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This is why. I refer you to my post from last Wednesday Utah:
"Cash burn at the back end of last year was GBP130k per month and that was with CHK1 fully outsourced. The interims in March 2018 were explicit in stating that for TYK2 "The Company has been increasing the resources allocated to its TYK2 programmes and is currently undertaking the studies to select preclinical development candidates from the shortlist". On Aurora/FLT3 the company said in March,"To resolve this formulation issue, Sareum has engaged and funded formulation specialists in the UK. This work is ongoing".
My estimates for cash as of this coming Friday were based on a modest increase in cash burn from GBP130k per month in H217 to GBP137k for the 8 months of this year. However, if you are saying you think cash burn is unchanged or has even fallen I cannot see how you arrive at that. It could have occurred if the directors had taken pay cuts but presumably that is both unlikely and announceable. Even if cash burn has inexplicably fallen to say GBP100k per month, Sareum's bank balance this coming Friday would stand at £1.1mn, or 11 months cash. I think it's more likely to be closer to £1.0mn or 7.4 months before overdraft. Please feel free to correct me if I'm missing something.
Of course a milestone from Sierra would change everything. But without it, a placing is odds on before October in my view.
DYOR.
S"
one thing up. Whilst I appreciate the discussion about TM and JR's exit strategies and cashing out Sareum for a healthy "pension" are totally valid and must be their preferred end game let's not forget we shareholders do contribute to their pensions. Tim is 56, John 50 so this is now becoming quite pressing. Since 2005 we've contributed GBP 95,187 to Tim's pension pot which is presumably worth around GBP 120k depending on where invested. And for John the figure paid in by Sareum to his pension is actually higher at GBP 98,013. So they will both get a Sareum pension in today's money of about £5k pa. Not much I grant you but not insignificant when you consider they both have Millennium Pharma pensions and presumably similar pots with Cambridge Discovery, Smithkline Beecham and Phamacopeia. Note that recent Annual Reports have stated that both have used salary sacrifice to top up their 6.375% Sareum pensions and that given the recent salary jump and bonuses will not be insignificant. I accept that selling Sareum for multiples of the current price would make those numbers pale into relative insignificance, but, at the margins they are considerations to the retire exit strategies of both I would venture. S
Cash burn at the back end of last year was GBP130k per month and that was with CHK1 fully outsourced. The interims in March 2018 were explicit in stating that for TYK2 "The Company has been increasing the resources allocated to its TYK2 programmes and is currently undertaking the studies to select preclinical development candidates from the shortlist". On Aurora/FLT3 the company said in March,"To resolve this formulation issue, Sareum has engaged and funded formulation specialists in the UK. This work is ongoing".
My estimates for cash as of this coming Friday were based on a modest increase in cash burn from GBP130k per month in H217 to GBP137k for the 8 months of this year. However, if you are saying you think cash burn is unchanged or has even fallen I cannot see how you arrive at that. It could have occurred if the directors had taken pay cuts but presumably that is both unlikely and announceable. Even if cash burn has inexplicably fallen to say GBP100k per month, Sareum's bank balance this coming Friday would stand at £1.1mn, or 11 months cash. I think it's more likely to be closer to £1.0mn or 7.4 months before overdraft. Please feel free to correct me if I'm missing something.
Of course a milestone from Sierra would change everything. But without it, a placing is odds on before October in my view.
DYOR.
S
your choice potnak. On a probability basis over the next 6 weeks one event is close to 100% likely (placing), while the other (candidate selection) has a much lower probability given the history. Agree that your sequence would be optimal for Sareum (and trading the stock) but I think risk reward will favour those who buy the placing dip first. Each to their own.
Let's be quite clear. Cash burn increased in H2 17 and the Board were clear that this was linked to the progression of TYK2. There will also have been a step up in cash burn in H1 18 related to the spending on Aurora+FLT3 formulation issues which again the Board were explicit in stating they were funding. Assuming cash burn at the same rate as H2 17, Sareum's bank balance this coming Friday would be down to GBP1.031mn. That however is generous in my view. I think cash burn could well be higher than this assumption. A conservative level of 145k per month would mean that the bank balance this coming Friday would be closer to GBP1.0mn or 7 months before we run out. A placing is coming absent a milestone and it's coming earlier than the usual November timing. I'd expect it before the end of September. S
if you are a serious shareholder (size wise) you could approach the advisors about participating in a future placing. there will be certain legal restrictions on you if you want to participate but you would get stock at a discount to the market. this would also assist the stockbrokers and Sareum itself in raising funds, the cost, the share price impact and assessing demand.
Whilst frustrating, it was ever thus with Sareum. I recall one time some years ago when, under the pressure of bulletin board chatter, the board did make a statement. I guess the lack of communication reflects a lack of anything to say. Do you really want them to issue statement which says "there is no news"? A further complication is that they will soon need to raise funds so any statement now could impact that process. Of course the silence could also be due to NDAs or other restrictions but I suspect not. I think they will look to raise GBP0.5to 1.0mn before the end of October. That would probably take the price down to the 50s or 60s absent any positive developments. Even candidate nomination, which Sareum (and partners) repeatedly promised years before it happened with CHK1 will likely require considerable investment either from raised funds or outsiders. I think you need to remain patient. Having been here since 2005, believe me, there is no other way (save from selling up and moving on). S
Sierra Oncology Q2 results show further prioritisation of high grade serous ovarian cancer patients in clinical plan The licence holder advancing clinical cancer candidate SRA737 (the Chk1 inhibitor), has reported its Second Quarter Results. Simultaneously, it updated on SRA737’s clinical development. In the monotherapy study Sierra had previously announced that it would focus on high grade serous ovarian cancer (HGSOC), supported by emerging data in the field that provides clinical validation for Chk1 inhibition in this indication. Due to the enrolment of approximately 65 genetically defined HGSOC patients into this trial, Sierra is now expecting to report preliminary data in H1 2019, a small extension from the previous Q4 2018 target. We believe that the change in the trial designs to prioritise patients with high grade serous ovarian cancer (HGSOC) optimises the chance of a positive outcome, given the validation of this target evidenced by Lily’s Prexasertib data released earlier this year. Preclinical data by Sierra is also supportive of this rationale. We therefore believe the trade-off between trial optimisation and slightly extended timeline, is a decision well made.
Similarly, in the low dose gemcitabine combo trial, Sierra is also to adding and prioritising enrolment for a cohort of 20 genetically defined HGSOC patients, replacing an originally proposed cohort of urothelial cancer patients. Hence, data from this trial is also now expected in H1 2019.
Chk1 currently remains the core driver for value crystallisation at Sareum and we have previously set out indicative risked and un-risked valuations for the Chk1 programs of 1.05p and 4.83p per share respectively. We stand by our assumptions. The excellent safety and bioavailability profiles shown to date, combined with the validation coming out of the Lily trial, does in our view increase the probability of the program progressing to the next stage, and hence further milestone payments to Sareum. Indeed, we understand SRA737 exhibits several potential preferable characteristics to the Lily compound including oral administration, selectivity, and side effect profile. The adapted trial design has the potential to show significant efficacy earlier than a more generalised program. We have ascribed a risked value of 1p/share to Sareum’s pre-clinical programs and see scope to improve on this as they advance towards first in man studies. A short delay could be more than off-set by the possibility of compelling data from the amended trials.
Gene amplification CCNE1 is related to poor survival in ovarian cancer and is a serious unmet need. This could accelerate the delivery of the likely larger later stage milestones. Sierra reported cash balances of $125.4m, enough to fund programs through to mid-2020. Sareum stands to collect a further total of up to $87.8m plus royalties under the deal.