Cambridge Cognition Share Discussion Threads

[nchanning] 22/10/2024 07:48

Most recent broker forecast has year end gross cash of 1.39m and net debt of 1 million . With 90% gross margins if they miss by even 1 million on revenue line things seem very tight ...and you've got the risk of an H2 weighting and a CEO firing

[bmcollins] 18/10/2024 14:01

@40Fathoms
Thanks for that reassuring post as I dribbled a few more in today and was less than happy when I read the earlier post re a cash shortage !

[40 fathoms] 18/10/2024 13:33

Cash is not tight, see above. Added to which there was a whistle clean going concern review statement in the recently released interim statements.

[40 fathoms] 18/10/2024 13:32

We can breathe easy on the cash front, thanks to several factors:

Gross Cash vs. Net Cash: Although net cash was reported at £1.1m at the end of H1, gross cash stood at £3.4m. The difference is the liquidity from the self-amortising three-year facility drawn down a year ago, which still has a remaining balance of £2.3m. Thus, even in extremis there is no issue with liquidity.

Contracted Revenue: Excluding new contracts, @£10m of our contracted order book will unfold over the next 12 months. While the exact timing is unpredictable, these are ongoing trials and studies, ensuring revenue during this period.

Upfront Invoicing on New Contracts: New contracts come with a 10% upfront invoicing for the software sale. This helps build cash quickly. We saw this during the Covid period when the cash position reached +£8m after several contracts were signed before we spent it all on Winterlight Labs.

Cash Costs: After the resent round of cost savings the annual cash costs, including facility amortisation, are now between £8.5m and £9m. In a worst-case scenario, we could find an additional £1m of savings by delaying some R&D expenditure without impacting short-term pipeline conversion.

[bedford1976] 18/10/2024 13:30

If things are as tight as you suggest it is imperative we either merge or sell ourselves to Cogstate. Not too bother about holding an AUX share.
I will write to the board and see how the land lies.

[nchanning] 18/10/2024 10:50

Only problem is running out of cash on AIM is a nightmare at the moment even for the quality growth companies . Just 1.1m net cash at the end of H1 if they don't pull through with a strong H2 the market is going to think there's another placing coming , the share price tanks , then the placing gets done at a discount to the falling price as institutions can name their price in this market . Would almost rather invest at double the market cap with a solid net cash position

[bedford1976] 18/10/2024 09:18

Looks like the seller has been cleared now. Hopefully the share price will bounce back now.
Agree CamCog is one of the biggest bargains on AIM at the moment.

[jasperlachat] 18/10/2024 02:19

Two for the price of one. At 28p whatever’s going on at Cog, this is an absolute steal. A market cap of £12m - we’re a gonna!

[40 fathoms] 18/10/2024 00:14

@jasperlachat, your point is probably not too far from the mark if you account for the fact that the top line gross royalty is essentially non-dilutable equity.

[jasperlachat] 17/10/2024 14:48

Would probably get a bigger equity interest by putting £1m here!!

[40 fathoms] 17/10/2024 04:00

There was some Monument Therapeutics news yesterday ...... need to keep an eye on Companies House filings to see the valuation this was done at.

[yump] 16/10/2024 07:15

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 07:03

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 06:20

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 14:15

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 14:10

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 14:02

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 13:42

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 16:20

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 13:54

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

[nchanning] 14/10/2024 12:17

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 16:09

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 15:51

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

[40 fathoms] 11/10/2024 13:17

@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 13:13

@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.