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Sorry - see 16.1.

Https://media.frc.org.uk/documents/Revised_Going_Concern_Updated_May_2022.pdf

See Section 15.1. This is our saviour, they HAVE to do something to shore up the balance sheet if they are persisting with the P2 trials strategy, and that "something" should make the SP rise dramatically, fingers crossed!

AIMHO.

Thanks MrC.

The endless posts on here about the science, which are welcome reminders and do re-emphasise the huge value of the asset that Synairgen are sitting on, also highlight Marsden's absolute non-performance on the corporate and the commercial fronts. It really is immoral to be taking that level of salary whilst delivering nothing of value to shareholders.

I'm hopeful that the impending audit opinion requirement will mean that something on the corporate/commercial front has just got to happen soon, regardless of the inert CEO.

Am assuming you heard nothing back from your enquiry a fortnight ago?

Am assuming you didn't hear anything back from Marsden after your enquiry through his receptionist/PA the other week?

TIA.

Doc83 - worth remembering that there will be a budget-holder for UNIVERSAL in J&J who needs it to succeed here for their career aspirations. Equally, much as Synairgen may be dependent on Casanovalabs, the latter doesn't make any money unless Synairgen succeeds. So all very "symbiotic"...

Even if the whole J&J thing collapsed, it isn't actually fatal - Synairgen has three years' worth of BAU spend in the bank. It may just mean that the BoD would move into asset auction mode, but you're not talking about a distressed sale, they would have time.

This is probably why TFG haven't intervened; there are still options for value-creation.

AIMHO.

This was J&J’s earnings call on 23rd Jan:

https://event.webcasts.com/viewer/event.jsp?ei=1643597&tp_key=c0c8acc721

They were questioned (1hr, 2 mins, 30 secs in) by one analyst about their M&A activity in pharma being low relative to medtech. Their response is interesting – they explain that they did over 50 deals last year licensing/investing in early stage pharmas, where they bring commercial/distribution/infrastructure/regulatory capability. They say that these deals don’t produce headlines because they are not full-blooded large M&A transactions, and they also make reference to revenue streams expected “some time this decade” in relation to one particular investment.

All this narrative would support a scenario of UNIVERSAL leading to a JV with Synairgen and Casanovalabs. Add into the mix Synairgen’s CCO not being replaced, then that seems to be a signal that J&J will take over the commercial activities.

The clock is ticking here; to maintain a negotiating position Synairgen have had to articulate a “go it alone” strategy, but that’s a difficult one to get past the auditors looking to sign off the 2023 accounts currently. Synairgen raised £14m in 2020 for the last P2 trial (extended into “at home” intervention) and although the latest P2s that are envisaged may be on a much smaller scale, there is still a sense of this being tight. Auditors wanting to see Going Concern capability to at least April 2025 will not like “tight.”

If you plot the critical path back from the AGM (assuming last minute 28th June) through signed-off Annual Report to BDO’s current machinations, then I anticipate an announcement any time before end-April.

AIMHO DYOR

"All of this might be solved by a JV and who knows Mr Hennings may have been working on one. One thing is for sure we don’t need a commercial director because if the drug succeeds BP will be marketing it" (Tommy)

That is the interesting takeaway from this - Synairgen have obviously made a decision that they can now go forward from here without the need for a CCO, and they must be completely comfortable to dispense with his services as Marsden has never skimped on having resources to support him, so it does points to some kind of watershed moment. Fingers crossed.

This is about cash flow Mani, you're looking at P&L.

Tommy - the current burn rate (all before Mankowski, the lab person and the new FC joined the payroll) was circa £300k per month, just to keep the lights on. From the c.£15m at end-June 2023, to get through to April 2025 you're left with just over £8m to put aside for trials in the meantime.

Do you think £8m will be enough for a portfolio of P2s? I know they have the stock, and existing staff would also defray some of the usual incremental costs, but it would seem tight to me. Possible perhaps, but not easy.

Not sure what this means.

Interestingly, In the month that he left Verona, they announced a $200m raise. Don't know how involved he was and whether he always rides off into the sunset just as "my work is done" - we can but dream.

