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@rango1, typical, I checked Friday morning and the Q2 figures weren't there! I note the whole section has been taken down today... can you confirm what the blended rate & average client balance figures were?

I agree in any sensible market shares would be trading at £30-35, the fact they were at current levels almost 2 years ago is crazy. They just need to keep doing what they are doing and it'll be recognised sooner or later - no chance a business of this quality should be trading at ~9x FCF / an 11% yield...If I had £1b I'd be tempted to make a takeover offer ;)

“The profits of the Joint Collaboration will be shared 50:50 between Futura and Co-High.”

That’s a JV, todays news is a licensing deal, the two are as comparable a cat and donkey.

Drug licensing deals are fairly common on NASDAQ. Good royalty rates are 20%+ and are rare. Low double digits are probably most common. However, plenty of mid to high single digit deals are done.

This announcement is very vague, they’ve only given away one useful fact which is the up front of £4m. The milestone range means nothing on its own without knowing what the conditions are.

IMO they’ve been vague because it prevents the market from accurately valuing the business & stops PI’s from understanding the downsides of the deal.

Had they said the £5-45m of potential milestones were contingent on $50-250m of sales being achieved in the 5 years post launch & also disclosed a royalty rate of 10% then most people could have worked out that the top end of their estimates would result in $25m royalties + £45m milestones.

As it is, the everyone can still speculate and dream of mega sales figures. Until they release forecasts I can’t see this going anywhere.

The fact they haven't disclosed the royalty rate tells you all you need to know. Likely mid to high single digits as it removes a lot of the financial risk from FUM, however it also removes the reward / upside of the worlds biggest market and I don't think £4m up front & undisclosed milestones make up for it.

Plugging in the following; a royalty rate of 7.5%, USD/GBP of FX of 1.3, a discount rate of 8% & annual sales averaging $100m starting from 2025 and continuing for 8 years gives you a present value of £28m. Are they really going to average those kind of sales figures?

It's classic AIM in my opinion, flattering to deceive.

I think this has to be the most bullish IC article I’ve ever read on a small cap;

https://www.investorschronicle.co.uk/ideas/2023/07/13/a-small-cap-with-a-game-changing-us-contract/

I’ll post most later on but have to agree on the current valuation of 2x FY24 sales looking very cheap vs other listed AIM companies, never mind US comps…

Quarterly figures have been updated on the website & the main changes in Q2 were;

Sellers;

Liontrust shares - 375k shares

Eqi Stockbrokers - 308k shares

Martin Currie - 211k shares

Kabouter - 165k shares

River & Mercantile - 156k shares

Chelverton - 84k shares

Premier Miton - 46k shares

Aegon - 42k shares

Total outflow from top 20 shareholder list; ~1.4m shares

Buyers;

Abrdn - 654k shares

JP Morgan - 303k shares

Jupiter - 223k shares

Fidelity - 130k shares

Baillie Gifford - 50k shares

Total buys from top 20 shareholder list ~1.37m

New register addition - Berenberg - 455k shares / 1.08%

So it's not hard to see why the holding pattern continues! As long as Liontrust & other under pressure UK II's like River & Mercantile, Chelverton etc are providing supply to much larger beasts like JPM & Abrdn then shares will remain rangebound.

It's notable that no new II's have appeared on the register in the 9 months / 4 quarters I've tracked it. This is almost certainly due to market conditions & the fact shares aren't traded on SETS so are very illiquid / hard to buy.

Notable absentees from the cap table that are commonly present in other FTSE 350 stocks are the likes of Schroders, Norges Bank, Aviva, L&G, Invesco, Vanguard, Janus Henderson, Standard Life, AXA, JO Hambro, Investec, Ameriprise, Lazard & Rathbone. Of course there are also a multitude of US & international funds who will very likely avoid AIM shares or be unable to buy at present.

The final point is that PI's between HL & interactive investor still own only 2.2% of shares - I suspect this is about the lowest ratio on AIM - a very good sign IMO.

I'd agree Scarfell. On the face of it, it looks like a vanity purchase that takes them into a significant net debt position.

It seems a needlessly aggressive piece of business in the current climate.

Headline cost of €315m

"YouGov will fund the Acquisition with a non-pre-emptive underwritten equity placing of new ordinary shares expected to raise gross proceeds of approximately £55 million (representing approximately 4.9% of YouGov's issued share capital), with the remainder of the cash consideration financed by a fully committed bridge debt facility and cash on balance sheet. The terms of the placing were announced separately today"

Cash on balance sheet at last half year was £41m, so let's assume that is now around £50m & say they use £45m to give a ~£100m of cash contribution. That still leaves ~€215m to be funded via the fully committed bridge facility.

