Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
A number of new posters here turned up on the RNS yesterday. People saying the RNS was fantastic really don’t have a clue. It was what we had already been told it has just been formalised now. The H2H study failed its primary end point. Over a year the results are equivalent which is positive. This is one of the reasons the share price dropped earlier in the year when they declared the error in the analysis. The other is the time it’s taking to get a US deal. It dropped a bit due to Coronavirus but it’s the US deal really driving the price.
I expect this to drift back to 90p now as people who jumped in on the RNS realise what it was. Check the chart, every time this makes up ground it drifts back.
The big prize is the US deal due end of summer (August or by 23rd Sept but open to interpretation). You have to bear in mind we were promised this In 2019 so almost a years down the road. I am confident it will come in 2020 though hence this is a hold. The sp will likely hit 170p+ when it does land. But this will drift as people realised the timescales are longer than they expected once they actually do their research.
I think this may be the precursor to releasing some initial lab validation S&S results for the LFT ahead of the clinical validation results which will take a few weeks. We could hear something shortly
I agree. You might think it’s just lucky timing but what’s the bet Avacta/Cytiva we’re talking to the FDA about the requirements whilst they were being drafted and were aware of the release date. AS making none of the same mistakes by rushing, releasing preliminary data or communicating fixed dates in the development/approval process. Each milestone is completed right first time. Such a class act
It think Avacta and Cytiva are working closely with various potential manufacturing partners to optimise the LFT for volume production. We need 20 millions tests a month to get started. AS told us the LFT works. I think the test performance is probably being traded off for manufacturing transfer speed and scalability. At least that’s what I’d be doing. We need a test to serve the market not the best performing LFT possible. I don’t know a lot about LFT design but given what AS has said so far about talking to manufacturing partners yet no deal so far I think they are completing some up front design for manufacture work to ensure we get the right partners in place who can meet the demand. This process will inevitably involve changing the LFT performance input variables hence Cytiva will be in the middle of it and we haven’t yet locked down the final design.
I think the next LFT RNS could be huge. I’d rather see (the market wants) 20m tests a month at 90% sensitivity than 100k tests a month at 98%.
Forget two versions for now as that just adds in extra complexity but certainly an option for the future.
We also don’t know Avacta’s Affimer manufacturing capacity. Could this be a current constraint? They said some of the £10m was to be used to scale that up. Could we be looking at outsourcing the Affimer production? Again, it all depends on the number needed to achieve the test performance.
brightspark, They didn’t quote any S&S numbers in the BAMS RNS so would expect there to not be any in a ‘LFT prototype ready’ RNS. Whilst they will have some lab trial numbers it’s the clinical validation ones that are important to securing huge orders. The more relevant news in the short term is who is making them, how many and when. We may only find out who to start with.
RD your numbers are out by a factor of 1000. In your example they would need to sell 850 million tests to hit £1.7bn profit. Whilst these are huge numbers AS has stated many times in various presentations that ‘hundreds of millions of antigen tests will be required per month’.
The expected costs and sale price(s) were shown in an early presentation on 6th May. However I can’t find the one on the website with slide I’ve taken a screen shot of. It said ‘A Covid-19 antigen test strip is expected to cost ~$2 to manufacture, sell to consumers for ~30 and...in bulk for ~$15 per test.
By my calcs to hit your profit figure (£1.7bn) we need to sell ~190 million tests which is ~15.8 million tests per month. Whilst a lot it’s certainly within the realm of possibility if the test performs as good as we hope it will.
When you are talking these numbers it’s clear that success now is all down to manufacturing capacity and ramp up.
If Avacta did achieve this then the sp would be way in excess of £10 in my view.
Avacta are doing a great job in knocking down the challenges of bringing a mass screening rapid POC antigen test to market.
Secure capital and build team - check
Nail the sensitivity and specificity - check
Gain access to clinical samples - check
Secure required manufacturing capacity to meet demand - watch this space
Set up global distribution network - check
The quality of the partnerships/collaborations speaks volumes. It’s clear AS is letting his actions do the talking. I think he’s being very smart in not releasing any early S&S results or provisional orders. What’s the point. It’s the clinical validation and big contracts that are important.
Something is brewing in the manufacturing space. Another of the key challenges highlighted by the company. AS has been signposting it for a while now. The fact we haven’t heard anything yet makes me think he’s working on something big. I’m now expecting something like the RTC type set up with the government facilitating or a big industry collaboration. Makes sense to go big from the start if the demand is set to be as astronomical as indicated/we can see. My confidence in Avacta is only building
It’s all too easy to calculate your alternate universe net worth on all those trades you could have made. It’s human nature. This year for me it’s TSLA, BYND, EUA, TXP, GDR. In fairness I’ve timed a few right and also dodged a couple of bullets. I try to look forward, continuously research and focus on why I’m invested. I’m not losing any sleep sitting on Avacta whilst other shares do their thing. The next leg up for Avacta will come soon
Yes I agree Energyshares. The UoS trail is no doubt designed around and focused on the optigene test. Therefore it is the optigene trial however it’s clear from the statement that samples will be used to evaluate the Avacta test(s) amongst others. Which test we don’t know. As DW said in the labroots webinar, access to patient samples is a challenge. It seems like Avacta have reached out to the gov for help and it’s being provided. We should therefore get some feedback of the back of this even if it’s just the initial 100 odd samples for approvals results.
Casajuma, are you saying because you called a placing on some AIM tiddler you know what is going to happen with the RR share price? Small cap companies on AIM do placings all the time. It’s how they fund their business. Funniest thing I’ve read in a long time.
You may be right with RR but you may be wrong. You are just guessing. It will take some pretty bad news or a market correction to sink RR to 200p by the end of July. Given we just had a trading update on Thursday it would have to be something no one can see coming...
What’s lead you believe that AW as I’ve not seen any news to confirm your view? Most on here said a LFT out by end of Aug. I think you suggested September.
As news on progress is released through July and August to the point the test is on the market do you think the sp will be higher or lower over that time?
Whilst we all want the sp to rise and do well so we can get an increasing return on our investment some (mainly just Global) are missing the big picture here. The sp will go up and down, it’s what it does. Instead of focusing on the hour by hour sp movements focus on what the company is developing and where we are against those development milestones. Getting distracted by the sp some are missing the huge opportunity here that is staring them right in the face!
Chengdo, that would be the big one. Huge market, massive problems there and plenty of money to buy tests. I think it may take some time to get that deal done around FDA approval. The US market can be a tough nut to crack as I’m seeing on a couple of my other holdings.
NK, I’m not sure any sensitivity and specificity data will be released when the prototype is ready. At least is wasn’t for the BAMS test. If it was it would potentially light a rocket under the sp, given what AS has alluded to being achievable, but I expect that data to be released after the clinical validation (more meaningful and what will be used to approve the test). I expect the next LFT RNS to say prototype ready, partner(s) signed up and tech transfer starting whilst clinical validation in process. AS might say the test meets the expectations but then we already have been told this. I’m intrigued to see who the UK manufacturing partner(s) is/are more than anything. As AS has stated it’s all just a process now the hard work is done and the test works.