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I assume you are joking by asking how is it dilutive ? ...Just in case you are not here goes the value of the IP is whatever it is ..... if you issue more shares and do not participate in taking up more shares your share of the IP falls .... you have a smaller share of the future revenue that IP may produce .... in other words you have been diluted.

That does not mean you cannot make a profit it just means you will make less profit than you would have been able if a different source of capital was founded, assuming you did not commit more capital.

To your point a company needs to raise cash when it needs to raise cash and not when the IP is being properly valued. Currently the shareprice does not reflect the IP in anyway shape or form (even if it subsequently is determined not to be effective) and yet we have a requirement for capital in the near future regardless of that fact.... that means the dilution is that much higher than a raise that takes place at say 20p or 30p.

So it gets down to the question of why does the market not value the IP. If we conclude that the science is sound or at worst sound enough to progress further, which I have not hear anyone dispute then why are we 5.5p today ? My view is because the market feels it is not able to trust management to do what is necessary to progress the sciences towards a commercial end. Ask yourself this if the company had different commercial management do you think the share price today would be where it is.... I can think of lots of better people than CH of RG to run a company with the calibre of science SCLP .... I am pretty sure you can too.

Ray,

85% comes from an historical viewpoint. Most unprofitable companies on LSE fund themselves via dilutive capital raises.

Specific to SCLP - 4 out of 5 of commercial cash infusions in to SCLP since listing have come from dilutive capital raising. I go a bit higher than 80% average for two reasons ... 1) we are fast approaching the cash equivalent of the event horizon and 2) in my mind the patent grant would be an obvious trigger for a deal ... if there is a deal out there it must require other condition precedents that are likely out of their control from timing.

I think the use of probability here is the key to maximise profit and minimising the risk ..... I am invested already if you are right I will make money when a deal is announced .... if I am right I will lower my entry price and make money in the longer term. If you rule out the probability of a capital raise it would make sense to be fully invested at this level .... the outcome then is a pushes your return profile to the edges of the bell curve.

So come on Ray, there is my logic .... lets hear yours as to why there is no probability of a capital raise.

On the issue of the new hires .... in truth, given they probably started looking to bring on both new hires in 3Q last year for a January start, they probably did not anticipate the share price at 6p and no trials underway then.

That aside ... i don't think there will be any issue with them being able to raise money it is just at what cost it comes to existing shareholders. Also with respect to when a raise (if at all) may come I think it would be irresponsible of management to take it in to the summer. The market is effectively closed during July and August and I suspect by September/October they are on fumes, unless the SCIB1 trials are not underway by then.

A raise should only be a real concern if you can't or won't top up to offset the dilution .... and other then physiologically the price is almost irrelevant to existing shareholders who are prepared to top up. If I have to go out on a limb I think we get an announcement confirming the SCIB1 trial is underway and a week to 10 days later an raise but obviously there are many other possible ways it could come about.

Interesting few weeks coming up .... Chondromimetic aside we should be getting a top line read out post the FY end. I am really interested to get some insight in to where the underlying business currently stands versus some of the predictions made. Particularly that by end of FY19 we should be cash flow break even on a run-rate basis .... if they have hit this mark (in truth if they are even close) and it is sustainable this is huge for the company in the longer term.

In addition during April it is likely we will get news on Chondromimetic and some of the animal data on the other proprietary products. Fingers crossed on all of the above.

Papillon, with patience I think we will all be good here. Nothing wrong with trimming and adding at times that suit you best. For me I am a very happy buyer below 25p. I suspect we need two decent size contract wins and we will say goodbye to the 20s for good. I think until then we will bounce around between the low 20s and low 30s.

I have been quite for a while as not much to add to my previous positioning ... it is pretty clear to me now that a sensible period of time having elapsed since the patent grants that the odds of a "traditional" capital raise have increased significantly. In my view odds are now something like 80:20 or 85:15 for a dilutive capital raise.