I simply can't see how they'll have got the facility for better than SONIA + 3%, which would be 8%, so the per annum interest expense will be around £15m.

On the financials of the acquisition;

"In the year to 31 December 2022, the Consumer Panel Business generated revenues of €134 million and adjusted profit before tax of €24 million" So that's £20m PBT, £14.8m PAT...

So the EPS accretion will surely be on an 'underlying EBITDA' basis, not reported, as interest expense appears to completely offset any gains.

My instinct is they've done this to ward off a takeover bid.

Interesting uplift in NAV… Wastefuel appear to be raising a $45m series B round at a very substantial premium, given significant credibility by BP.

If IX own ~36% and are valued at £21m with £6m cash vs the now £103m book value of their stake, surely someone will make an offer for them? I can’t ever recall such an extreme discount to NAV…

Got to be worth a small punt?

As per the website, interest income figures for Q2 are to be published on the w/c 10th July, presumably alongside a trading update.

It'll certainly be interesting to see how the dynamics have developed in Q2, their first interest rate swap for £205m at 4.1% commenced in June, with the second larger one for $400m commencing in August at 4.14%. With rates still showing no sign of peaking & a return to the 2% inflation target not expected until mid 2025, you'd have to wonder at what stage the market will start to price in the value to Alpha of global rates remaining above 3% for the rest of the decade, in line with the pre 2008 world.

Ps. If you model client cash balances as averaging £1.6b this year & increasing by £200m each year out to 2030, ending at £3b, a 4% average rate for 2023, 24& 25 and then a 3% average rate for the remainder and apply an 8% discount rate to account for the time value of money, the present value of those cash flow is ~£450m (absolute value ~£600m), so worth over £10 a share. Not bad for a current AIM company!

Of course you could then go further & estimate the incremental ROCE driven by these cash flows at the historic Alpha average of ~24%, which would deliver a huge uplift in future year forecasts, but we'll leave that to a future capital markets day, assuming one would be tied to drumming up interest ahead of a 250 listing ;)

Hi Mozax, definitely a good call to take some profits - it's AIM after all. Not keen on Made Tech as an investment as gross margins are poor and public sector budgets are under pressure. Could be a good trade though based on historic movements - not one for me though. Good luck and obviously not investment advice..

Hopefully they did - it was a long wait from the initial announcement so the lack of interest does make sense!

Here's a budget breakdown of the original $4.4b CYBHI masterplan, as you can see $561m was originally flagged for the 'Behavioral Health Services and Supports Platform'.

https://sbud.senate.ca.gov/sites/sbud.senate.ca.gov/files/Sub_3_Attachment_Children_and_Youth_Behavioral_Health_Initiative_Handout.pdf

We now know that Kooth has been allocated around 33% of this budget, with a similar amount likely going to Brightline who will be looking after the 0-12 age group. I presume that the remaining 33% of the original budget has been held is reserve to support additional platform growth in the future, or reallocated elsewhere given Cali's budget problems...

Note that Kooth announced today that they will explore opportunities to support the 0-12 age group moving forwards, this is notable because they would have very likely won the whole contract if they had been able to support this age group as the initial plan was for a single vendor solution, rather than the two vendor solution they ended up with.

Share price wise it's very difficult to call where this goes from here in the short term. It's arguably on the worst possible market for a growth stock, as liquidity is awful & many international investors simply aren't able to buy SETSqx (market maker driven) stocks. My suspicion is we'll see some drift due to an II or two taking profit & then the real rise will happen as new state wins are announced & particularly when revenues (and profit) starts rolling in.

Great to see a listed UK based small cap making global moves, it's very unusual in today's world!

Very happy with that update from a 260p entry a few weeks back :)

Amazing that nobody paid a single bit of attention to any of the last few items I posted, that’s AIM for you! Not often you see a premium raise like that and also very rare to see such a significant contract with a US government body. My negatives would be that we don’t know how much is usage based, what their commitment to promotional spend is & how the revenues are timed. Either way, a big step forward. Well done Kooth!

Tangible NAV is around $15-25m, depending on the cash balance. That works out at 5-10p a share, exactly where this is trading. They've already flagged impairments for Red Cerberus & Versus Evil in the next results and more will surely follow.

If you use your cash balance to acquire IP and then write off that IP then you've effectively transferred shareholder value straight out of the company & into the pockets of the previous IP owners. Clever strategy, not.

Wow, so the company can actually disclose a TR1 seller then? Incredible. Funny that this holding wasn't previously disclosed on the major shareholder listing; https://www.tinybuildinvestors.com/key-shareholders

I wonder if the TR1's were going to the old CFO's junk inbox? In reality nobody has a clue who is buying or selling the big chunks here.

