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Had a further thought overnight - the extension of the half life must open up the possibility that either the dose, or the doing frequency, could be lowered significantly, as the chemo drug remains active in the tumour for days and weeks instead of hours, so doesn’t need constant topping up. And that could have significant implications for further improving the safety and efficacy of AVA6000 and the current pipeline, even before all of the other aspects.

Not long to wait.

I have to say that I thought that yesterday's presentation was pretty average, not because of the content, but because the delivery was so rooted in the science that I think the opportunity to land some really important messages wasn't taken. That said, I think we heard some very exciting things yesterday, that I hope will be confirmed when we get the pipeline news. I’m joining a few dots here, but I think we have to.

It is clear that there is now significant effort going into the next generation of Precision candidates and the next phase of Avacta’s plans for the platform will see it develop the chemistry very materially in a number of important ways:

Firstly, they are actively looking at completely new warheads - not much info on those yet, but it sounds like they will quite likely be the very latest generation of chemotherapies that are either orders of magnitude more powerful than existing drugs, or have (exquisite?) specificity against particular tumour types, such as pancreatic cancer or breast cancer, but which currently lack the mechanism of delivery to get them to the tumour (and so cannot be used at all currently due to safety concerns).

Secondly, the chemistry is being further refined to modulate the release mechanism, extending the time that the chemo remains effective against the tumour from hours to days (or even weeks).

Thirdly, additional binders, both chemical and biological, are being added to further influence the behaviour of the drug when it arrives at the tumour site.

Fourthly, we now know that the stroma cells continue to emit FAP, even when the FAP from the tumour is low (or even FAP negative). And we know that those cells are impacted much less adversely than the tumour cells are, because the chemo drugs affect the fastest growing cells more than they affect slower growing cells, so there isn't a risk of the FAP levels falling as the tumour shrinks.

So, what do you get when you join all of the dots on that lot? I think that maybe you get a platform that has the potential to not only deliver a highly potent warhead straight into the TME, but said warhead can then be bound to its target (the stroma cells), with the effective life of the warhead also extended from hours to days or weeks. If this is what is being planned, it would not only increase the impact of the warhead on the tumour cells (through the “bystander effect” that CC placed such huge importance on), it would further reduce the residual amounts of chemo elsewhere in the body (potentially to negligible levels), because the warhead is not simply cleaved in the TME, it’s then anchored within the TME when it gets released.

If that's what the pipeline looks like, then I can see why CC was so excited. And it would be ripe for a brand new collaboration with a major, to provide the endorsement and part of the funding that they are looking for.

Yes it could - hence the uncertainty. But that uncertainty is currently weighted in the SP as a racing certainty, which it isn’t.

Has absolutely nothing to do with the value of the company - how can a company with hundreds of millions of dollars worth of contracted revenue (not pipeline, CONTRACTED orders) be valued just £2m, which is less than half the value of cash they have, let alone their IP, cutting edge capabilities and the future value of those contracts (plus those yet to be announced).

The answer is uncertainty - the market, and PIs in particular, hate uncertainty and while the business has now likely turned the corner, the uncertainty about future returns to shareholders remains, which is why the SP is on its *rse. But sentiment is never a good way to value a business - fundamentals are - and that’s why, even with the shares now trading below 20% of what ROX paid for theirs in the placing (which BTW is considerably more than many PIs have paid if they’ve averaged down), they are still smiling. Why? Because they know what they have bought into here and they know that, even at 10p per share, it’s a steal.

The Company is one of only a few companies capable of designing and supplying the higher-spec chips built on the most advanced semiconductor technologies, selling into a range of hyper growth end markets such as high-performance computing, automotive, artificial intelligence, VR/AR, video analytics, image processing, mobile networking and data centres. Sondrel designs have enabled products by leading technology brands including Apple (iPhone), Sony (PlayStation), Meta's (Oculus), Samsung, Google and Sony smartphones, JVC (prosumer camcorders), Tesla and Mercedes-Benz cars.

Sondrel is well-established, with a 20-year track record of successful delivery, supported by long standing ecosystem partnerships including Arm, TSMC and Samsung. Headquartered in the UK, Sondrel has a global presence with offices in UK, USA, China, India and Morocco.

