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@RAH00084 yes exactly word for word what Al said, was in the Qs towards the end (last 5 or so mins) where 1 investor kept pushing him.
And yes what Lovebug1 said is word for word also, have noted exactly the same.
@beinthelead, was at the AGM along with Myles and other members. Alastair clearly said it would be a big mistake to license out Ava6000 and they have to keep hold of it.
"once we have data later in the year, license other things in the pipeline for the Precision technology, similar way to what we did with Point. It would be a strategic mistake to to license your lead asset."
Then stated it two more times, "it would be a strategic mistake to license your lead clinical asset, if you want to drive specialist investor interest in a clinical stage biotech, you dont license your lead clinical asset. You keep it in house and develop a pipeline behind it and license some of those"
Post was cut off:
...market is significant.
What I would say is that the company seems to be in the best place its ever been in, one of the very few AIM companies that will never fundraise again who are the world leaders in a growing sector and as Mo put it is inflation and recession proof.
We have a very strong cash balance, order book is booked out for the next year, demand is increasing all the time, cost per study is increasing, world leader in the field with nobody else coming close. Nobody else can replicate this easily, comes down to experience and years of safety data.
Mo is very much underpromise and overdeliver. Upside from here is colossal. Malaria contracts wont be far away, other models being developed similar that dont require bed space, margins will be massive.
Lets see how this plays out, but I will say the future is very bright, absolute full confidence in Mo and the team. I was very impressed.
I attended the AGM last Tuesday and had the opportunity to ask some questions. Was only 5-6 investors who attended. Here is some of what was said (all extremely positive).
Malaria challenge study is done. First contract to get over the line is always the hardest, but they have quite a few that are interested in doing that study, dont believe it will be too long before first contract signed. Opens up the door to similar diseases too and by end of year should have more online.
Royal free still available for covid, but always other options available for cheaper and at short notice.
No capacity issues at all. Be a nice problem to have when they need more than 1k screenings a week.
Spin offs once again said about market being closed to do them, hopefully opens up Oct/Nov time, prepared for it when market is better.
The P2 work isnt done in the quarantine facility. Its done at the screening facility. Its an add on to what they already have. Margin should be "much greater" using same facilities and resources.
Want to monetise the 80% of volunteers they cant use for P2 field based trial. 1 study going through ethics atm, and goal is to build on this as an addition. Unlimited capacity, they have 1k screenings a week, can do as many P2 studies, the restrictions is how fast can we recruit the volunteers. Love to have the problem of where screening volunteers becomes the problem of P2. Very impressed the team has done this so quickly given no history of doing it before. It wasnt client led, they actively went to the market and pushed this new avenue.
Once get on their list, you get asked to do trials on an ongoing basis, vaccine trials initial focus, but down the road, more on mild chronic diseases.
Have a facilities group that are dedicated to find the "next whitechapel hotel" within the QMB area. A lot of empty space so we can pick and choose.
Importantly with Liberum coming on, Orph and them want to be seen as a professional company. Committed with them to bring forward the financials, Sept interims where will show the market the cash balance etc
Could have done DIM very easily this year, but very hard to do anything right now, the markets are closed, will be ready for when public markets are better (kept saying about Oct/Nov was the aim)
Wont be taxes paid for some time, 120m invested into Hvivo etc
Omicron, takes time to go through each step, is complicated with finding dosage, ethics approval etc. The reward is huge. 5-6 clients very interested on coming on board, Vaxart will be the first one to do it. Vaxart pay for half of development, but Mo is asking other clients to pay as well, so 1 more client comes on board then you have the full cost paid for.
