Cambridge Cognition Share Discussion Threads

[yump] 16/10/2024 08:15

The market potential for lots of stocks is staggering but that requires great management and great sales. I don’t see any evidence here and I’ve lost money before very easily after been drawn in by potential. There’s only potential when you have a viable business growing revenue.

But I’m ok with my minor punt just in case. I think thats all its worth at the moment and I haven’t suffered from FOMO, ever since the dotcom boom.

[earwacks] 16/10/2024 08:03

Hi all. Been otherwise engaged recently and avoiding looking at the markets because clearly we are in another abnormal situation with the market unable to reflect what is actually happening and totally against business news. The only thing worse that a corrupt government is a clueless one. Having said that the pr of this company is woeful. They sack the ceo and cfo and just tell us they are looking to replace them basically leaving the company up in the air . No news on contracts. They are not the only ones with diabolical communication. I agree the potential is staggering. Unfortunately the market values that at zero. Very frustrating. I would like to invest more but the way the whole company has behaved in the last two years is nothing short of outrageous in just about every aspect.

[40 fathoms] 16/10/2024 07:20

Yesterdays volume should have been enough to finaly clear out the selling Insto, they may have another @100k left but they should almost be done.

[bedford1976] 15/10/2024 15:15

This is my most frustrating share it has all the qualities for being a very highly valued world leading healthcare company. The market is most definitely there and growing year on year, but the share price is depressing. We are basically valued at rock bottom even after years of
development, and IP that must be worth 20x the current market cap. We paid 7 million for Winterlight Labs alone.

[40 fathoms] 15/10/2024 15:10

A couple of things to keep an eye on, there are 3 or 4 preferred CNS eCOA supplier contests with big pharma on going and due to conclude in the coming months. Assuming we are involved in these, anyone these would be for multiple trials per year and be worth many million in annual revenue.

We should also keep an eye on what BMS does now with the Karuna assets they purchased. We are deeply embedded there and were significantly involved in the trials that got KarXT to approval. There are more indications this therapy can address and they have a number of other advanced drugs in their pipeline. There could be a very significant amount of revenue from this direction over the next few years. Also possibly for Winterlight with its Alector ALS therapies which now have GSK backing and should be active in the clinic over the next few years.

[40 fathoms] 15/10/2024 15:02

I am not sure fair market value has any meaning on AIM at the current time. If they were to put themselves up for sale, a fair price would be 2.5x to 3.5x FY2025 revenue + whatever Monument Therapeutics position is worth.

They have a number in the market for revenue next year of GBP15 million (approx 40% of which is already contracted) so I will use that until we hear otherwise - That equates to GBP 37.5 to GBP52.5 million. With monument in the clinic next year the equity and the top line royalty are comfortably +GBP5 million.

So that gets us to 110p and 150p per share. That range feels about right to me, however the delta is the revenue. If they don't land any large contracts in the next 4 or 5 months that revenue number could be GBP 10 million or if they land a few that number could be punishing on to GBP18 million.

We are in the selling seasons (use up this years budget/release of next years budget) so I suspect we will pick up a few larger items of work.

[mdchand] 15/10/2024 14:42

40 fathoms as the resident expert on COG at what price do you consider these fair value as the market is clearly reacting sharply to limited selling?

[jasperlachat] 14/10/2024 17:20

I don’t want them talking to anyone, too much potential here. The Stork update confirmed all was going satisfactorily. Fuming about the period post placing but will go apologetic if this gets taken out for fuc all.

[bedford1976] 14/10/2024 14:54

They been to get talking to Cogstate and just sell up for a decent price.

[nchanning] 14/10/2024 13:17

Would be happy to back up the truck on an inline update . But the firing of the CEO and the big H2 weighting required greatly increases the risk of a profit warning imo . And with 80% gross margins a little miss on revenue really hurts and would make the cash position tight again

[yump] 11/10/2024 17:09

Seconded - thanks.

This bit in particular: "Especially in CNS, there has been a reluctance to start new trials, for conformation you can see the same issues at Ixico and Cogstate both with a CNS focus." Something I wasn't very aware of.

