Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
Interesting to note from the daily testing stats that, out of the c.1.8m tests being reported daily, only around 300k are PCR tests, so it would seem reasonable to infer that the balance (1.5m) are LFTs. If that's correct, it means that the UK is already doing 40m LFTs per month and that's with testing only currently taking place in some quite limited settings, with limited numbers of people.
I'd suggest that anyone who hasn't yet done so just runs some numbers on their calculator - if you're using the calculator on your phone, you'll need to turn it sideways, so that you don't run out of characters on the display :-)
I'm expecting an RNS tomorrow morning explaining that Avacta have successfully applied the Pre-Cision platform to it's first psychological target, enabling the phenomenon known as FOMO to take place continuously throughout the week, rather than in the limited doses that apply with conventional shares.
Alastair Smith said "The problem with conventional FOMO is that it can only really be used once each week at most, invariably on a Friday, and it's efficacy dwindles over time without a solid pipeline of news. By applying the Pre-Cision platform to FOMO, coupled with our novel perpetual news-flow engine, FOMO can now be expected every day of the week for many months to come, with no adverse side-effects or subsequent share price toxicity. We're in the process of reviewing our P1 results which are extremely encouraging for Avacta shareholders, but not such good news for shareholders of shares in the placebo group"
Good summary Investor - one thing stood out for me was the way that the investigations into having a combined second generation test are described:
" Avacta and Mologic are also exploring the possibility of combining Avacta's spike antigen test with Mologic's nucleocapsid antigen test[3] in a single device which would be a world first and has the potential to deliver the most sensitive rapid antigen test possible."
the words "deliver the most sensitive rapid antigen test possible" are interesting - they're not setting the bar at simply improving performance further, but aiming to reach 100% sensitivity alongside the 100% specificity they already have. If they can make that work, it may have profound implications not just for the Covid test, but also for any future LFT development for other diseases too, which will presumably all be constrained in similar ways. Perhaps affimers could be used to augment existing LFT performance in the same way that Precision is being used to augmenting existing chemotherapy drugs?
It may be spiteful, but is it just me who gets a warm feeling knowing that whoever it was who offloaded last Friday ahead of the trading update did so at the expense of missing out on this week's rise? Who says there's no such thing as Karma?
Only just watched the presentation and credit where it's due, I think that was a solid update that was clearly directed at many of the concerns that have been raised on this board in recent months. I thought Lyn was both contrite and candid and it was good to hear a bit more about the reasons for certain decisions (e.g. the decision to not get involved with broader testing because of the lab requirements and how that would impact the business).
It would be great to hear that sort of update on a more regular basis.
One thing we know about Lyn Rees is that he is absolutely focused on hitting his numbers, so the failure to do that must feel like a very personal failure to him. I hope that both he and the wider Board are mindful of the impact that the deferred revenue will have on the cash position and that any thoughts of further acquisitions are similarly deferred until the company is firmly cash generative. It's time to let the sales volumes catch up with the size of the distribution infrastructure, so the jam can start to flow today, rather then adding ever more jam machines that only ever provide the promise of jam tomorrow.
Conserve cash while the revenue base catches up with the cost base and the SP will then start to reflect the value of what's been built here - it's not rocket science.
More importantly, success with this first trial underpins the safety and efficacy of the whole PreCISION pro-drug platform, which is why they're already prepping the next three horses in the stable.
Success with Pro-doxorubixin opens the gateway to the whole chemotherapy market. Difficult to imagine why this wouldn't be conjugated with every single chemo drug in existence if / when it's proven to be safe and effective.
Jadam, just to be clear, what I actually said was "at the volumes they're currently reporting, the Covid testing feels relatively marginal".
We have been told that the testing revenue (not capacity) was c£0.5m over the last couple of months, which equates to c£3m per year (£250k x 12), hence the assertion that it feels relatively marginal (10-15% of total revenues). Potential is there to do more and they may yet announce a material scale up in either actual tests and/or capacity, but going on the latest update from the CEO himself, at this point the testing is a useful additional revenue stream and not much more. The flip side of this is that they have held onto the confidence in the end of year numbers, which suggests that the core business is motoring and may even now be doing better than expected, given the apparent slowdown in the Covid testing activity.
I agree Bakky - at the volumes they're currently reporting, the Covid testing feels relatively marginal, although I guess it kept the team busy when the core business dropped off earlier in the year. The negative is that it really felt like we were heading for our long awaited rerate back in September, but the Covid testing disappointed and that seems to be the thing that the market is currently responding to. I'm still optimistic that it will happen and while the progress made to date is frustratingly not reflected in the share price, it makes it an attractive proposition for new investors. Hopefully that will eventually feed through into some sustained buying, but I think it will need a really strong trigger to draw attention to the company - it still feels like one of the best kept secrets on AIM (and not in a good way!).
Bakky, I've posted my (positive) thoughts on the company's prospects many times before and would imagine that I have done more analysis than most on here of the potential for Yourgene's product range and distribution network to create a revenue generating powerhouse. I have no need to repeat my thoughts on that - simply look back over my previous posts if you want to see them. As I have said a few times recently, that doesn't mean that I can't call out the things that I think have been unimpressive lately and the Covid testing falls into that bracket in my view, as does some of the comms we've had over the past 12 months, which only ever provides an opaque glimpse of future prospects. It's easy for Lyn to stand up and tell us that they're hitting all their targets when he never discloses what they were or are.
