Member Info for Steelwatch200

Franksel..using the template from your comprehensive 1/9/21 post for ease ..here is my take on where things may end up..- have you (or anyone) any revised thoughts / projections?

Not advice to buy.

FY 21/22.
Revenue: £130m (flat out 24/7production at all sites, limited covid disruption, new contracts incl.. framework agreement progressing into production from tooling, positive trading updates, selling price rises, aerospace division improving)

PBT: £10.4 (8%)

£10.4 x 15 PE (slightly cautious) £156m
£156m minus say £37m for pension and say £30million debt = £89m
73.3m shares that gives a target of £1.21p per share.

Lots of guess work - just a crude stab.

GLA

Hi Chrisjse,
I agree that they appear not to be high tech, but I understand that they have an important part to play in regulating the flow through the test strip. So precission presure on the strip is needed.
They have stated in their annual report (extract below) that they are making diagnostic covid related products. So if not LFT then i am not sure what. Maybe in the next update more will be revealed.
As an aside Abbot have recently anounced good profits & growth. One of their products appears to incorporate the Carclo device for diabieties blood collection (high growth area), that Carclo championed as an example of their development expertise on their web site

https://www.globalpointofcare.abbott/en/product-details/afinion2-analyzer.html

From the Chairmans statement.
"As a result of CTP’s reputation for
delivery and quality, the division secured
three new large medical customers.
Two of these customers operate in
the diagnostic field and the other in
pharmaceuticals. Demand for new
COVID products was high and is
expected to remain so for some time,
whilst demand for some non-COVID
medical products reduced as a result
of treatments being delayed.
As a result of these new business wins,
demand for new tooling increased over
the prior year and is an encouraging
leading indicator of future growth.
Investment in new technology moulding
machines also continued at a high level
as the division gears up for increased
demand for medical and diagnostic
products (both COVID and non-COVID
related).
As well as securing new customers, the
division also saw increased demand from
existing customers in the medical sector."

https://www.globenewswire.com/news-release/2021/08/19/2283599/0/en/Lateral-Flow-Assays-Market-Size-is-Expected-to-Reach-13-35-Billion-by-2030-Says-AMR.html

It also links well with this statement they Made it the trading update 2/9/21

"Alongside the positive trading performance, the division continues to make good commercial progress with order intake in the medical and diagnostic sector remaining strong and showing some good potential.

The new customer programmes announced in December 2020 are moving into production on time and to budget, with these providing significant growth potential from the latter part of FY22."

From various news feeds there seems to be a noticable global swing away from PCR tests towards lateral flow tests, for Covid19 testing.
Would it be too much of an assumption that Carclo's diagnostic 10year contract is for the provision of the multiple high tollerance components needed, for these lateral flow tests (+ the other covid related orders they have confirmed).
The CEO of Avacta (in partnership with GAD Mologic) , mentioned in a recent results presentation that the casing of lateral flows are an intergral part of how the test strip performs, and that they have worked hard with their casing supplier to perfect the product.
This precission manufacturing is right in Carclo's field of expertise and with having factories in the USA, Europe, India, China, & Uk, they are perfectly placed to supply masive domestic & export demand generated in those countries.
Great oppertunity for the Company to make some serious profit, over and above their "day to day" contracts.
24/7 Working at the moment.
Looking forward to the results & trading update in November (not long to wait)
GLA

Thanks for your thoughts gmcc.
Your right note 4 gives a good break down. Hopefully Avacta will continue giving the same splits between diagnostics, therapeutics and animal health, license deals and services. Should be a good read next April.
Thanks again

Trying also to get a handle on this milestone payment.
It looks like the potential value Avacta are suggesting for the LG agreement is 400m + % of takings. This moved up from 310m prior to the August 2020 expansion.
If there are currently 6 targets of interest (assumption) it would equate to approx 60-70m milestone payments before sales %, per target.
If this was a significant Milestone which it was, hence the RNS, you would have thought 5-10% of total would not be unrealistic. This would suggest a payment of the magnitude of 3 - 6 million.
Thoughts anyone?

The presentation summary worth another read, I like the last item when combined with the lg RNS of this week.

Diagnostics
• There will be an ongoing global need for sensitive and reliable COVID-19 testing for many years.
• AffiDX SARS-CoV-2 antigen flow test with market leading performance CE marked for professional use.
• UK manufacturing capacity 2-3 million per month scalable in UK and abroad.
• Commercial traction building through direct sales and distributors in UK, EU and overseas in key markets such
as APAC region.
• Therapeutics
• AVA6000 pro-doxorubicin: FPI August 2021 in Phase I first-in-human, open-label, dose-escalation and
expansion study in patients with locally advanced or metastatic selected solid tumours.
• Aiming for IND filing before the end of 2021 for Phase I study for AVA6000 in US.
• Pre-clinical development milestone achieved in LG Chem programme triggering an undisclosed milestone
payment.
• AffyXell Series A funding of $7.3m and good progress with in-vitro and in-vivo studies of lead Affimer
molecules and engineered MSCs.
• Multiple development candidate selection milestones across all programmes during next 12 months.