Lab services - done 3 weeks ago, will have certification by end of Aug. Offering it in addition to the challenge studies doing in house, amazing capabilities to offer every other CRO & client that dont have their own lab. Only 2-3 virology labs in Europe, so the mark
- Forecasts and valuation are left unchanged, which include revenues from traditional challenge studies of £41.4m and £7.7m from Venn/lab services. Stripping out the value of its non-core assets (c.£60m or 9p) and projected end FY 2022 cash (c.£17m or 2.5p), the current price implies that the core business is currently valued at c.0.1x and 1.0x 2022 EV/Sales and EV/EBITDA, respectively (assuming nil value to non-core assets still implies an unrealistically low 1.4x and 9.5x EV/Sales and EV/EBITDA). Given the operational leverage that the business should enjoy as further contracts are added to a relatively fixed cost base, we reiterate our44p target price.
£7.2m RSV human challenge contract Following closely on the heels of a landmark £14.7m contract win (announced 1 June 2022), Open Orphan’s subsidiary, hVIVO, has signed a £7.2m contract with an existing top five global pharmaceutical client to test its orally administered antiviral product in a Phase IIa study, using hVIVO’s respiratory syncytial virus (RSV) Human Challenge Study Model. Not only is this study building revenue visibility into FY 2023, but it illustrates the interest and recognition from big pharma of the relevance and value of challenge studies in their drug development programmes – in this case, quickly testing an existing drug, which has already shown efficacy in other disease indications, in RSV, to determine if it should be tested in large Phase IIb/III studies. We are leaving FY 2022 forecasts unchanged, given the majority of revenues from this contract are expected to be recognised in 2023; however, we believe that contracts signed to date underpin FY 2022 revenues, subject to client scheduling, and that revenue visibility into 2023 visibility continues to build. We reiterate our target price of 44p.
- Newsflow. hVIVO has signed a £7.2m contract for an RSV human challenge study with an existing top five global pharmaceutical client, to test its orally administered antiviral product. The study is expected to commence in Q4 2022, with revenues to be recognised in 2022 and 2023.
- Relevance of challenge study. This drug has already been shown to be an effective antiviral in certain diseases, having been approved for one indication, and presently in Phase III clinical trials for another infectious disease indication. The client will use the human challenge study to assess the efficacy of its antiviral against RSV quickly and efficiently to determine whether the candidate should be progressed and tested in a wider Phase IIb study. It is increasingly recognised by pharma/biotech that challenge studies can de-risk a product’s development plan, providing substantial time and financial savings compared to traditional field-based studies.
- Implications. This contract represents the sixth contract (and fourth challenge study) announced by hVIVO in 2022, with a total disclosed value of c.£35.2m and the 14th major contract in the past 18 months (c.£89m). The record order backlog as at 1 June 2022 has now extended to c.£71.4m. We estimate that the company already has visibility over c.£25m of challenge study revenues (which account for c.85% of group revenues in FY 2022) in 2023.
£7.3m influenza human challenge study contract win Open Orphan’s subsidiary, hVIVO, has signed a large £7.3m influenza human challenge study contract with an undisclosed, albeit leading biotechnology company, to test its novel antiviral candidate. The study is scheduled to commence in 2023, with revenues to be recognised in 2023 and 2024. This is the 4th contract signed by hVIVO this year and 12th in the past 18 months (c.£68m contract value), illustrating the strong momentum in the business. This represents the 6th contract win over this period that will use hVIVO’s influenza challenge study model and reflects the shift in market sentiment following recent scrutiny of infectious disease data that has outlined the significant threat of flu and the potential of human challenge studies to the advancement of drug development candidates. We make no change to forecasts, given the timing of revenue recognition for these contracted revenues; however, visibility into 2023 is building nicely. We reiterate our target price of 44p. - Newsflow. hVIVO has signed a £7.3m influenza human challenge study contract with a leading biotechnology company, to test its treatment using the hVIVO Influenza Human Challenge Study Model. The study is scheduled to commence in 2023, with revenues to be recognised in 2023 and 2024. The challenge study is designed to provide early proof of concept for the antiviral product, in order to accelerate its development into a Phase II programme. - Additional services provided. hVIVO’s virology laboratories will determine the viral load of the influenza challenge agent used to inoculate volunteers, as well as provide serology services and virology services (viral infectivity assay) for the study. - Contract momentum building. This contract is the fourth contract (and second challenge study) announced by hVIVO in 2022, with a total value of c.£12.5m, and the 12th major contract in the past 18 months (c.£68m). - Forecasts. We leave our forecasts unchanged, given that these revenues should benefit 2023 and 2024. We expect to re-visit our forecasts at the time of its preliminary results, which should confirm the timing and, therefore, recognition of revenues for the challenge studies that have been contracted since March 2021 – with revenues from announced contracts underpinning our FY 2022 revenue forecast of c.£49m. - Valuation. Stripping out the value of its non-core assets (c.£60m or 9p) and projected end FY 2022 cash (c.£17m or 2.5p) the current price implies that the core business is currently valued at c.0.3x and 2.2x 2022 EV/Sales and EV/EBITDA, respectively. Given the positive momentum in the business, we consider this inappropriate and reiterate our 44p target price.