The question then then becomes when and at what price. For me the when is most likely before the end of May ... you maybe able to stretch that out until the end of June but you are taking a risk that the markets will be kind to you. The price .... if no news or SCIB trail start dates we will be sub 5p ..... news or a SCIB trial start date and you are looking maybe 7p or 8p.

Size of the raise ... who knows I can see them doing anything from very small to very large. But you think they would want to buy themselves at least a year and cover the SCIB1 trials and Modi 1 trials .... what you looking at then 10 million or 12 million. Somewhere between 25% and 50% of current market cap.

For all of those who think a deal is imminent I strongly hope you are right .... The calculus is getting pretty tight a deal in the next 60 to 90 days or decisions on what to do in the event of dilution. Given how committed everyone is to the science on this board clearly we are all likely to put our hands in our pockets again if that were to occur.

For all those who will recall in disgust at the possibility of no deal forthcoming in the coming days .... I would be very interested in hearing your views with respect to the probability of deal / no deal and if a capital raise is needed when and what it looks like. I wont hold my breath as I know many can not acknowledge the possibility.

I am getting more and more excited about Chondromimetic.

I was rereading the Hardman report from report from 13 July 2017. It goes in to a good level of detail about Chondromimetic and its potential market. I think the two main points that I had forgotten were :

1) TiGenix paid 14.6 million for product in 2009 (this is more than the current market cap than COS) before changing focus.

2) Using the same technology there maybe other products behind Chonromimetic, I know Jamal has talked about use in other areas (toe/ankle/shoulder) but the product also has applications in ligaments, meniscus and tendon repair. Based on Hardman estimates those markets combined are 3x Chondromimetic. If they can get Chondromimetic off the ground the growth runway is long and even if they only capture a small percent of the addressable market the share price will be multiples of where it stands today.

I think the key will be for the market to see that they can be consistently profitable ... I suspect that takes another year and some announcement of additional contract wins. From my perspective however it really is the longer term that I am interested in. I see know reason within 3 years they could not get to a positive EBITDA 5 to 7 million ... depending on the view from that point I think you could apply a multiple to that of between 12x and 20x. So that could see you with a market cap of between 60 million to 140 million. Even at the low end that is 5x from here.

For me the key is do they need to dip substantially in to the net cash to fund organic growth.

Just on the AD market, yes there are lots of interesting approaches at various stages. In truth we still don't know why the Amyloid trials are failing, is there sufficient levels of antibodies getting in to the brain ?, Are the antibodies binding with less toxic soluble and plaque forms of amylod thus swamping what little antibodies enter the brain and leaving the oligomeric forms untouched, are the trials targeting patients that are too far advanced for antibodies to work ... we also don't really understand what effect the microgila play.

My own view is that we will end up with combination approaches that may include lifestyle changes and drug combinations. I tend to side with the scientist that are looking at the early role played by the immune system in AD. Although they are not looking at AD as an initial indication I suspect something like Athersy's (ATHX US) Multistem will be part of the solution.

Ratty, I am still wondering .....

Morning C7.... Why do you think it is an insto ? the 500k traded lot ?

Pappilon1,

No you would not be wrong and I think in the longer run as pharma rethinks the problems and I suspect looks to combination therapies or other protocols then IXI will be a beneficiary. I see a time when IXI is pared with Cognitive testing in order to establish and monitor the treatment pathway for each patient.

My negative view on the AD trials market is short term and cyclical than long term and structural .... The failure of the amyloids plaques targeting trials means there is really no clear pathway to a disease modifying drug, I think that will cause the pharam community to go away and have a think about what is next. While they are doing that I think you will see a significant reduction in new AD trials started and thus for 12 or 18 months a reduced market for potential new contracts in the AD space. On the other side of that, I think you will see a large expansion in the number of AD trials as pharma starts to trial there revised ideas/thinking.

