The latest Investing Matters Podcast episode featuring Jeremy Skillington, CEO of Poolbeg Pharma has just been released. Listen here.
We will be sitting here until the bridging loan is arranged ( 5m) - then no doubt interested parties will be keen to get involved in the next raise at the best price possible ( will it be the full 35m , or half and half ) . I'm maybe expecting one big raise - but with major input from interested big investors , along with LLS maybe . But we are already at basement level price .
No doubt the Bexmab update will be a cracker - so then its down to how much they can keep the price down for the fundraise vs how many want to get in . Like I said before - if it goes a bit lower , no great shakes unless you need to sell . Try to ignore the SP - and be glad that we are actually going to make progress - towards a much brighter future .
Reminds me of listening to Rick Rule , that precious metals windbag , who I like anyway , talking about risk and how he now invests in safer companies etc , but was reminded by his wife that the reason he is where is he is today , is because he hit it big investing in very risky companies . As many millionaires will tell you , you only have to strike lucky once ( I'll tell you that when I get there )
Sounds alright to me .
Short term loan ( over 600k via Timo ) - gets the shackles off - so that Faron can get on with business .
Then - they can organise the fundraise - which will get P2 finished and packaged with FDA recommendations for a P3 .
35 m required .
Pretty much as expected - to see them through 2024
Unless a non dilutive partnering deal is done .
Good to see that there is support - Timo won't let this ship hit the rocks until he sees a profit thats for sure .
Nice of Markku to make a token gesture too . This is his baby .
So roll on Bexmab news , and AGM .
There could have been a lot worse news - this means we are going forwards .
Maybe what needs to be appreciated is that Faron are still at the cutting edge of an unknown science . Clever-1 up until now has no track record to speak of . Faron have been the only ones to identify it , and work on their thesis , and to prove that up . Matins gave them a huge amount of information . But at every stage they were learning more - and actually giving themselves more headaches ( remember soluble Clever 1 ? )
Possibly they were hoping to strike it lucky on one cohort in MATINS as a monotherapy on solid tumours , but despite good data , nothing was big enough to force a BPs hand .
What it did help do was give them biomarkers , and proof of the IFNy connection etc .
Bexmab data then gave them a huge boost again in proving that Clever-1 was key . Given a clear shot at the right patients - it is proving beyond any doubt that it is clinically effective .
But we have to remember again that if Faron had sold out/partnered 1-2 yrs ago , it would have been at a paltry amount compared to what it is becoming worth now . This is where the patience comes in . That's why we have seen a build up in management and infrastructure . The high profile BOD appointments .
I follow plenty of very promising looking companies , and you could say the same thing about many of them - surely if it was this good , someone would have bought them out or made an offer by now ?
I'm coming to the realisation ( finally ) that the % of companies bought out for a dream price tag is very much the minority . More common seems to be the situation where they run out of money and perish , to be picked up for peanuts , or even just ignored despite having huge promise ( don't disrupt the market reasons ) .
So that's where we are at the moment .
Until Faron start generating cash - and standing on their own two feet - they were always going to be open to attack ( and I think that's what this was ) .
However- they are very close to getting Bex to market in some shape or form , and investors will hopefully see how once that happens , the future pipelines and developments will become hugely derisked financially .
As for sentiment - I guess that will have to wait until March 13th or the next RNS . Market is very fickle in the short term , but all will be forgotten if the SP doubles no doubt .
Slight relief seeing this move up I can say . Still at a silly price - but maybe this hint of a rights issue will mean that instead of selling down before a placing , investors need to be holding or coming in . I guess you can sell your rights , but its not like the usual raise . Once the ship is steady - its back to business - which before Armageddon was looking pretty promising ! ( and I'll finish the week on a ! )
Seeing a slight uptick in the last couple of days . Not big volume , but I wonder if a few are now starting to accumulate shares should a rights issue occur . Given that the SP sunk by pretty much 50% , the air has already come out of the bag . Small discount from these levels won't be permanent - but you have to be in it to win it as they say .
I know its galling Drac . Fundraises are always one step back to make 2 steps forward , but so long as their isn't any mischief by Faron , the March day should lay things out , and if theyve got any sense , they'll pump the b'jesus out of the proposition up until the AGM - with Bexmab updates and potential values . Just having some clarity and confirmation that Faron will be able to proceed should stick 80p on the SP before they even start the book build . We are only at £1.25 because of the uncertainty ( he says with glass half full lol )
So , as expected for any reputable company - management monitors liquidity , and the monthly operations are tailored to the budget , and approved by the BOD . So what happened ?
Faron are running operations in Finland , and the US . Lots of moving parts , and sometimes the unexpected does happen .
Did they get caught short underestimating how inflexible IPF would be right off the bat - when perhaps they just needed a little time to get straight . Very embarrassing . Either way - we were either going to see a placing , which to be honest most LTHs wouldn't have minded seeing how close a P2 completion for Bexmab would be , or a partner would step up and join .
