The Good, the (potentially) Bad and the (possibly) Ugly25 Jun 2024 18:54
It has to be said that this company seems to be fulfilling its raison d’etre very well to get an effective Stage 1 lung cancer test into the US market.
THE GOOD
1) Fully funded for development, which is extremely rare for a start-up Biotech and rather impressive (as far as being ‘fully’ funded is defined - see “the Ugly”).
2) MOU looks set to be turned into binding contract (hopefully with no creeping conditions)
3) BIO seems to making headway into numerous clinical centres to get the test out there.
4) One major hospital is using CIZ for an evaluation programme
5) Hopefully LFT the next stage, but I’m not hearing enough about this TBH.
THE (Potentially) BAD
1) ”This is about who’s buying the tests. Bios job is to go and get all the doctors, clinics and hospitals that NEED an early stage lung cancer test,” said Allan Syms.
“Need” is an interesting word. In the fragmented monetized US system, how difficult will it be to achieve substantial take-up at say $300/ test?
With insurance cover discretionary, present low CT-scan take-up, and without overriding Government backing, my guess is this take-up will be between 10,000 and 100,000s/ annum, but not millions. *
2) With, imo, an extremely optimistic take-up of 100,000 tests/ years, this is great for BIO (making a very handsome $27 Million) but leaving CIZ with just $3million.
You can see why BIO is very happy with this deal. And remember, the $2.3Million is an Advanced Royalty payment - meaning Ciz has to pay this out of profits.
3) One major hospital is evaluating Ciz1B. So what? Nice sounding fluff for the masses, but how much revenue for Ciz? Probably not much.
4) Looks like UK market is way down the line here (with much more funding needed)
5) Set up in many sites across the USA and each of those sites has to be accredited - has to do their own clinical trials. Potential for obvious problems/delays.
6) China obviously been binned off.
THE (Possibly) UGLY
Allan Syms: ”We don’t NECESSARILY need to go back to our shareholders for further funding. That’s not to say we wont come back to shareholders and say “look we’ve got another great opportunity for you to invest in the business.”
Hmmm, hopefully future fundraise at a much higher share price.
* Those thinking I’m negative with test take-up figures, we’ll have to come back late 2025/ 2026 and let’s see who’s correct - those predicting millions of tests being used or my less optimistic prediction. I just don’t see how this takes off - until an LFT test comes to market.
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