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@GLR, this is from Edison's May 2020 research note;

"Nanoco has not revealed its estimates of the potential pay-out if the litigation is successful but states that since April 2015 Samsung has sold 14 million TVs deploying quantum dots based on Nanoco IP. These TVs had an average sales price of US$2,200–2,500 compared with the average price of a top of the range TV without QDs of c US$1,000. The value of the lost revenue to Nanoco this represents has not been disclosed. Had the alleged patent infringement not taken place, we believe Nanoco would have collected royalties from its partners, primarily Dow Chemical, which
would potentially be supplying QDs to Samsung in volumes higher than Nanoco could produce itself in Runcorn. If we assume that the cost of the QDs in each TV is equivalent to 10% of the uplift in price between QD and non-QD TV displays, and that Nanoco would have received a 12% royalty (as per our May 2017 note) on these QDs, this represents US$14.4–18.0 lost revenue per TV display or US$200–250m."

The 2017 note said;

"Nanoco Group operates a hybrid IP licensing and material supply model. Its two licensees, Dow Chemical and Merck, are both well-established suppliers into the display marketplace and will pay Nanoco a low double-digit percentage royalty of value of their product sold."

Applying the $14.4-18 in lost revenue per TV to 36m TV's sold to June 2022 = $518-648m. Say they sold another 5m in H222 and the figure becomes $590-738m.

Indeed at a run rate of 10m unit sales per annum, NANO would be earning $144-180m per annum in royalties back on Edison's workings.

Also bear in mind that at 10m sales run rate, Samsung is making >$20b in QLED revenues per annum... even assuming a slim 10% operating margin, paying Nano $1b compensation + $180m per annum isn't going to touch the sides.

Now ask yourself why NANO would dream of settling pre trial unless Samsung had agreed to something along the lines of the methodology suggested by Edison? Why would they even entertain it?

Brilliant news for long term holders here, really pleased for everyone involved.

The logic surely has to be this; why would Nanoco agree to a deal pre trial if it wasn't going to be company making? Never, ever going to happen IMO. A very significant lump sum back payment + ongoing royalty fees looks odds on.

The conversation surely went something along the lines of; what do you want from us to stop this going to trial? I.e. name you price & future requirements and we'll pay it. Happy days.

Lombard will be reducing their 64m shareholding substantially, which is what is creating the share price headwind (as it did post trial announcement last month when the price went from 44p back to 36p. Amazing that you can currently buy for just 28% more than the high reached on 3rd Jan...

Once they are done this will rapidly move back over 70p and beyond, how much further it goes from there depends on the detail in the final agreement, I suspect a market cap of around £500m / £1.50 could be the end destination.

Still moving nicely on up - a gap fill to ~£2.30 looks fairly likely at present, could go higher on a positive trading update of course...

Added a few here - reading between the lines I think it's a fair to assume that the board wouldn't have signed off a new Japan JV unless Xmas trading was at least in line or ahead of expectations. Shame that this wisdom hadn't occurred to me yesterday morning at 158p, however there is plenty of upside from these levels if trading has indeed been better than expected!

Very positive start to the year indeed with significant improvement in the fundamentals via Newcrest's clear intent to push ahead + the gold price breaking out.

Technically it's starting to look very interesting too; GGP has been in a downtrend channel since Feb 2021 which has ground the share price down from 24p to the current levels. It's also been below the 200DMA since mid March 2021 when it dropped below 22p. Unsurprisingly, the share price has shown a lot more stability since the big boys came on board last August and has been basing in the 7-9p area. The 2 year downtrend resistance line now sits at 9.3p with the 200 DMA just above at 10.1p.

After such a long downtrend any break of resistance could be explosive, just trading sideways at the 8.2p level would see the resistance taken out by early March but there is every chance it happens before then IMO.

On further digging I don't think it's Durvalumab given that's an AZ drug & it just got EU approval for biliary tract cancer on 21st December... so there is nothing 'experimental' about it whatsoever.

https://www.astrazeneca.com/media-centre/press-releases/2022/imfinzi-approved-in-eu-for-biliary-tract-cancer.html

Instead I think it's this trial run by Incyte Corporation ; https://clinicaltrials.gov/ct2/show/NCT03656536?term=christie%27s&cond=Bile+Duct+Cancer&draw=2&rank=4

Juan Valle is referenced in a July 2020 paper on the P2 trial / overall landscape;

https://www.futuremedicine.com/doi/10.2217/fon-2020-0429

Complicated area... I'll be quiet now ;)

Doh, you may well be right...

I made the assumption that the infusion they were talking about was the combination therapy, however when you look at the clinical trial records this doesn't quite line up with the study arm start dates.