I do appreciate that Covid did play a big part in making medical and related stocks trendy and overpriced. Got caught in a couple. Had this on a watch for a while and surprised when it got so low. Hopefully an inevitable undershoot !

[bmcollins] 11/10/2024 16:51

@40 Fathoms
Thanks for your synopsis, I for one found it very illuminating, appreciated.

[40 fathoms] 11/10/2024 14:17

@jasperlachat - Always a concern for sure but given the business is now probably profitable and cashflow positive and it is reasonable to expect some growth, I am not sure the board would have any immediate pressure to entertain a "cheeky" offer.

[40 fathoms] 11/10/2024 14:13

@yump - there are long involved answers to various concerns but here is my view with the nuances removed the purpose of brevity.

The previous CEO was strong in some areas but struggled conceptually with running a profitable business. He overpaid for the Winterlight acquisition and significantly overhired during the Covid revenue boom. While there’s some debate over the appropriate level of R&D spend, the substantial cost cuts, both planned and unplanned, haven't impacted essential operations. In fact in the last few weeks they have added additional headcount in sales and have announced they have achieved a rether remarkable net promoter score of 100.

It’s the Clinical Trials market, not the Pharmaceutical Market that is the key to their business, which although related are not the same. Especially in CNS, there has been a reluctance to start new trials, for conformation you can see the same issues at Ixico and Cogstate both with a CNS focus. Small drug developers have struggled to access capital in a high-interest rate environment, and larger developers have been reshaping their portfolios and focus areas—Biogen being a good example of this. Both of these structural issues are resolving, and it’s reasonable to expect many long-delayed trials to move forward soon.

I believe the business is in a better position without the old CEO. The cost base is now about right, and even without a revenue increase, the business is now profitable and generating cash flow. With the new board members added earlier this year, I’m confident they will prioritize sales, profitability, and cash flow in the foreseeable future.

[jasperlachat] 11/10/2024 13:48

Thanks 40 Fathoms / they certainly don’t want me dropping my lot on the market. Trouble is we are now very much open to a ridiculously low ball offer.

[yump] 11/10/2024 13:48

I don’t mind overhangs, its the two areas I mentioned that bother me.

For the moment, I’m assuming its a handy collection of products yet to get significant traction.

However, concentration on reducing costs at this early stage makes me wonder wtf was going on previously.

If the spend resulted in rapid growth of a product, then fair enough.

Perhaps the market is very new but COG have been around for 8 years. Imo the state of the pharmaceutical market is irrelevant to the business - or should be if they’ve got a great product

[40 fathoms] 11/10/2024 13:19

Some seem to be misunderstanding the situation. The share price is dropping due to a sizable seller offloading their remaining shares in a tough market. We know who this seller is and how many shares they have left; they will be cleared out soon.

Anyone suggesting this is a lifestyle business doesn't understand Cambridge Cognition, the markets it operates in, or its market position.

Another point worth making is that the company is likely to signficantly outperform house brokers' profit forecasts for FY 2024 due to the departure of the CEO and CFO in the second half, as well as other unexpected departures that may or may not have contributed to the CEO's exit. There on a run rate basis will reduce costs by a further 800k per year.

We are entering the selling season, October to April. If Cambridge Cognition secures a few large contracts, which historically they have done every year for the last 5 or 6 years, the company will be extremely well-positioned.

[johndoe23] 11/10/2024 10:23

Yep, unfortunately like so many on AIM

[bedford1976] 11/10/2024 10:21

Well they might get a shock when they end up in the real world

[phowdo] 11/10/2024 09:02

Its a lifestyle business. Always has been.
It exists to fund the directors' lifestyles at your expense.

[bedford1976] 10/10/2024 20:20

Yes indeed I concur with your thoughts here I cannot possibly see this staying independent much longer. The market capitalization is now ridiculous.

[jasperlachat] 10/10/2024 19:16

The company is already up for sale with current SP!!! No idea if Stork got a payoff or not but this is the only news we get for our additional investment.

[bedford1976] 10/10/2024 18:55

I think we are at the stage where the board of directors need to put the company up for sale.