The only Biogen link I know of relates to the Assessa PML program supporting the early detection of progressive multifocal leukoencephalopathy. Pharmacovigilance is a very interesting area given where some of the new drugs and therapies are taking us ... IXI seems very well placed in this area, I also like the potential recurring nature of the revenues, it would sit very nicely with the more volatile trials earnings. If they can develop this area I think it would be hugely important to the multiple you could look to apply to Ixico.

No I mean function in the sense of a placement pricing based of off a share price seen over the last few months ..... if it happens it will be somewhere bewtwen 4p and 8p in my view. It will be at a discount to the prevailing share price at the time .... I suspect board would wait for SCIB1 trail start, which may see share price rally as high as @ 9p or 10p and look to place at say 7.5p or 8p .... or if they are unable to get the trials under way before they hit the cash event horizon it will be probably at a price lower than today maybe 4.5p to 5p at lower end ... obviously this would only occur in the event other sources of funding are not forthcoming.

Crumbs agree with this "Scancell will not do an OO... it would not be cost effective and too risky.. if anything would be a placing ..."

It wont be an OO. If it is dilutive it will be a placing ..... anything else would smack of desperation ...... I vote for a large single "industry partner". If it is placed to PIs and odds and sods iis, it will not be good for the longer term shareprice performance. If it comes, an "industry partner" will want a meaningful stake and it will probably require an EGM. I also think an "industry partner" will not be to too sensitive to pricing ..... IIss and opportunistic PIs will want a pound of flesh and discount to the prevailing share price will probably be significantly greater.

In truth if they cannot find an industry partner willing to take say a 30% or 40% stake at a function of these prices, then I don't think this BOD will ever be able to commercialise the IP.

This is bad news for the AD market in the near term. I don’t think IXI were on this trial although they do work with Biogen in MS, so probaly no direct revenue impact. There is going to be a lot of going back to the drawing board to find a disease modifying approach to AD.

www.bloomberg.com/amp/news/articles/2019-03-21/biogen-halts-study-of-alzheimer-s-treatment-as-study-falls-short

Just looking at the declared shareholders it is nice to see all but the newest board members hold shares and for some the numbers are pretty decent ! Always good to see the management and directors with decent alignment.

Is a press release or an RNS ? Nevertheless very nice !

Ratty, just to help you along a bit .... just last week our own resident mother hen and romantic optimist, C7 conceded (in a moement of kindness to me) that the vast majority of non profitable AIM listed companies fund themselves from dilutive capital. Now he is still to give me the odds, in his view for SCLP .... but he has acknowledged the possibility.

So come on Ratty, come out and play, come out and play, come out play ! I wonder ....

Ratty, my dear old thing ..... you do spend a lot of time wondering ..... you and I both know that SCLP has some rivers to cross this year .... we also know if, how and when those rivers are crossed will have a significant impact on the share price. The biggest of those rivers is where capital will come from.

I have given my views on the probability’s related to a dilutitive raise as I see them, 60:40 currently going to 85:15 if no deal in the coming days. They are on record and my views can be judged once we know the outcome .....

Are you brave enough to give your views on the issue ? Maybe you may also want to consider including some justification for your thinking (as I have done)? Now it’s my turn to wonder ..... are you brave enough ?

Clearly there is still a larger seller in the market as they were sacrificing price gain for volume today .... City Financial ? Once this block is clear .... path is much clearer for share price.

I am going to hold off until early next week before adjusting up my assumptions on a dilutive raise ..... I feel it is reasonable to give management a few days before concluding patent grant was not trigger for a deal. Yes bring on IND, bring on clarity on access to capital (dilutive or otherwise).. then we should be able to start to pull ourselves up from the canvas.

Smith999, you might want to read the Invesco RNS again.... the notice was for dipping below 13pct not going above it.

Crumbs, agreed on the RNSs .... and the overall IR effort ... getting this right would have a durable and meaningful impact on the share price .... it is not a huge amount of work more a mind set.