For RXC004, the combination arm for colorectal cancer is infusion of nivolumab + oral tablet

https://clinicaltrials.gov/ct2/show/NCT04907539?cond=RXC004&draw=2&rank=2

However, for the separate Biliary tract trial the arm to date has only been treated with RXC004 as a monotherapy;

https://clinicaltrials.gov/ct2/show/NCT04907851?cond=RXC004&draw=2&rank=1

It's only now that Keytruda / Pembrolizumab has been added that patients will be getting the combination therapy which is tablet + intravenous infusion (RNS 16th December)

I guess we'll have to wait and see... the market makers were very quick to move it up, although that may well be because they weren't aware of the reason for the volume / it's so illiquid!

Yep, the first news reports were in August / September and reference RXC004; https://www.itv.com/news/border/2022-09-02/cant-believe-it-woman-survives-cancer-thanks-to-experimental-drug

I suspect the reason the media coverage is so widespread is due to this being the second account of an apparent complete cure... it also seems to be more noteworthy because the patient had multiple tumours.

All over the media, probably the most widespread coverage I've seen;

https://www.bbc.co.uk/news/uk-england-manchester-64119316
https://www.theguardian.com/science/2022/dec/30/man-year-to-live-now-cancer-free-after-immunotherapy-trial
https://www.dailymail.co.uk/news/article-11583993/Patient-told-year-live-cancer-free-new-drug-regime-trial.html
https://www.express.co.uk/life-style/health/1715110/bile-duct-cancer-robert-glynn-drug-trial-treatment
https://www.thetimes.co.uk/article/i-had-months-to-live-then-immunotherapy-killed-my-cancer-tumours-czldjqbdg

This is perhaps the most striking quote I've read, which was in the Guardian coverage;

"About 1,000 people in the UK are diagnosed with bile duct cancer every year. For those, like Glynn, whose cancer has spread to other organs, only one in 50 people (2%) lived for at least five years after their diagnosis, according to US studies cited by Liver Cancer UK."

The fact that RXC004 has helped to completely clear the disease seems astonishing to me. If it has a similar impact in the multiple oncology indications it's being tested on then I suspect we have a multi billion £ company on our hands here...

Bought in first thing, it was wonderful reading those articles and knowing exactly who the company was :)

I can vouch for Korda, it was 2 v 1 at 21-21.5 and then someone decided to drop 125k. It’s a matter of time before this breaks towards 25p IMO, only those with no patience or who are over exposed will be selling with context news getting closer every day.

“Company remains insolvent with £80m of net debt.”

Can you not read Malik?

“The cash proceeds received from the sale of Helios, along with a portion of the borrowings under the asset-backed loan, will be used to repay all existing indebtedness, prepayment interest, and other fees of approximately $84 million (£70 million) and $1 million (£1 million), owed to NYDIG ABL LLC and North Mill Commercial Finance, LLC, respectively. Upon this repayment, approximately $6 million (£5 million) will be returned to the Company from a collateral account controlled by NYDIG ABL LLC.”

ALL EXISTING INDEBTEDNESS

I’m not a holder here but the only debt post thus deal will be the new $35m 3 year galaxy facility secured against the 23k Helios machines.

Interesting to see where it opens…

Seems a well thought out and positive step. Prior to the LTIP the 2 Execs held 0.62% of share capital that is currently worth ~£225k. This gives them real skin in the game of up to 17.2m shares if they execute the plan, that’s worth around £3.7m today but would be around £8.5m each if they get shares over £1. Regardless of their basic salaries that’s got to be worth working your backside off & doing everything possible to avoid dilution.

“It is Remco's desire to retain the Executives during the next, demanding phase of growth, leading the Company on to become an exemplary success story.”

Certainly what you want to hear and also aligns to their newly formed relationship with HMG.

It also makes complete sense to get this sorted before any contract signing is RNS’d!

I said the benefit to DEST is almost exactly the same, I didn't mention anything about the impact on share capital... it's better for shareholders to receive an upfront as there is no dilution but an equity investment is actually a bigger commitment on the pharma's part than a simple up front.

I also don't know why you've decided it's a medium sized pharma from, the RNS says ' US Pharmaceutical company', that could be anyone from Lily / Gilead to a sub $1b entity, nobody knows outside of DEST...

Anyway, it's semantics at present, it is very good news for a heavily oversold company. Let's hope momentum picks up from here and new & old holders are rewarded.

PS. We have just broken the 200 DMA which sat at 40.6p, first time it's been above that level since August 2021 when it broke through 116p.

Go back a year earlier to 2020 and there was a similar 200 DMA break at 38p, that led to a rise to 112p within 3 months...

Could something similar happen again? Nearly 200% upside back to those levels makes this very interesting indeed.

sajy, why do you think any pharma partner would prefer to invest in Dest rather than simply give them an up front cash payment? The benefit to Dest is almost exactly the same, however it's more complex for the pharma as they'll then have a minority interest in a partner.

@Candid, the market seems to be cottoning on a bit more now - I suspect it's because the major news was somewhat hidden in the trading update - if you didn't look beyond the headline you'd have missed it!

@maccking, that was a spookily timed cross post at 3.47...!