I have spent some time today researching the numerous actual & potential revenue streams for Avacta, with the aim of understanding the risk reward for this share.
Myles McNulty's published investments notes have been a great starting framework for this research. I would like to thank him for sharing his work and his opinions, it is so easy for others to snipe at other people's from the sidelines, without putting your own research and detailed reasoned assesments forward.
DYOR
Good luck all.

Plus when the extension/broadening is added, the milestones get very large indeed - transformational :

18 August 2020
Avacta and LG Chem Life Sciences Expand Partnership

Additional drug development programmes utilising Avacta's Affimer® XT technology

Avacta Group plc (AIM: AVCT), the developer of Affimer® biotherapeutics and reagents, is pleased to announce the expansion of its existing multi-target collaboration and development agreement with LG Chem Life Sciences (LG Chem), the life sciences division of the South Korean LG Group, to include new programmes incorporating Avacta's Affimer XTTM serum half-life extension system.

In December 2018, Avacta and LG Chem entered into a multi-target therapeutics development agreement to develop Affimer® therapeutics in several disease areas potentially worth over $300m to Avacta. The companies have today agreed to expand this drug development partnership to include Avacta's Affimer XTTM technology, which can be used to control the time a drug spends in the circulation.

The expansion of the partnership includes an undisclosed additional upfront payment, plus near-term pre-clinical milestones and longer-term clinical development milestones totaling $98.5m for two therapeutics to be developed using the Affimer XT technology. Under the terms of the extended agreement, LG Chem has the exclusive rights to develop and commercialise, on a world-wide basis, Avacta's Affimer PD-L1 inhibitor with Affimer XT serum half-life extension.

The expanded partnership also provides LG Chem with rights to develop and commercialise other Affimer and non-Affimer biotherapeutics combined with Affimer XT half-life extension for a range of indications and Avacta could earn up to $55m in milestone payments for each of these new products.

In addition, under the agreement Avacta will earn royalties on all future Affimer XT product sales by LG Chem.

Plus Deepverge!!

Plus animal diagnostics division also!!!

Thinking back to Last year's RNS pre interim results regarding Deepverge, this was forced on them by the issue of an 7.00am RNS by Deepverge, From memory it was a 11.00 am issue. Also, by the tone of Avacta's response they were not pre informed of Deepverges RNS.

This morning's RNS however, has not been forced on Avacta, they must feel that it is a seriously major event, the seriousness can be understood by the examples below of reasons to issue an RNS so close to the interims.

Close period RNS examples:

For instance, the company might wait until the financial results are published before revealing the test results for a new product or plans for a new initiative to expand operations. There can be cases wherein a company must report news or statements during the close period even if it might influence share prices. Accidents and calamities that affect the company’s operations may need to be publicly acknowledged. A disaster at a company’s major production facility could not be ignored regardless of a close period. The sudden or unexpected departure of members of executive management likewise can call for public statements by the company that cannot wait.

I read this morning's RNS as a major positive event for the company.

Is B Johnson going to bring it back with him? Or just the Brazilian version?
What a waste of space, you couldn't make it up.
Sorry for being off topic

Great positive news, as somebody has said this is a win win for Avacta. Thanks for posting
GLA

Could be zoom.
It just looks strange as they refer to Avacta's "test" in the section above this new announcement, could be a slip of the pen or an indication of something more?

Does anyone have any idea why Medisa19 used "test" (singular) for their own test, yet "tests" in reference to Avacta?
Are some of the established Avacta tests available for Medisa19 to distribute? (Bams etc.)

Just seen this job advertised 1 week ago.
New production cell, 12 hr shifts ,they seem to be in a rush!!
That makes USA, India & UK divisions all expanding. China & Czech facilities no info.
Looking forward to the next update, should be a positive read.

GLA

”Manufacturing Quality Engineer
Carclo Technical Plastics
London, England, United KingdomPosted 7 days ago

Easy apply
Job description
The Quality Engineering team at Carclo Technical Plastics, based in South London (Mitcham), is quickly growing due to a new production cell that has been just validated according to ISO13485......."

There seems to be a continual stream of new jobs being offered at CTP USA production facilities (this week mainly Derry, NH).
First,second and 3rd shifts,productive positions.
Hopefully there will be a trading update in the next few weeks.
Could help to explain the recent share movements, and the reasons behind director purchases at 52p.
GLA.

Moderna back in 2015 when an agreement was struck with Avacta for the use of certain Affimers was not much bigger than Avacta is now.
In Feb 2019 when Moderna took the agreement exclusive, they had a market cap of approx 700m.
Today their mcap is around the 140bln, with a jaw dropping inflow of cash, for at least the next 2 years.
At some point in the near future, we should get an update regarding the progress of their therapeutic target and or progressive milestone payments...or even a request for further Affimers for different targets or more, they are going to be super bullish.
Can't wait to see how it develops.