Significant news7 Dec 2021 10:07
Couple of things...
NASDAQ listing. It has not been ruled out. It will come when the time is right. But don’t expect that to result in a huge rerate. Look at PXC, ARB, DDDD of late. The listings haven’t propelled the SP.
Sales - we know the NDA story so not going back over that. But Adam clearly has had enough transformational contracts in to make it ‘material’. Remember at the interims he was clear that they were signing deals all the time but as a stand-alone many would not be termed as material. On top of these ‘Significant Q2 FY2022 sales activities’ and more to come before Christmas. Isn’t that what we want to hear?
To be recruiting so aggressively in the US is extremely positive. We have probably all been around long enough to know that it’s the sales teams that get the tech out there. They are the ones that ultimately drive revenues. This allows the scientists to do the science. It’s a great symbiosis. And as pointed out on a +80% margin if you scale this to hundreds of thousands of tests. Which is what we are talking about that is a potential ‘printing machine!’
Finance, cash wasn’t an issue. The CFO said revenues would cover costs. They also have a flexible loan. I haven’t dug back into the numbers yet like I did before buying but obviously if the pace of the operational scale runs ahead of existing funds then they will need some sort of bridge. I wouldn’t expect that to be on the scale of the last placing which was to expand the infrastructure at Dortmund but it may be a short term loan or a small placing for working capital.
Personally I would like to see a larger placing for a US lab acquisition followed by a US listing. That would be immensely accretive reducing lead times to sales and make a US listing more meaningful to the US market.
ONC is not really a trading play (I get all are), but the point is it’s a longer term growth story. It will have ups and downs. I have a position here that I am comfortable with and having exited ERGO just before it really started to move I am not going to do the same here.
I don’t know anything about the poster ‘lightweight’, but when one talks of significant losses on one stock it sounds like being over leveraged and expecting a lot just too soon. But that’s a guess.
On a risk side, I think that comes more from new VoC’s than from cash. The stress on health services could again have an operational impact. It’s a shame really as ONC offers smarter working. Fast track cancer diagnostics at lower costs which will speed up patient ‘tail management’.
Downside is mitigated by ONC’s UK plc funding as part of ‘Lighthouse Labs’ testing and long covid work.
ONC have a unique pf of products that are in demand and cannot readily be replicated by big pharma. The more contracts they sign the more they get and customers are coming back.
This is a great British biotech story that imo will a some pint be a billion GBP company.
Usual caveats
Trek
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