I agree with you, if you want to invest in an AIM listed small cap pharma that could change the world then I don't think you can do any better than REDX. It's a real shame that the listing is so illiquid as it prevents anyone buying in size, in the current environment you simply aren't going to find investors willing to drive a share price 20% higher in order to build a meaningful position in the stock, there are also very few sellers but any that do appear have an instant impact on the price.

Of course of a 5-10 year basis this is irrelevant & this could be a very rewarding hold - should the Jazz & AZ collabs emulate the success of the BTK inhibitor program sold to Loxo and then to Lily then anything is possible. It'll need to be on NASDAQ though as liquidity is critical for new II's to buy into the story.

I'll be following progress closely and will post thoughts as and when events unfold.

The critical elements of any deal will be;

- Size of up front
- Who the P3 partner is
- Future milestone terms on P3 success / regulatory approval
- Future royalty rate on net sales

- Ideally the up front will be >$25m given this is a P3 ready asset with a large TAM, it’s very different to the likes of EVG’s deal which was P1. A large up front provides runway for licensing their other asset.

- Ideally the partner will be big pharma or a company with a market cap >$10b, someone like Jazz Pharmaceuticals would be a great candidate given their Ireland based and have significant experience of progressing / marketing new drugs.

- Milestones will be valuable given their relatively close proximity, a P3 success in 2 years that saw a milestone of $100m would add significant value to DEST on a risked NAV basis

- I’m looking for royalty rates of 10-20% which would provide material cash flow, shore capitals recent broker note estimated 15%

All in all I think this has very good risk reward from current levels and have bought in this morning. I suspect this gets to £1+ on a successful deal (based on it opening at £1.70 on P2 trial results and testing £2.50 later that morning).

As I said on 30/11, my initial impressions were that REDX is extremely exciting, but I had a lot of research to do. 3 weeks later I feel I have a much more balanced view of the company.

In terms of science & progress, I don’t think there is any doubt that this is the best sub £300m market cap biotech on LSE. Pipeline wise they are streets ahead of AVCT and SCLP. The half year report was a joy to read and there is little doubt that they deserve their options (and at least they aren’t zero cost…).

As an investment though I find it difficult to get excited about at this moment in time though, there are 335m shares in issue and £15.9m of convertibles exercisable at 15p which takes fully diluted capital to 441m, to be prudent we can also add 45m options to this tally although I doubt all of them will be exercised. Total issued share capital is therefore 486m, giving a market cap at 54p of £262m.

They flagged yesterday that their current £53m cash will take them to Q124, which is quite a significant cash burn & representative of the fact they are spinning a lot of plates (3 P2 trials + pre clinical). By this time next year RXC004 & 007 will hopefully have great P2 data and RXC008 will be entering the clinic. In this scenario a share price of £1 gives a fully diluted market cap of £487m from which they would presumably need to raise a lot more capital to progress either P2 into a pivotal P3, I’d estimate £100m for each drug. The alternative would to find a partner and reduce the overall economic ownership in exchange for cash.

My assumption is that if the 3 P2’s produce outstanding data they’ll pursue a NASDAQ listing and raise the capital required and relocate the listing. A £200m raise at £1 would leave a post money market cap of £700m, which based on current US valuations for emerging biotechs feels about right. Post P3 is when major jumps occur (see former AIM co. Verona Pharma which has risen from $4 to $20 in the last 5 months off the back of 2x successful P3’s in COPD and now sits at $1.4b cap).

This is what I view as the best case scenario given the current illiquid AIM listing. If any of the P2’s fail then the share price will get hammered and any future progress will be under threat. So on a probability weighted average valuation I estimate;

50% chance of 3x P3 success, SP £1
25% chance RXC004 success, 007 failure - SP 50p
25% chance neither succeeds - SP £0.20

Target price: 67.5p

So the current share price doesn’t have much upside IMO. Even stretching the 3x P3 success to £1.50 gives a weighted target of 92.5p, so not massive upside…

The time I would look to buy would be post P2 success if the price was around current levels or on the announcement of a US listing and major capital raise. There is huge potential in the 3-5 year range if they can get a drug to market and then reinvest the profit into pipeline development, however it’s a long road and many hurdles exist along the way… GLA current investors.

If the just announced YGEN placing is a guide then CREO are going to be raising around 5p…

I thought it interesting that Cenkos published a substantial broker research note on 23rd November with forecasts out to 2027, it felt to me as if this had been produced for a placing and then released for the market. Shares held around 40p in the weeks beforehand which I suspect was the intended placing price, the recent plunge / lack of news tells me that they were unable to get what they wanted and have withdrawn the offer for the time being.

More volume at 25p but I’m not touching it until they are financed. FWIW the broker note forecast cash requirements of ~£18m before they hit cash flow breakeven in 2025, so a placing of £20m would be my guess…

Wow, this market is getting scary. 12p a share at the start of 2022 and now raising at 0.3p…