Member Info for ShearClass

Fantastic. Sales price €1530 for 96 tests = €15.93 per test, so £13.85 at current exchange rates. So possible the NHS contract this morning is actually worth just under £4m per week & nearer £100m overall...

Wouldn’t it be funny if Diamond Horse on Twitter was right about a placing coming after all the baseless ramping here today!

Stanley, if you perform a SWOT analysis of NCYT vs AVCT vs ODX you’ll realise that NCYT is currently streets ahead. From a commercial point of view the other two have potential (AVCT considerably more than ODX due to the fact they own the IP), however they have it all to do at present.

If NCYT can successfully launch their dPCR test & reduce its speed to under an hour (from 2 at present), then their proposition will be incredibly strong.

The saying that a bird in the hand is worth two in the bush is particularly relevant to this situation.

Understandably, most private investors are looking at the near term revenue potential of NCYT. However, there are several reasons to think that we are in the early stages of an evolution from micro cap to mid cap.

- Post Pandemic, Primer Design will have forged or reinforced relationships with many private, public & NGO organisations across the world. They already have close ties with AZN & GSK that nobody would have believed possible back in Feb.

- As a diagnostics company Primer Design have been profitable in every year since 2009 (check companies house filings). They made £1.6m PBT in 2018.

- Their enhanced reputation for quality, reliability and professionalism should open doors around the world to new contracts and opportunities.

- They traditionally have enjoyed gross margins of around 85%, assume that post pandemic their turnover increases to £30m per annum which I think is realistic, resultant profit after tax could be around £15m.

- The current market cap of NCYT is £247m, that would put the Primer Design business on a P/E of 16 with PAT of £15m which is very reasonable for a profitable & growing diagnostics company.

The bottom line is that if over the next 18 months they make even £200m profit before tax (it could be way more), they will have the funds to strategically develop the business way beyond where it is now.

- Do they expand operations around the world?

- Acquire private competitors with complimentary products/services, as Novacyt did when buying Primer Design in 2016.

- Hire the worlds best talent to help them drive new product innovation?

- Acquire IP to help diversify & increase their product portfolio (I.e Clinigen)

IMO They aren’t going to go back to being a small player once this is over, the world & Novacyt will have changed forever.

Comparing the commercial potential, and therefore market caps of ODX to NCYT is literally apples vs pears.

My view as as follows; Mologic are the test provider, own the IP and therefore control the economics of production and set the price per test. They will receive the cash from the buyer (e.g the government) say it sells for £5 per test for arguments sake. They will pay ODX a % per test produced, let’s be generous and assume this is 20%. So ODX earn £1 per test on a gross basis.

However, NCYT own their test IP and so dictate the economics of production & set the sales price. They will pay their manufacturers (Cytiva / Yourgene etc) a % of the selling price per test, and retain the margin as their gross profit. If NCYT sells a test for £5 and pays a 20% cut, Yourgene get £1 and NCYT £4.

So based on the above example, ODX would need to sell a minimum of 4 x the number of tests to make the same revenue as NCYT. In all likelihood this multiple will be higher as ODX will have manufacturing overheads to cover & the NCYT sales price is more than £5.

NCYT had sold £17.9m of tests to the end of March, prior to scaling up to 4m (and soon to be 8m) tests per month. If ODX make £1 per test and sell 46k tests per day to Mologic, it will take them 389 days to reach £17.9m of revenue.

If NCYT successfully scale up to 8m tests per month and sell them at a notional £5 per test (by all accounts it’s closer to £10) that is £40m revenue per month for NCYT, it would take ODX 869 days to reach this amount of revenue, so over 2 years.

So no PDMSPiper NCYT is not overvalued, it is in fact grossly undervalued in comparison to ODX based on the above conservative calculations.

Interested to read a constructive response as to what the flaws in this analysis are, as to me it seems clear cut from a financial perspective. If you could invest directly in Mologic then it would be a slightly different story.

Similarly with the rapid test consortium, ODX are the manufacturer of the test, not the developer, so will only receive a small portion of any sales revenue. All IMO of course, and please do you own research.

1. From a commercial point of view, if antibody testing doesn’t prove or disprove whether you can catch Covid-19 again, why would any business or person pay for a test?

2. If the purpose of testing is simply to guide vaccine development, then surely the work is essentially R&D? As such, why would the margin on tests ODX provide to Mologic be anything than cost + 5%?

In summary, if antibody testing cannot provide an answer as to whether you can catch the virus again, it isn’t the golden bullet the government have been proclaiming it to be & IMO won’t generate meaningful revenue for ODX

Potentially a killer blow to ODX / Mologic if true and a major problem for reopening the economy...

https://www.google.co.uk/amp/s/www.bloomberg.com/amp/news/articles/2020-04-25/catching-covid-19-may-not-shield-against-new-infection-who-says

Worth posting this for those who haven’t seen it;

httPS://www.itv.com/news/2020-04-20/how-to-close-the-big-gap-between-coronavirus-tests-carried-out-and-testing-capacity/

“Take for example the new super lab being built in Cambridge by AstraZeneca (AZN) and GlaxoSmithKline, using equipment and technology made in the UK by Primer Design, the molecular diagnostics division of Novacyt.