You were our Chief Commercial Officer

You came in three years ago to do deals

Keith’s mum watches “Deal or No Deal” on the telly

You did No Deal

EJ Thribb (-97%)

Fruits' deduction makes logical sense. After all, why else have J&J been funding UNIVERSAL for the past 18 months?

It also explains the delay if there is a muti-party transaction in the works, but there has to be an outcome before the auditors will sign off the 2023 accounts, and timing wise... well, that was end-April last year.

Mr Costs - you're right, but only partially I think, because the auditors would also want the company to publicly announce that the trials weren't now going ahead (to correct the current "on the record" Business Plan). It's interesting where that would then lead, because the BoD would be forced to come up with some kind of alternative way forward or go for immediate liquidation to maximise the return to shareholders. But all theoretical, surely.

Mani - that scenario of failing the P2 s then entering administration cannot play out because that's exactly what the auditors will currently be discussing with Synairgen to avoid a Going Concern qualification in the 2023 accounts. Synairgen have to have sufficient funding in place shortly to avoid the qualification now. That's why I'm anticipating an imminent RNS on some kind of transaction to shore up the balance sheet.

Mani - the patents and data have value in BP's hands. TFG will see that as their exit.

The shares are a steal at this price. and forget the management's shortcomings, TFG will ensure that there is a positive outcome. The only question marks are around the scale of the return and length of time to realise it.

“TFG have hedged their way into a nice comfortable positions here” – more fantasy from Fruits rather like his/her/their spinning of the story of the CMO Mankowski joining.

TFG scrambled to get past 25% and establish the negative control position, that’s all, and at the same time they have seen a £60m investment dwindle to £3m. Comfortable is not a word they will be using.

The only reason TFG haven’t acted, and this is where I fundamentally disagree with Professional, is that the science is deemed to be proven (targeting is the only issue) and so there remains an option of a BP FOMO sale for several hundred million, and that is TFG’s back-stop. The reason the value of that option isn’t baked into the SP now is because it is a non-option under Marsden and Shaw’s stewardship. It will never be on their agenda, since the level of return that they aspire to only happens if Synairgen remains independent and passes a P3.

TFG will be patient for as long as they see there’s any chance of the greater prize that Shaw and Marsden are chasing. Personally, I think it’s a long shot; there’s a significant commercial problem with a third party holding the whip-hand on patient identification, and then a very real question mark over Synairgen’s internal trials capability - which will undoubtedly have been bolstered by Mankowski, but who of the rest of the top team have extensive trial credentials?

Of course, TFG will still see incremental value in regulator-approved P2s ready to go, and that may be another reason for them to remain patient temporarily.

Whatever happens here, if you’re prepared to wait then I think you will see an SP of £1+. A few things do need to happen though, either the trials to get going (and we still don’t have confirmation of a start) or a “clean” BP auction. But for the latter, Marsden would need to be gone - if his attitude to BP is anything like it is with shareholders, then they won’t want to work with him.

In the near-term, Synairgen may not be out of the woods on the Going Concern accounting question, but we will know soon, and if it is a problem then that could be the catalyst to a forced transaction (forced as far as the BoD might view it, as it may involve sacrifice of their objectives), but which should lift the SP markedly.

Hang in here, I think, and we will see a significant improvement for LTHs, sooner or later, and possibly very soon. Fingers crossed.

GLALTHs. AIMHO.

Tommy, I'm off now for a few days, and suggest you try to get some time off yourself - perhaps send this to Richard:

https://www.acas.org.uk/working-time-rules/the-48-hour-weekly-maximum#:~:text=An%20employee%20can%20choose%20to,the%2048%2Dhour%20weekly%20limit.

TTFN!

"The P2 cost you quote are obviously not the ones the company are working on"

Er, Tommy, official figures my friend.

Maybe Synairgen can get it done cheaper than the average, but at best, the cost will still run to millions and get very close to draining the kitty...

...ergo, Going Concern qualification without a funding commitment.

Hey, here's a suggestion, maybe the company could tell us!