The latest Investing Matters Podcast episode featuring Jeremy Skillington, CEO of Poolbeg Pharma has just been released. Listen here.
Derampers are using the idea of a placing as a scare tactic because they are used to investing in rubbish that use placings to keep the lights on and pay the directors inflated salary for another 6 months.
If Cathal has to raise cash in a couple of months at 18p to help fund the covid 19 challenge study model, I'll support that.
I would agree that 130 is the minimum for a conservative calc.
Cathal has suggested that the clinic can do 48, Venn 12 and the lab possibly 5. Gives 65.
2x revenue comes to 130.
That's before the data base etc.
andinio - Bidstack was exactly what I was thinking of. Cathal wants to let contracts and revenue drive the share price.
Exactly the opposite to Draper who at the top of the share price spike last year thought they would be worth 30x before collapsing.
Cathal has been very consistant in the 2 to 3 times revenue.
The Corona challenge study model is very interesting as are Cathal's comments tonight about funding ourselves.
He said in a Proacive interview in March that it would cost a couple of million to develop. We know that recently ORPH had £4 million in cash and will be working through some multi million pound contracts while the model is developed so I don't think cash is a problem.
2 of the recent contracts are for testing with the RSV challenge study model and are both in excess of £3 million.
One could guess then that any contract to test with the Corona model would generate a similar amount.
How many of the 100+ companies developing a vaccine could the clinic service?
Could the challenge study be licenced out?
It sounds like alot of revenue.
Once the challenge study is ready is that the time to sell ORPH? There could be a bidding war.
I also invested last year largely on the basis of the genomic database. It is very under the radar at the moment.
People who are unaware of it should go back and watch the presentations and interviews Maurice Treacy did.
He expects it to generate tens of millions in revenue along with milestone payments if drugs are discovered from it and royalties if treatments are commercialised.
I'm wondering if Cathal will release an update on the database at the same time as last years results. We know last years results are terrible (Cathal has said they are) but they are also irrelevent. It wouldn't hurt to bring out good news at the same time.
I agree about selling this year.
Cathal has mentioned several times since the start of the year that a sale by Christmas is his aim and I think he will stick to that. There will come a point when he can't add any more value. Once the cost cutting is done, the lab and clinic are full for the year and other contracts are signed on 3 to 5 year basis it will be time to move on.
I don't think he has any interest being a normal CEO running a company on a day to day basis.
The key will be how he can grow the revenue.
Probably his most interesting interview this week.
He is talking of 2-3 times from the current price which is already higher than last year when he set out his ambitions.
He has always said that similar pharma service companies are valued at 2 - 3 times revenue if profitable.
Since the acquisition of Hvivo the revenue target has probably increased.
To be fair to Dan, in the last Podcast he said they had written and verbal assurances of the payment, and that was confirmed today.
As for why to stay invested.
The tech works.
In NXP2 they have a drug that works in an area of unmet need.
They are funded and have very low cash burn. The Ebers deal covers their running costs.
They may need someone a bit sharper in thrashing out deals though.
I expect Dan will do an interview Thursday or Friday. It's best to clarify these things or else the internet starts making up it's own version of events.
It does sound like a falling on sword moment.
Maybe also a clearing of the decks before NXP002 news lands.
The NXP1 payment has been frustraiting but it's also become less important to the companies future. NXP1 payment was supposed to help fund NXP2 development but due to the delays they had to replace it with the placing.
Once NXP2 news arrives, the Chinese become irrelevant.
One thing's for sure. The Chinese wont be getting anywhere near NXP2,NXP3 or NXP4.
The genomic database was the reason I originally bought in last year. That has the potential to be worth more than the current market cap on it's own.
I wasn't too interested in Cathals plans for aquisitions as I thought he was talking about buying a tiny pharma company with niche capabilities. I never expected him to get something the size of HVivo.
I've since bought a lot more.
In the last podcast Cathal also mentioned Professor John Oxford who is the original founder of Hvivo and a leading Virologist and expert on the Coronovirus. He's been on the BBC discussing the virus and Cathal says he will be unleashed next week to talk about Open Orphan.
If we read it like that though, this isn't actually new money but money JD was expecting for this year.
Agree that JD has been a bit naive this year. It was a huge gamble to say he was happy with revenue targets when at that point he knew they hadn't yet earned any significant revenue and were dependant on a single deal pushing them over the line.
At the bottom of the RNS there is a line
"On one hand, we are disappointed that none of this revenue will now be recognisable in 2019, but, on the other, this sets the company up well for 2020 and beyond. "
Does that suggest this contract was supposed to come earlier and contribute to this years revenue?
Maybe that's why JD was so confident on hitting the revenue target this year but the contract got delayed to 2020.
winnieh why would you think we would be on human trials for nxp002 buy now?
Dan stated in a Proactive interview in March this year that Human trials were about 12 months away so March 2020.
The plan for this year was to choose and develop the delivery method which they have done.
I would expect a deal on NXP002 to be completed early next year ahead of the trials as Dan has said it would likely include milestone payments which presumably would be related to the trials.
Does anyone know the status of NXP001 in China? I'm not refering to the missing milestone payments but when the the drug actually goes into production and starts generating revenue. Is that also delayed until the payments are sorted or is it already on sale?
Thanks.