AZN's chief executive Pascal Soriot tells me the tests will start any day now and that it will have the capacity to process 30,000 tests every day as soon as early May.”

We’ll almost certainly get news on the opening next week as it’s May next Friday...

From the hit consultant link gggg21 just posted there is a link to list price;

https://www.usbio.net/kits/532224/genesig-real-time-pcr-detection-kit-for-coronavirus-strain-2019-ncov-advanced

“532224 genesig Real-Time PCR Detection Kit for Coronavirus (Strain 2019-nCoV), Advanced|(Backordered to 6/2020).”

BACKORDERED UNTIL JUNE!

I’ve also added this morning at 35p, looking as NSF my feeling is that the market is being overly pessimistic / this has been driven far too low by the Algos. 80% fall from the start of March is crazy, lets see if we get a bounce when they release their Q1 trading statement on 30th April.

Completely up to you whether you go all in. Of the three GDR has the best risk reward in my opinion. If for whatever AVCT announce the affimer based test is unsuitable their price will plummet, and as it’s experimental there is clearly a risk of this happening.

ODX is part of a consortium, so their financial benefit from any antibody test will be heavily diluted, and again there is a risk that it doesn’t work.

With GDR the PCR based test is tried and tested, the main issue companies have is manufacturing and distributing in scale and obtaining the ingredients. They are confident on producing at scale & via the Cytiva partnership they can distribute worldwide and access ingredients, so I don’t envisage any issues with production or in selling what they produce. Then beyond that there is the second rapid point of care test to release over the summer.

What will the GDR market cap be at the end of July if they are manufacturing & selling 10k PCR tests and 10k Rapid POC tests per day? Not £28m that is for sure!

Yes an excellent close! Really good volume throughout the day & closed at the days high on the bid. Should be an interesting start tomorrow & who knows we might have another RNS...

So many bid chasers in these covid shares! As soon as you get a rise you get sellers letting go of poxy amounts of shares. The market makers must be loving it... onwards and upwards to £1 this week I think.

@ThomasBrowne, I’ve listened to the same information as you and was very impressed by the possibilities going forwards as well. The fact is this is a long term hold & I’ve earmarked it as a cornerstone of my portfolio. If positive progress continues I see this as a mid cap of the future :)

As stated below, the seller is almost certainly Spreadex. If the buying continues as it is at present this will move rapidly soon...

Spreadex - check their RNS on 16th April - they had around 6% left as per the 14th so must nearly be out...

3 years back but very relevant in the current situation;

For release: 16 January 2017

genedrive plc Reports Delivery of Genedrive(R) Units and Assays to the US Department of Defense in Programme to Develop a Handheld Biohazard Identifier

genedrive plc, a Manchester-based diagnostics company, today announces it has supplied Genedrive(R) units and assays to the United States Department of Defense (DoD) for field trials as part its $7.8m development programme for a handheld device to allow for the detection of biohazards - such as biological warfare agents.

Good progress has been made in the second, EUR2.9m, phase of the programme first announced in March 2016, and the supply of units for field trials follows further development work and validation.

Genedrive(R) is a small, portable, versatile system which can rapidly analyse DNA without the need for sophisticated laboratory equipment. In addition to the DoD programme, Genedrive(R) is being used to test for TB in India and assays are under development for Hepatitis C (HCV) and other infectious diseases. Genedrive(R) is also being developed for use in aquaculture to test for diseases in commercial fisheries.

The aim of the DoD programme has been to develop a smaller, lighter, more portable system that can detect multiple different agents with a single cartridge to allow more units to be deployed and more tests to be done. This is against a backdrop of military personnel being expected to carry ever increasing amounts of equipment and the logistical and cost implications of that demand.

"The goal of the programme is to use the key characteristics of Genedrive(R), its portability and flexibility, to develop a device and test combination that can potentially be widely deployed in the field both for homeland protection and across the world. Our cartridges detect multiple agents but are small enough to fit in a pocket. The device weighs less than one kilogram and is relatively low cost meaning multiple units could be bought and put into use," said David Budd, Chief Executive Officer of genedrive plc. "We are now working with the DoD on tests in the field to confirm the results we've seen so far on Genedrive(R)'s robustness and the accuracy of the tests".

- Ends -

Solid start today, once Spreadex are out we’ll move up towards the £1 mark IMO. It’s fairly clear that they stopped selling on 14th April which led to the price rocketing from 29p to 83p, then they started again. Since 15th April there has been >15m volume and their holding was 1.9m, so they can’t have many left...

@Bigbench, where is the £1.17 brokers target?

Yes Technick, the two stage approach will catch a lot of PI’s out who have dismissed GDR as being behind the curve.

It’s well worth anyone re-reading the March 25th RNS now we have the additional context from yesterday. The two prong approach covers all bases, and has so much more credibility now we have the official confirmation that Cytiva are central to the plans.

“A second test will also be developed by the Company where it will adapt its formulations to run on the Genedrive® instrument platform to provide a rapid point-of-care SARS-COV-2 test to allow testing outside of the main hospital environment in places such as clinics, intensive care units, or where rapid and accurate testing for SARS-COV-2 might be required. The rationale for the two-stage development is that the testing, logistics, validation, and trial work to provide testing on a turnkey instrument system like Genedrive® takes additional time compared to an agnostic assay format”.