From Markkus last interview presentation , I think I heard him say that to get the MDS/AML indication to market alone was not out of the question . It was something they would consider . Things were starting to hot up . Despite a high probability of a fundraise , the SP was holding quite steady right up until the IPF RNS .
We were running on fumes - that is a fair comment I would say - but something out of the ordinary caused this I believe .
Just been scanning last years annual report ( that covered 2022 )
To protect the continuity of the
Group’s operations, sufficient liquidity and capital has to
be maintained. The Group aims to have funds to finance
its operations for the foreseeable future. The Group can
influence the amount of capital by adapting its cost basis
considering available financing. Management monitors
liquidity on the basis of the amount of funds. These are
reported to the Board of Directors on a monthly basis.
The Company’s Board of Directors approves
the operational plans and budget and monitors the
implementation of these plans and the financial status of
the Group on a monthly basis.
On 28 February 2022, Faron entered into agreement with
IPF Fund II SCA (IPF), which contained
• a Euro term loan facility (Tranche A) of up to 10
million euro,
• a Euro term loan facility (Tranche B) of up to 5
million euro,
• the possibility of Faron to request up to an additional
15 million euro facility (Tranche C), subject to IPFs
approval process and certain conditions to be met,
• Faron to issue warrants to IPF as part of the loan
agreement, based on the amount drawn in the
above facilities
The first tranche (Tranche A) of EUR 10 million was
drawn down upon signing the agreements. Faron pays a
cash interest on drawn amounts of the above facilities plus
a pay-in-kind interest (PIK) for drawn amounts in Tranche
A. In addition, Faron has paid a structuring fee of the
committed facility on the utilization date of the respective
facility. Tranche A has been measured at amortised cost
using the effective interest method. The carrying amount
of the Tranche A was EUR 9,557 thousand.
The interest on Tranche A facility amounted to EUR
1,225 thousand. The loan facility is subject to financial
covenants. The covenants measure the Group’s gearing
ratio and cash runway. Given that some of the inputs to
the valuation technique rely on unobservable market data,
loan fair values are classified in Level 3.
Liabilities designated at fair value through profit or loss
primarily represent warrants which entitle IPF to subscribe
for new ordinary shares in the Company. The subscription
price per share is the lower of EUR 1,85 or the subscription
price per share in any subsequent share offering
undertaken by the Company. The warrants were issued as
part of the loan agreement for no consideration paid and
have been treated as a separate financial instrument. On
initial recognition of the agreement, the fair value of the
loan facility was reduced by the structuring fee and other
fees that are integral part of the loan and by the implicit
costs of the warrants. On subsequent reporting dates the
changes in fair value of warrants have been accounted
separately through profit and loss. The warrants are
classified as level 2 instruments and their fair value is
determined using techniques whose inputs are based on
observable market data
Glad I stayed off here a few days . After doubling my holding in the 70's the other day , I was quite chuffed with myself for afew hours( cue small montage of Wylie coyote disappearing into canyon).
Anyway - average is in the 80's , and I've no money left to add here , so unless by some miracle another AIM stock actually turns blue soon , I'll watch from a distance , comfy in the knowledge that I again nearly timed the bottom lol .
having 4 million was the issue as we were supposed to have 6 in the bank at all times to satisfy the nervous nellies at ipf .
how we went into the red by nearly 2 million is still the ( 2 million euro) question , knowing that by letting that happen it would trigger pandemonium .
the acceleration of bexmab was costly - burning more than they originally planned - but they were getting the patients recruited and fast . top sites probably don't come cheap , but what i don't get is that they would see this coming , and worst case , just do another 5-7 mil placing with usual suspects - and we gain another 3-4 months of breathing space .
that's what i can't work out . what else was going on - that mean't they weren't looking at a placing ?
two other less obvious scenarios - one that luch touched on also -
1.) that they did this on purpose in some kind of proactive self defence . we don't know the details of the ipf agreement - but we do know that its been renegotiated once - and ipf got some very cheap options out of it . pure speculation , but perhaps faron saw this as a ' call my bluff' moment - allowing them to straighten things out on their own terms , albeit a bit of a nuclear option in the short term . this is a family company - very honest - but also very protective , and fiercely proud of what they have achieved , and who has helped them get to where they are .
2.) that during heightened negotiations - promises were made - and then broken - leaving faron high and dry . that's it - simple **** up . they can't say much else as they are doing what they can . if ipf don't play ball , then they'll just have to wait for the agm . the march13th day should answer the basics . i would then say its most probable that having gone this far into the abyss - faron might as well do one big final raise - say £15-20m , we all take it on the chin - and push bexmab through to completion . we are so close now .
knowing whats coming with bexmab - if that can get us to the point of finally commercialising bex , and then obtaining a partner for long term development - it will be worth it .
Add DEST to that list - it was like open season yesterday !
Mind you we are up 6% on the Nas today - nothing too much to celebrate , but feels like maybe they are getting ready to blow the tanks and get this submarine off the seabed .
