Aortech Share Discussion Threads

[bones] 21/2/2020 08:51

Foldax presenting some clinical trial data next Monday:

[the stigologist] 21/2/2020 08:48

Well done my bit for the cause by telling some City friends (who i first mentioned AOR to at 20/30/40 ish)

AOR Mkt Cap £14m
Foldax Mkt Cap $1000m+ ?
Edwards Mkt Cap $48bn

[the stigologist] 21/2/2020 01:21

Great posts bones

That Foldax scuttlebut is interesting

Of course if Foldax get taken out it increases scarcity value of AOR

[bones] 20/2/2020 21:06

Interesting Landy. Is that recent industry talk as far as you know? I guess there must have been some clandestine chat by the majors in California behind the scenes last week, I shouldn’t wonder!

[landy90] 20/2/2020 20:18

Another thing not mentioned is what is going on at Foldax, the industry chat is they have appointed investment bankers to advise on a sales process to one of the majors. I also understand that one of the bankers were pitching a valuation in excess of $1bn. The number sounds silly but it is disruptive technology. If you want a bench mark, look at the increase in market cap of Edwards over the last 10 years. That is mainly on the back of TAVR which was the last disrupter in the market.

[bones] 20/2/2020 20:06

One other aspect not mentioned is that Aortech’s current intentions for the method of producing heart valves is based on brand new designs intended to enable industrial scale production rates. If this proves successful as a manufacturing methodology, that in itself creates valuable intellectual property. It would enable material reductions in cost and open up huge markets where price matters and need is great (eg, India and other places where access to ongoing medication is prohibitive). The majors would add that to the benefits of acquiring the IP.

None of this was discussed in the research note in express terms.

[bones] 20/2/2020 19:53

Talking of the 30% and 40% weightings given to the HV and Vascular businesses, if we are to assume 100% chance of success (hypothetically) instead, then the valuation would jump to around £18 per share (today less than £1).

Taking it further, if you ignore the 12.5% discount rate assuming 5 and 4 years to possible exit valuations used in the model, then the valuation per share exceeds £30.

Then consider that both of the businesses theoretically are technologically and environmentally superior (no animal by products used), there is an argument that successful exit price would be higher than the historical averages used in the model.

So, whilst it can be argued that 676p is a “pie in the sky” value, it is nonetheless arrived at after some VERY conservative discounting for time to completion, uncertainty of satisfactory progress while not allowing for the value of technological advances.

Wherever you position yourself on the risk curve, today’s ACTUAL share price of 90 pence seems, how you say, PRUDENT??

[bones] 20/2/2020 17:53

Header now updated with new Equity Development research note with link to the full report if you require quick access to it. It’s in the first section with a red coloured title.

[25october1969] 20/2/2020 13:34

Landy90

Thank you for your Frank answer, it fits the Bill.....joking aside, i appreciate your comments

[landy90] 20/2/2020 13:09

25oct
The patches and grafts are simple products, using proven base substrate and elastin which has been in man for many years. It needs to be proven in animals, but can’t see any reasons for potential failure but again it is always what you don’t know that bites.
Regarding heart valve, the design changes and reduction in stress reduces risk, foldax have gotten into man with a similar valve and material. It’s still got a chance of failure but less than assumed in note.

[25october1969] 20/2/2020 12:06

A question for Landy90

Below is the twitter exchange when the Note came out yesterday.Good news but a 30% and 40% chance of success mean a 70% and 60% chance of failure. Do you agree with these figures and where do you think/hope these percentage measures of success will be in 6 months/one year/two years


PMH Capital
@CapitalPmh
·
18h
#AOR. Perfect Andy. Look forward to reading your next note. In the meantime, I see from the 676p valuation, that the 2 main products (ie Heart valve & Vascular) have been assigned a 30% & 40% probability of success - which gives me a fair idea of the likely expected outcome(s).