Isn’t this, and the $200m+ in CONTRACTED future revenues from the names listed within it, the answer to your question Jake? And ROX know it too.

I know how to read the accounts Kabba. As is made clear in the financial statements, the liabilities you quote include both trade payables and lease costs, both of which are normal for any business and will be paid for by future revenues received for the services they relate to (which inevitably lags the costs being incurred).

It is clearly stated in the accounts that net debt at year-end was £0.9 million.

Kabaa, I am taking into account the loss making position, which is expected to become positive from Q4, but what debts do they have? The CLNs (from ROX) have converted to equity, hence why they are now the majority shareholder. They have the cash they need for working capital from the CLNs and the rest of the ROX subscription and they expect to be profitable from Q4, so no need for further fundraise unless it’s to fund an acquisition, which would be value adding.

The SP is on the floor because of the delisting, but that’s not the end for SND, it’s a new beginning. The question is whether those PIs who hold beyond the delisting will see a return. I think there are material risks, but the rewards are material too. I’ve traded a fair bit over the last couple of months, but I’m holding onto a good chunk of shares in the private company as a high risk high reward investment. I already hold shares in four unlisted companies (only one of which has ever been listed), so I understand the risks.

Also worth adding what ROX say about themselves on their website, which is interesting

OUR APPROACH

Our approach hinges on forming strong partnerships with visionary management teams and co-investors to create substantial value by anticipating disruptive trends in carefully selected fields. Through shared financial interests, we build robust alliances, valuing these relationships as pivotal to our success.

We go beyond capital; we empower innovative leaders adept at navigating global markets. Our commitment extends to professionals who've commercialised their expertise and companies that have become indispensable to their clients.

Our partnership approach centres on collaborating with businesses that demonstrate clear leadership within their markets and the potential for global expansion. As partners, we encourage these organisations to invest in disruptive technologies, nurture talent, and champion growth initiatives.

We understand that the Return on Experience (ROX) is as critical as the Return on Investment (ROI) in our strategy. The value we bring extends beyond financial gains, encompassing the transformational experiences that drive our partners' and our own success.

BUSINESS STRATEGY

Our business strategy is centred on harnessing the transformative potential of technology to drive innovation.

We embrace the impact of digital technologies on enhancing the quality of life. Our innovation strategy focuses on investing in the value chain of tailored and innovative solutions, capitalising on leaps in technology, advanced data analytics, and the synergistic relationship between artificial intelligence and human experiences.

We actively seek out technology businesses, with valuations up to $25 million. By partnering with these businesses, we aim to facilitate their growth and amplify their impact on the ever-evolving landscape of healthtech and technology-driven solutions, including Employee Benefits.

In a bid to focus the discussion on something more tangible than what may or may not happen over the next few trading days, I've refreshed my previous post which I think sets out the investment case in terms of risk and reward.

In the short term, the only things that are likely to lead to any improvement in the SP are either a takeover offer from a party unconnected with current proceedings, or ROX offering to buy up any remaining shares before the delisting. On the former, that clearly remains a possibility, albeit unlikely now that the window of opportunity is narrowing fast. In some ways it would make strategic sense for a takeover offer to come when the SP is at its lowest, but it could also be argued that the current SP is largely irrelevant, as any offer would anyway need to be materially above 10p per share for ROX to accept it. That said, even at 10p SND is ridiculously undervalued, so it remains a possibility. On the latter, I can't see why ROX would make an offer before the delisting, as any such move would probably fall foul of the waiver (and in fact, I think I recall reading somewhere that they either not allowed to trade, or have undertaken not to). After delisting, both the above possibilities remain, but I think an offer from ROX immediately after the delisting is a distinct possibility.

While it's positive that a matched trading facility is being put in place, realistically I think there is unlikely to be much liquidity and trading on a day to day basis. That doesn't mean that the shares won't be tradeable, but it will be very difficult to determine a fair price, other than when we get the statutory information in the accounts etc. That said, JP Jenkins do publish the mid-point prices of the matched bargains that they strike, so any trades that do get made after the delisting should be visible, which might create some sense of a market value.