New date for AGM in April now Fri April 5th ( instead of March22nd)
I'm no expert , but I assume they need to pass something at AGM to enable a rights issue ( should it be required - it was only an option they wanted to enable should they need it )
Handy for me anyway - as we'll be into the new tax year and I can set some more in my Isa should that occur .
A good month away - so who knows what may happen in between .
So we will have an update and briefing followed by Q&A on the 14th March , followed by the AGM just over a week later on the 22nd .
Glad they will have a briefing from Markku too , along with analyst Q&A , and James O Brien will be there too .
Whether we will ever get to know the full story of how this situation unfolded or not , who knows ?
But either way , its reassuring that we will get some answers , along with how they have best planned to get Bex to market , and bring value back to the company and shareholders .
The only tip I can give you , and its hard to follow when you think you are gonna miss out , but top up in two or three amounts , giving a few days between buys . I actually followed my own advice this time and got two buys in the 120s . Will it drop lower - who knows . It seems to have settled , and I'm not expecting much more news now until something is resolved . Any clinical update coming out now would seem somewhat inappropriate ( but who knows ) . Anyway , Good luck Santhi . At least we haven't had an influx of trolls and doom mongers here . It is what it is - and we await news .
Hardly a major sale ( less than 1% of his holding - 0.93% of 13,410,336 )
He's been a rock right through thick and thin .
Despite the last few weeks shenanigans , we mustn't lose sight of where we are actually at with Bex .
Once this financial hiccup is sorted - the company can furnish us with the latest Bexmab update , which everyone must assume is going to be a cracker .
When this train leaves the station , it'll be pretty academic whether you got in at 70p or 90p , unless you are just looking for a day trade . I've got my long term pot sorted , but did have some more today , just to play with . Doesn't bother me if it fluctuates lower , grab a few when you can , then wait for the whistle .
As a side note - look at Avacta - massive potential . Last science day SP was at £1.50 ish . Yesterday 77p . Nothing has changed - they are still making progress -no financial issues - but they are under short attacks , and full on campaign to lower SP . They do have a very large number of PI holders , and for some reason there is the ability in the shady corners of the market to create these situations . But loyal holders will maybe try and trade a bit themselves , buy the dips and wait for the return to form , as they know the company will be worth at lot more than 77p . Likewise here . Good luck . We've had it easy compared to some shares . I wish them well . Poor old shareholders certainly getting a kicking all over the market at the moment .
Hi Santhi . Yes I'm here ( just been on a 3 day walking holiday) . Plenty of time to chew things over in my mind , but to be honest with what we've been given , it's hard to come to any firm conclusion .
Faron a have up until now been perfectly capable of raising small to medium amounts to get them to the next milestones .
Placings often over subscribed . Loyal shareholders , and they have been a shining example of how to conduct yourself . Multiple grants , and recently high profile tie up with LLS opening doors to the premier cancer treatment centres in the US .
The IPF relationship , although welcome at the time - has caused problems . The cash buffer requirement has been a constant factor in raising funds , and the previous re- negotiation , came after a period where the SP dipped into the 180's - and IPF came out of that with a much better hand . I don't think we have ever been given the full details of the IPF agreement - so we don't know about any small print . But compared to say a normal loan - IPF seem to have a lock over Faron with some severe penalties , and some other share price related conditions .
So - how did we get here ?
The accounting error reason initially seemed the most obvious - but I just can't see that as the case . Maybe it is and we are stuck in a pickle while Markku tries to get the company back on its feet ( a month to sort it won't be a complete disaster - but it will be massive egg on face moment) but I really don't see it . It's like running out of petrol on the way to church on your wedding day . They can't be that careless.
So that leaves us with IPF pulling some kind of stunt ( either alone or in step with someone else ) . For reasons to benefit either them ( some kind of extra cheap warrants/ options) that was in the contract ? Who knows . But also - surely it wouldn't do their reputation much good if future partners with them see how they are prepared to wreck a company for their own gain .
So the third option is that a deal was being finalised - funding was expected - but for some reason didn't arrive - and this situation occurred . IPF were handed this situation - and had full right to renegotiate their hand again - thank you very much . The SP tank will probably help them - so no rush in sorting it out while share not suspended .
Markku will not panic . There 'WILL' be options he can take . What they are doing now I suspect is working through waht will be best for the company ( and shareholders to a lower degree , and remember they are large holders themselves) in the longer term . They have by whatever reason - now got a chance to make themselves a bit less vulnerable .
So - for now - I am over the worrying stage . Out of our hands - all we can do is buy/sell /hold . I have read enough about the company to be confident in their abilities - and have belief in Bex .
I apologise if people have over invested here and are distraught - due to my ramping/ ultra positive nature .
I personally doubt I have that much effect , but I don't think I have ever spun a mistruth on here - just posted my thoughts , and presented facts - albeit with the Sax vibe attached .
Anyway - good luck all in what you do . I'm here anyway .