Don't really get the obsession with the board having to buy shares. Vast majority of any C board never buy any shares in the companies they run, yet do a fantastic job. I think we've been spoiled by Cathal and now PIs are expecting anyone related to Orph to have skin in the game like Cathal has. Jeremy is getting hounded with POLB and now Mo. The only benefit IMO is that they are seen to be more aligned with shareholders therefore less likely to do things like fundraises at discounts, which we know Orph won't be doing.
The question will go from, why hasnt he bought any, to why has he only bought this amount etc etc.
Its very good news, because they've given a funding grant to ConservBioscience (Imutex) for "a pan-coronavirus vaccine"
Looks like around the bottom IMO, unless wider market tanks further and drags us down with it. The RSP looks very good, and something I've never seen with 2 MM's wanting 500k+ of stock (before reloads)
Attached pics here for reference:
https://twitter.com/downunderfutbol/status/1493243038243889153
"I now realise that patience is the number one prerequisite for successful investing - buying into a growing business & staying with it. And better still, adding more if my belief in the business holds firm."
This is from John Lee, one of the UK’s most successful private investors. Beginning with an investment pot of £125,000 in the early 1980s, by 2003 he had turned this into a thriving portfolio of over £1 million, and it has significantly increased in value since then. Using efficient investment methods, as well as pursuing a winning ‘buy and hold’ strategy, he was the UK’s first ISA millionaire.
https://www.ft.com/content/98b5ec38-90b8-4b97-8384-27da2404dea0?segmentId=6faa8072-922c-4fbf-5b33-45a1342b0cc3
Now ask yourself why did you invest in Orph, what has changed since then? Obviously the share price, but has the fundamentals changed to justify selling? IMO the fundamentals are considerably better at 16p than they were back at 6p by a distance. The share price doesn't reflect the company, so sometimes its best just to let the company get on with what they do best and in the end true value will be realised. The entire market is taking a daily battering with fears of Russia/Ukraine escalating, inflation, Evergrande etc. However this is the time to buy, I have never seen such a bargain in terms of risk:reward on AIM. Markets hate uncertainty and have sold off prior to any potential war. Markets historically have rallied during war times.
Worth reading the latest SAGE notes, they assume it will take considerable time before a stable state is reached (2 to 10 years), of which vaccines are needed to be regularly updated. So its just a matter of when do we get the final green light for covid studies. Worth listening to previous interviews where its been confirmed that they won't RNS any contracts until MHRA have given approval. Which IMO will happen towards the end of the month.
Finncap :
- Forecasts and valuation. We leave our forecasts unchanged and reiterate our 44p target price.
