of a good discussion; tell me:
What do you like about VAL?
We know the negatives. What are your positives?
There must be something, no?; otherwise why the energy and attention?
Lot of energy indeed.
Better save some up, Porkster.
You'll need plenty for accounts day, when I predict you'll be like a ferret out of a drainpipe, to come and lecture us all on cash runways and 4-5p placings (that you want to partake in).
Yawn.
I'm a bit surprised with all your money making and market expertise, Porky, that you can find the time to scroll accounts, examine IP ownership, file through broker reports, and post for hours on a share BB that you're not even invested in.
Not aimed at you, NH.
Yes; I would like a resolution to 201.
The Company would be in a better financial position without the LOI, and I believe that it has shot trust in the BOD, rightly or wrongly, to such a degree that it needs to be addressed head-on.
This could be in the form of a payment to maintain exclusivity, or to maintain ongoing costs to VAL (e.g. patent renewal), which are not free. For an outfit wishing to raise multiple millions, this is token.
At very minimum, we should receive a reasonable update (we are past "in due course", in my opinion).
The initial payment would ultimately only be a few hundred grand, but 201 has probably wiped 15-20M from our MCap. It's a one-way "no win, no fee" arrangement, and it has been terrible for shareholders.
If the above couldn't be done, then I'd move on; even if it mean't going back for more work, as has been done for 301.
This is my opinion. The BOD feel differently, may have seen more than we know, and are adamant that it's on, so if it is (realistically it would have to be soonish, by even the largest stretches), then any ultimate successes are totally on them.
However, if the deal is delayed further, and ultimately is not signed, then that's on them, too.
But we have Kevin, Stella, Martin, Gerry, and a financial advisory team who have agreed, in due dil terms, that TX are going to be giving VAL money. It's a board-collective decision, and this is as much in their remit as that if the CEO. They've asked us to trust them.
Let's see how this develops in the next couple of months.
The other point to note, is that they only seem to take on an SPV when the formulation is right and the efficacy/pharmacodynamics look promising.
So, whilst any delays are incredibly frustrating as a SH, if any pass these, then they have much more promise than an otherwise lead-generated test material. It's essentially optimised, and to get to that stage in a large pharma could cost 10-15 Million quid.
VAL are good at cost-cutting in this, and seem to do it on a fairly narrow shoe-string.
So, ultimately, you could argue that CLX might be "valued" at 15-20p as is, all these months in, and that any additional SPV could be 10p each, at signature.
But I don't want to annoy the converse posters, so I'll just say that I *personally* think that 10p significantly undervalues the one SPV we have, without considering anything else like the lab; 301; 3M in the bank; the cost of the VAL "shell"; work undertaken with two more evaluations etc.
But I do strongly disagree with the line "it takes years for commercialisation", as that simply isn't true. There are other AIM Biopharma outfits with milestone deals in place for compounds at an earlier stage than CLX001 currently is, wherein formal drug development work had not yet started at contract stage (just concept).
PatientInvestor I also concur strongly with. I do not want to see a negative impact of 201 on any future good news, nor do I think that it is an appropriate time to dilute for growth. The reason for this is that there is a lot currently in the VAL tank, and this should be maximised throughout 2023 with the tools to hand.