Sentiment aside, the share price of any company is a fundamentally a function of two things:
1. The amount of money it generates (or is expected to generate)
2. The number of shares in issue
The latter has been growing like a weed in recent years (to coin a phrase), but the former has not kept pace - revenue growth has been impressive, but costs have grown rapidly too, so the operational gearing that Lyn and Adam Reynolds have often talked about simply hasn't been delivered yet. The thing that will deliver that is a significant sustained uplift in revenues without a corresponding uplift in costs - that's what will generate profits and consequently meaningful returns to shareholders, but we've been reassured that we're on the brink of break-even for three years and apparently still not achieved that.
So, in the absence of any transparency about the forward looking numbers, YGEN continues to be valued on its historic performance and the only time that will change is when we see a clear indicator that the business is now profitable (not just growing, but actually making profits that can be invested or returned to shareholders). That's the point at which the market will ascribe a sensible value to the business and until that point, it's just potential.
Ash, your original post did make me laugh: "It definitely would be prudent to reassure the market that our dual viral test is able to detect the new covid strain. Market sentiment around yourgene would surely improve. RNS tomorrow morning or over the next few days would be helpful."
So, we're basically hoping for an RNS that says: "The company is pleased to announce that the product which provided naff all in terms of revenue during the prior reporting period has been shown to detect the new Covid-19 variant and the company therefore remains confident that this product will continue to contribute naff all to revenues during the next reporting period".
Does anyone know when the notice about the supply of Clarigene tests being restricted to existing customers was removed from the website? From memory the notice went up two to three months ago, but just wondering if anyone spotted it being removed and whether it was removed before or after the latest update?
If there even is a rumour (which I doubt), it didn't start before the market closed - volume way too small for that.
For fun though, back in the early days of Vialogy becoming Premaitha, AR suggested £1.50 should be achievable within 18 months of the (reverse) takeover. We probably only had a quarter of the shares we have today, but we have also moved forward exponentially since then, which offsets at least some of the enlarged share base.
I have a spreadsheet that produces some eye-watering valuations just a few years forward if revenue growth continues on trend (recent 'blip' excepted) and costs stay under control. And we have cash in the bank, no debt and are very close to (or past) breakeven, so no discount for distress.
After being here so long and with so much potential not yet priced in, it would need to be several multiples of the current sp to get my vote.
Precisely ColSoul.
Cooper, why do you have to be on the offensive all the time? Relax a bit, we're all after the same thing. I presume you weren't invested on the day the litigation landed. Maybe, just maybe, those of us who held through that for two years (and have built our positions into a reasonably healthy size since that time) know a thing or two about not panicking during the ups and downs of investing. And maybe after being invested here for over 10 years and riding out every twist and turn of the exciting Vialogy / Premaitha / Yourgene story, we have earned the right to pose legitimate questions about aspects of what the company does without it constituting a treasonable offence.
Thanks Radds - I follow the logic to some extent, but it's still all predicated on trust and it only needs a few outbreaks at major events to knock people's confidence. Maybe we'll all just get used to taking that risk if actions of the honest majority manage to keep the prevalence throughout the population at a low enough level.
Interesting you mentioned Covid-busting masks Gazala - I was thinking the other day about whether you could create and affimer web that sits between two layers of fabric in a face mask to catch any virus particles on the way through. Suspect it would need to be so small that not enough air would get through, or the affimers may need to be in some kind of solution to work, but presumably the virus particles are carried in microscopic moisture droplets, so it might be possible? If not possible in masks, maybe within air filters in air-conditioners and aircraft etc?
I'm extremely positive about everything that Avacta is working on, but I do wonder how much reliance we will be able to place on home testing to allow people to go about their lives completely freely.
The thing I can't get past is the security of the results for any test taken at home. How can anyone prove that a) it was them who took the test (not a relative or friend) and b) that they took the test that day? [Does the test self-destruct or change colour again after 24 hours?]
I guess we could probably rely on it for low-density activities and events, but wouldn't it be far safer to simply accept that all event venues will need to operate some form of rapid testing at or near the point of entry? You turn up at the stadium and get funneled into a (socially distanced) testing booth where you're provided with a bar-coded (and possibly branded, so we could have an advertising revenue stream :-) LFT that you scan to the NHS Covid App on your phone before completing the test and returning it (to a person or a machine). You then head into a waiting area (still socially distancing) until you're sent the results with a time-bound entry ticket to the venue (or a self-isolation red card). If it was all done at home, would anyone really trust that everyone else going to the same venue was playing by the rules? Maybe we could rely on having big fines for people abusing the system, but that would seem pretty hard to police.
Ultimately this wouldn't change the number of tests required (it might increase it, as a lot of people might do their own test before they go), but I just can't see a secure way of relying on the results of a home test, so something like this seems the only way? Maybe every town will be set up like Liverpool, with it's own testing centre which will then issue day passes valid for 24 / 48 / 72 hours?
Genuinely interested on whether people believe there are technology solutions that can overcome this.
I don't understand why criticism of one aspect of the how the company is doing (its approach to communicating with shareholders) is perceived by some as outright condemnation of everything the company is doing. It's not - it's perfectly OK to be pro everything else about the company (and LR for that matter), but point out that it/he could do much better with communication. Nobody is perfect, but it doesn't mean that we shouldn't comment about things that could be better - that's how everybody improves, surely?
There's so much potential here - it just needs a light shining on it.
Regardless of why the extension has been made, unless there are direct procurement plans in place, we can’t supply during this first wave unless we participate in this tender. To be able to confidently tender, one would assume that we would have to have reached the TT milestone, which would mean news before this time next week, or we’re not in the first wave?