Beyond that, a takeover is always a strong possibility at any point and you would think that would become more likely over time, as the business grows and becomes profitable again (targeted by Q4 this year). There is also the possibility of relisting in the future, here or in the US, which is likely the most distant option for shareholders in terms of timeframes (likely 2-3 years minimum, I would guess). Presumably ROX is banking on one of these two options, as they will need an exit event to realise their gains, so a takeover or relisting probably represents both the most likely scenario and the one with the greatest returns, and I would expect that to be at many multiples of ROX's 10p entry point (so likely upwards of 10 times today's sp).

So, those are the scenarios as I see them - there is clearly risk in holding through into delisting (specifically that the minority shareholders get squeezed out by future corporate actions), but if that doesn't happen, the potential upside is very significant, and possibly huge.

I think SIPP may be different to ISA, but my recollection is that ii have advised they will transfer the ISA shares to a suitable trading account, or open one if one doesn’t exist already. Don’t know how that will work, as they obviously can’t be traded through that account, but presume it’s to provide a record of the holding. Isn’t the whole point of the matched bargain facility with JP Jenkins to avoid what you have been told?

Delisting is next week - Monday is the last day of trading.

Something’s afoot here - interesting few days ahead

I’ve only seen the one RNS today which was a director buying shares, which appears to be the reason for the sp rally today.

This is not surprising as directors are always best placed to understand the real value, so it’s reassuring to see them building their positions, even if it is off the back of all time lows. Wouldn’t be surprised to see a few more of these over the course of this week, as it will be the last opportunity to acquire shares on the open market ahead of the delisting. After that it will be matched bargains only, so sellers will set their price and buyers either take it or leave it. Will be interesting to see where the sp gets to over the next five days.

UncleJohn, I agree with you - a takeover is very possible in the current circumstance, for reasons that I have outlined previously. There is huge potential value here, it just needs someone to make a move. For the reasons outlined below, I think a takeover before delisting would be at a lower price than one afterwards, so I guess it just depends on whether there is sufficient appetite in the short term.

Beyond a takeover, I think that the delisting decision has clearly not been welcomed by the market, but there are a couple of things about Destiny that make the future as an unlisted (for now) company a bit different from so many other companies that have gone, or are going the same way.

Firstly, there is no majority shareholder, or even a group of majority shareholders. None of the major shareholders, directors included, hold more than 6% or 7% of the company, and collectively those who own more than 3% only own around one third of the shares in issue (and that's across a dozen or so different entities). So, we are not in the position where a majority shareholder gets to call all of the shots after delisting - quite the opposite in fact, we are in the position where anything the company decides to do will need the support of a very broad base of shareholders.

Secondly, and a point that has been completely overlooked by the market (because of the way the market values things), a fundraising or other financing deal has not been done ahead of the delisting. This is really important, because in other examples I have seen, the fundraising is done first (with the SP on its knees) and that creates massive dilution ahead of the delisting, both suppressing the SP further and introducing a majority shareholder who has a material level of control of the company after delisting. That hasn't happened here, the fundraising or other form of financing will be after the delisting and can be based on a much more sensible valuation than the shares in issue multiplied by the current SP, which as we know both drops ahead of a finance deal and then usually again once the deal is announced. The lack of liquidity in the shares of a delisted company may actually work in PI's favour in that circumstance, as the SP can't be trashed during the process of raising the finance. The company can negotiate from a position of intrinsic value, rather than the arbitrary value placed on the company by a market that knows a placing is coming.

So, for the above reasons, I think a takeover is very possible, but I also don't think it's not the only way that shareholders may see significant value from this, assuming the delisting goes ahead.

We now have the details of the proposed EGM and likely delisting date, which, given how close they already are to the 75% threshold is likely a formality now and SND will delist from 21 August.

Around 28% of the company is still held by smaller investors, including PI, so it's a minority, but not insignificant. Given the firming up of the dates, I've been re-testing my thinking about how this might now play out and I think there remain a number of outcomes for PIs from the point, which I've set out below. I'd be interested to hear from others about whether there are any others that I've not thought of.