Stripping out the value of its non-core assets (c.£60m or 9p) and projected end FY 2022 cash
(c.£17m or 2.5p), the current price implies that the core business is currently valued at c.0.9x
2022 EV/Sales. Which compares with a median EV/Sales of 4.6x for its peer group.
Thanks for that Moni, just listening now. Peter Openshaw and Wendy Barclay both speaking who were involved in the covid human challenge trial. So should be an interesting listen!
Strongly recommend reading this thread. Marik found it and RAH has summarised the findings well. Potentially massive positive implications when we see the data, enjoy the weekend everyone!
https://twitter.com/TheEthicalTout/status/1489631807486279682
Easy solution, just listen and don't watch. Majority of CEOs won't even do interviews, and if they do its often just voice ;) It feels that anything Cathal does now, hes constantly picked up on for the smallest of things, give the man a break and see what happens in the next month.
Thought it was a good interview and can tell its clearly a change in tactic being case of under promise and over deliver
Yes Sho2SHB.
As from his recent interview the goal is to create a lean, clean CRO machine with no baggage.
Its literally a case of developing as many challenge studies as possible, getting the final green light for covid studies, then IPOing DIM which needs to be marketed with Covid data to get the best value, then wrapping it up in a bow to hand over to another player, whether thats a merger or sale is another question.
Never seen a bargain like it on AIM, its so clear what the end goal is, room for some serious upside even with non covid work. The covid is the icing on the cake. Downside, well, I can't honestly see any?
Initially it was advertised as a "post trading update roadshow" between 1-3 Feb. Then its been changed by CAG to "introductory roadshow" between 2-4 Feb
NDN back under KneelT username then. New account, loads of posts. Subtle digs at avacta and loves SNG.
Know his game.
Runner-Runner, good post.
Agree its a very interesting situation with how to get instos on board without making them buy in a volatile market if Avacta were to release ava6k news. On the flip side, how do they discuss the progress to date given right now we should we well into cohort 2, and even starting cohort 3 soon if we are to finish the dose escalation by Q2 as per the FDA IND approval RNS on 29th Nov, without giving away inside info which hasnt been disclosed to the market?
Given its impossible to finish the dose escalation on time if they havent already gone through 2-3 already, I am of the view that theres been no safety issues, particularly with the selection of ava3996. So the data is good, but just how good is it? It creates an urgent need for a sticky share register as right now theres too many flaky PIs. If someone came in with a bid of £1.5b which is £6, I fear many PIs would accept as they dont fully appreciate the market that good data unlocks. Its many many multiples of that and maybe why Alastair previously said:
"Avacta is in a position to help shape the future of medicine through powerful new anti-cancer treatments and diagnostics. With appropriate scale-up capital, Avacta will become a multi-billion-dollar life sciences company competing globally with the likes of Roche-Genentech, Thermo-Fisher and Abbott."
They are worth 200-300 billion. Now read that again and ask yourself if Avacta can disrupt the whole industry, what price would you accept?
The only way I see it is if no RNS, then those instos would have to be brought on the inside if sensitive info was to be given.
I believe the best situation for all involved would be to release data, then alongside that do a private premium fundraise at say 200p with those institutions who appreciate the value of the platform. Just look at other companies who have done a premium fundraise. I am in All Active Asset which suspended at 53p ish and has done a premium raise at 80p etc with someone who will stick around for the journey.
@Jive_turkey thanks for the good post. Also worth listening again to the last presentation which backs up your comment about the dose escalation, where Al said the following:
"When will we provide the market with an update?
We've said consistently end of year / into Q1. We will have gone through MULTIPLE dose escalation cycles"
So by now, we should expect multiple dose escalation cycles to have happened which would make complete sense given first dosing was mid August.
Have uploaded the clip here for those wanting to listen:
https://twitter.com/downunderfutbol/status/1487119326578630656
For those who havent seen the picture of the impact of ava6000 against the tumour, take a look, truly remarkable.
https://pbs.twimg.com/media/FIwEAPmXIAESnZ2.jpg
Warning - I wouldnt look if about to eat!