@harchris, phase 4 completed on 17th Jan and phase 5 on 21st June = 155 calendar days, the gap from phase 3 completion until phase 4 completion was 138 calendar days. Get it?

Having started some basic research to educate myself on MTD's, this 2010 paper looks interesting as it discusses traditional 'rule based designs' vs model based designs, starting with the 3+3 dosing method and it's variants, one of which AVCT appear to be using;

https://www.ncbi.nlm.nih.gov/pmc/articles/PMC2684552/

Table 3 is excellent as it lists ~25 first-in-human phase I clinical trials for anticancer agents that were eventually approved by the US FDA & how many dose levels they had...

24 of the 25 drugs have a disclosed MTD with an average of 7.4 levels. 10 of 24 completed after 4 or 5 levels and a further 4 completed after 6 levels. However, the remaining 10 took anything from 7 to 15 levels with a mean of 10.9 and a max of 15 (Temozolomide)

So it appears to me that it's anyone's guess when a MTD will be reached here.

So yes, my first post may have been naïve re. reasons for not jumping to 500mg, however the point remains that there are serious commercial risks to the approach AVCT are taking. I.e. if it did take the 15 dose levels of Temozolomide & the average time from completion of one level to the next remained around the 135 days then the P1a wouldn't complete until March 2027.

Haha. You can always rely on an aggressive response to any questions on this board. It was an honest question - I'm not going to trawl back through dozens of presentations & RNS releases to try and figure it out. Commercially they need to reach MTD ASAP. I'll leave you lot to it in the meantime - bon voyage.

Interesting to analyse some elements of the dose escalations phases & assess AVCT's strategy;

11/08/21 - First patient dosed in phase 1

03/02/22 - Phase 1 Complete - Dose 80mg - time for phase = 176 calendar days

29/06/22 - Phase 2 Complete - Dose 120mg - 146 calendar days - 50% dose increase

01/09/22 - Phase 3 Complete - Dose 160mg - 64 calendar days - 33% dose increase

17/01/23 - Phase 4 Complete - Dose 200mg - 138 calendar days - 25% dose increase

21/06/23 - Phase 5 Complete - Dose 250mg - 155 calendar days - 25% dose increase

Phase 6 - 310mg - 24% dose increase

The average time between dose escalations has been 135 calendar days, although that is impacted by the anomalous 64 days between phases 2 & 3. We can therefore estimate that Phase 6 is likely to complete around November 2023 & if that doesn't find the MTD then Phase 7 would be mid March 2024.

So a best case scenario right now would be for the Phase 1b to kick off early 2024 & get a read out around this time next year if a strong efficacy signal is detected at the halfway point. Clearly if a Phase 7/8/9 is required then you can push this back by 4 month intervals

What I don't understand is why the relative dosage increases have progressively declined in each dose escalation phase & who is driving this process?

I.e. The absolute increase from P1 to P2 was 40mg / 50% relative, but the relative increase has fallen for each stage...

Had they retained the 50% relative increase from P1 to P2 throughout the subsequent escalations then the profile would have been; 80/120/180/270/405/607

Instead, Phase 6 is only reaching 310mg. If the final MTD is actually ~500mg & relative increases continue to decline towards 20% then the Phase 1a won't complete until December 2024 assuming the 135 day average interval is maintained, with a profile of 80/120/160/200/250/310/380/460/550

Clearly there are significant commercial implications of taking several years to determine MTD;

- The cost of running trials + overhead burn

- The patent life of both the platform & drug reduces & present value of future on patent dox sales diminishes

A sensible question for management going forwards could therefore be, why not run any dose 7 escalation at a much higher level - i.e. 500mg - to rule out the risk that the MTD is way higher than standard dox?

Until an MTD is reached this threatens to become a highly frustrating investment for holders.

Glad to see them get FDA, combined with last weeks TCET news it could / should mark the turning point for shares here. A near 3 year FDA process must have been incredibly exhaustive & stands them in good stead.

850k volume after hours on NASDAQ which is equivalent to 1.7m ordinary shares - pretty impressive considering the news release came at 6pm / 11pm UK time. A bonus to be able to buy this AM sub £1, although very difficult to get any volume. Now being held at £1 despite being no online quote to buy for over 10 minutes...

Still a big seller around as you can buy at the 7p bid price. Ps. Luke Burtis left a few months ago so you can add his 14m shares to any II overhang.

Plenty of sellers left judging by the 1.25m sold at 7p followed by around 500k at 7.5p and another 200k at 7p just now. This share has been bottomless since the backside fell out it in Feb. Once thing is for sure, Amati / Paul Jourdan have been taken to the cleaners.