In the short term, the only things that are likely to lead to any improvement in the SP are either a takeover offer from a party unconnected with current proceedings, or ROX offering to buy up any remaining shares before the delisting. On the former, I think that remains a possibility, albeit that the window of opportunity is narrowing. In some ways it would make strategic sense for a takeover offer to come when the SP is at its lowest, but it could also be argued that the current SP is largely irrelevant, as any offer would anyway need to be materially above 10p per share for ROX to accept it. That said, even at 10p SND is ridiculously undervalued, so it remains a possibility. On the latter, I can't see why ROX would make an offer before the delisting, as any such move would probably fall foul of the waiver (and in fact, I think I recall reading somewhere that they either not allowed to trade, or have undertaken not to).

After delisting, both the above possibilities remain, but I think an offer from ROX after the delisting is a distinct possibility. While it's positive that a matched trading facility is being put in place, realistically I think there is unlikely to be much liquidity and trading on a day to day basis. That doesn't mean that the shares won't be tradeable, but it will be very difficult to determine a fair price, other than when we get the statutory information in the accounts etc. So it would be easy for ROX to make an offer quite quickly (which could be above or below 10p a share) that some shareholders would find attractive.

Beyond that, a takeover is always a possibility and you would think that would become more likely over time, as the business grows and becomes profitable again. There is also the possibility of relisting in the future, which is likely the most distant option for shareholders in terms of timeframes (likely 3 years minimum, I would guess). That said, ROX must be banking on one of these two options, as they will need an exit event to realise their gains, so this probably represents the scenario with the greatest returns.

So, those are the options for PIs as I see them - there risk in holding through into delisting (specifically that the minority shareholders gets squeezed out by future corporate actions), but that does not come without reputational risk for ROX, so it's a finely balanced decision.

It’s only a proposal at the moment - circular will be issued in August and then needs an EGM and vote. Assuming it goes ahead, shares will still be traceable via matched bargain facility - all in the recent RNS’s.

I think this was a case of packaging up all of the bad news in last year’s numbers, against which a stronger performance in the current year can be demonstrated (which the forward looking statements point towards).

Two particular things of significance to note from the RNS:

1. SND expects to be EBITDA positive by Q4, which reduces the risk of further material funding being needed in the future.

2. There WILL be a matched trading facility for investors after the delisting - no doubt this will be through JP Jenkins or similar, in line with what other firms have done. This is a material change, as this was specifically excluded in previous announcements and means that there will be a mechanism for PIs to trade after the delisting.

Lots of people are clearly anxious about the prospect of delisting (for obvious reasons), but the sp drop (from a level that was already a historic low) now values the company at not much more than its cash position. And yet, this is a business with an existing partnership that’s expected to be worth hundreds of millions of dollars and a completely new class of antibiotic (XF73) that’s could transform the risk of post-surgical infections and is projecting peak annual revenues into the billions.

Is it any wonder that the Board are looking to take the business down an alternative route to what AIM is offering them? That said, I think there are three ways that existing shareholders could still see a significant return here:

1. Monday’s announcement prompts one of the current interested parties to firm up an offer of a partnership deal ahead of the vote, as they may see the competition heat up once the company goes private.

2. The ridiculous disconnect between the market cap and the value of Destiny’s assets prompts a takeover offer, which even at many multiples of today’s sp would be small change to a big pharma, who would then own all the assets, rather than simply a licence agreement.

3. Shareholders hold onto their shares through the transition and ride on the coat tails of the larger shareholders.

Of the three, PIs are obviously thinking that the third is the only viable option and are nervous about then being marginalised, but the current market conditions on AIM are not exactly attractive for PIs either. I also think that yesterday’s announcement itself makes the other two possibilities significantly more likely than they were, not least because it brings things to a head and creates a deadline to work towards.

I’m surprised by how little discussion there has been on here about the possible opportunities that might still present themselves here, as surely that’s key to any risk:reward decision?

Interesting comparison and yes, a lot of similarities. It could so easily happen here.

He did say that - it was a bit muffled, but that's exactly what he said. It was in response to the first question which was from someone in the room and the mic didn't pick it up very clearly as he was talking to the chap who asked the question (it was the only question from the room, all the rest were online).