Andy Smith
@PredatorDiaries
· 19h
Replying to @CapitalPmh
Hi Paul, Thanks. I'll probably expand on that when it's time for the next note, I was going to do a sensitivity analysis this time but the note was getting quite long. It's not going to be just one probability distribution as each product could be separately licensed.
Andy Smith
@PredatorDiaries
·
17h
Replying to
@CapitalPmh
30% is reasonable for the heart valve bearing in mind not just the history, but the complexity of getting an aortic valve to the market. Vascular products are less complex but in both cases, as AorTech makes progress, I can change those probabilities. It's a journey.

[semper vigilans] 20/2/2020 09:52

Concur Langland.

[cocker] 20/2/2020 09:39

100%agree Stig!

[the stigologist] 20/2/2020 08:49

Is it a paid for research house ? Another reason for scepticism. Especially from IIs.

Woodford has left a pall over entire sector. IIs will be even more dubious about illiquid small caps.

This analyst does seem to have decent background though with 3i history

[cocker] 20/2/2020 08:38

Fair points made LL & the company has made progress but is is a long road. Also given their track record one can understand why some are apprehensive to invest. With regards to these notes, all to often especially here on AIM, brokers etc target prices are all to often pie in the sky unrealistic and therefore sometimes need to be taken with a pinch of salt. However, we all know that if or when news arrives it's likely to be good and therefore the share price will shoot up in flash leaving some wishing they had taken the leap of faith. Chart also looks impressive and 1 pound likely to be broken imminently.

[langland] 20/2/2020 07:56

As far as I can tell, the Stockdale broker note with the 400p target was dated 12 June 2018. The low price on the day was 34p and the subsequent rally took the price to 99p 44 days later. It reached 25% of the target. Well, time and Aortech development has moved on so that the new note has a target of 676. Will the market replicate the 2018 action? If so, 170 area is a potential target by first week in April. To get us there I would hope we see one or two updates from the company.

[ny boy] 19/2/2020 16:14

Nice buying recently off support, onwards we go!

Happy with progress here and (PPS) starting to look solid.

[bones] 19/2/2020 12:35

Valuation is partly based broadly on historic heart valve company acquisitions, yet we know that a polymeric heart valve will be revolutionary since it will have BOTH of the positive characteristics that current technology does not have. Currently, there is either mechanical (which grants long life but with lifetime medication to prevent clots), or animal tissue based (which gives “normal living” without the need for medication but is relatively short life leading to repeat surgery at a later date). Polymeric means long life and relatively free of medication.

The value to the big major of successfully proven polymeric valve technology will be immense due to the rush to adoption and the need for a commercial edge. Just because this is a few years ahead does not mean they are not urgently weighing up the tactics now.

The one standout paragraph from the Equity Development note for me (on initial reading) is:

”We understand that AorTech has been in dialogue with potential licensors of its heart valve in order to use trial providers, designs and models that large medical device companies regard as validation for this type of product.”

It is acknowledged in the note that finance will be needed three years down the line, so if some interim funding can be got on the basis of the heart valve development, that could be valuable indeed. (My thoughts only, etc)

[cfb2] 19/2/2020 11:11

I'll bite so others on this thread don't have to waste their time with your comment. You have posted exactly the same comment to two other shares that have had a large rise today:
cl0ckw0rk0range - 19 Feb 2020 - 11:01:10 - 316 of 317 4D Pharma 2018 - from Ј2 back up to Ј10+ - DDDD
Could should go red

Complete con job going on here
cl0ckw0rk0range - 19 Feb 2020 - 10:59:25 - 3243 of 3244 Aortech International – New Projects, New Partners, New Targets - AOR
Could should go red

Complete con job going on here
cl0ckw0rk0range - 19 Feb 2020 - 10:58:45 - 3537 of 3538 Avacta – Innovative and Disruptive Technologies for Global Health Markets - AVCT
Could should go red

Complete con job going on here


You are transparently attempting to short the above shares based on the chance of a retracement following a significant rise.

[cl0ckw0rk0range] 19/2/2020 10:59

Could should go redComplete con job going on here

[the stigologist] 19/2/2020 10:37

Sequels or the difficult second album don't go down well

In this case we know the original 400p broker note had little to no effect

Anyone who researches this themselves knows the potential

AOR need some serious research houses with Institutional distribution to initiate coverage