Ekf Diagnostics Share Discussion Threads

[tongosti] 28/4/2022 11:06

One feels for our dear wan's ... how to best describe it ... naivite :)10 years of massive underperformance not long enough for our old chap here? LOL

[wan] 28/4/2022 10:42

I am not going to rise to being ridiculed etc, especially when my investment horizons and rationale are clearly very different.

EKF was in fact trading at around these levels in share price terms for all of 2019 and the early part of 2020, but that was before the pandemic, and before the current level of investment and implementation of EKF's Growth Strategy.

So, EKF have been pared back in share price terms, to pre-pandemic when the growth prospects were different (not bad), but arguably the non-COVID prospects, new skills, and new customers, are not comparable to the pre-pandemic period. But unless you take a longer term view, then the share price is all you have to talk about!

[tongosti] 28/4/2022 09:42

While wan the good man concerns himself with webpage refreshes and is in the business of denying reality, it might be a good idea to compare the 0% return EKF has posted over the last 10 years against the +220% equivalent posted by SP500. Huge opportunity cost ain't it. Goes to show why passive trackers are Joe's best friend. Dabbling in individual shares clearly is not for everybody.

[wan] 28/4/2022 08:33

EKF's website has undergone a refresh -



Two pages particularly caught my attention, Contract Manufacturing -

Antibody testing and Molecular Transport Media
The COVID-19 pandemic has changed the way we interact as individuals and changed the face of medicine and diagnostics - possibly forever.

The demand for fast-turnaround molecular testing has grown exponentially as has the need for result accuracy. Faster and more accurate testing, along with a vaccine, are the paths that lead the world back to work, education and to socialise as we did pre-pandemic.

EKF Diagnostics is working with some of the world's leading epidemiology organisations to manufacture and distribute tests and kits that will ensure communities can get back to normal as quickly and as safely as possible.


And Life Sciences, which highlights the increase in capacity -

In 2022 a 14,500 liter stainless steel fermenter and 8,000 liter media preparation system were added to accommodate bulk orders.

[tongosti] 27/4/2022 16:55

Share price moving at the speed of light it seems. Using todays closing price, this level was first seen in the distant Oct 2012. A decade-long progress undone in only a few short months. Wan - what's the latest call on the "fundamentally-driven aka nothing to worry about" front pal?

[tongosti] 27/4/2022 13:19

For those among you who are curious enough - current price levels were first seen in March 2014. Wan my good man - any idea why this "phenomenal growth" story is trading at a level seen 8 years ago?! All ears pal.

[wan] 25/4/2022 10:22

EKF's Annual Report has been published and I note that, amongst other, that in September 2021 Mr Salter was granted a cash settled share based incentive award, replacing his previous scheme. The award vests if a controlling interest in the Company is acquired by a third party at any time.

Details of the updated terms are disclosed in Note 31, page 76 -

The award vests if a controlling interest in the Company is acquired by a third party at any time while the holder remains an employee. There is a minimum price level below which no amount is payable, of per share with the amount payable being 2.5% of the excess sale price above 70p per share. The fair value of this award has been calculated at £3,296,000 (2020:£nil), using a modified form of a Black Scholes model. The key assumptions in the model include expected volatility of 45%, a risk free rate of 0.69%, and an expected dividend yield of 1.1p per share. There is an assumed acquisition premium and option life.

[tongosti] 25/4/2022 09:42

Cosmologist - a meteor is approaching Earth at 5x the speed of soundWan - I note peak bearishness so the future is bright for the stock market LOL

[wan] 23/4/2022 09:53

Staying with the theme of how healthcare is changing in terms of delivery, as per my post 2653 (plus posts 2666 and 2667), including why I suggested it's also worth watching Amazon.

It would appear that Amazon is further emerging out of stealth mode and piloting phase etc. In short, Amazon is changing the way healthcare is accessed and delivered by bringing accessible healthcare to the patient, which can also include whilst at work and "at-home follow-up care for labs, tests, and treatment", and is the complete reverse to the usual pattern of the patient to the healthcare/doctor.

I note that the Amazon Care website has been populated further and there are now recent video's which are insightful and also demonstrates that Amazon is indeed changing the way healthcare is delivered -

Healthcare made easy Video at top of website page, and scroll down for 'Meet The Team' video -

Plus, Amazon Care for employers "care reimagined" -

Amazon Care is also exhibiting at the huge American Telemedicine Association's 26th Annual Conference & Expo May 1-3 2022 -

About Amazon Care
Amazon Care combines the best of virtual and in-person care to deliver a patient-centric experience. Patients can use the Amazon Care app to access on-demand urgent and primary care via in-app messaging and video; and when in-person care is needed, a nurse can be dispatched to a patient’s home.



ATA2022 Conference & Expo
MISSION
ATA2022 – ATA’s 26th Annual Conference & Expo – is the world’s largest telehealth innovation event. It’s where providers, technology developers, business professionals and leaders from across the healthcare sector convene to have an in-depth, thoughtful, critical discussion about the future of health.

[wan] 22/4/2022 07:59

Large diagnostic companies have started their quarterly reporting in the US, with most now reporting core revenues on the basis that exclude COVID-19 testing.

COVID-19 testing demand reduced, but with Quest Diagnostics raising the lower end of its COVID-19 testing revenue guidance for full year 2022 to between $850 million and $1 billion. Overall, there is expectation for continuing demand for COVID-19 testing for the remainder of 2022 and into 2023 as the pandemic moves toward an endemic state.

Overall the underlying backdrop is one of recovery and strong growth from the their core businesses (excluding COVID-19 testing), commitments for continued and further investment in their core businesses, with core revenue growth for the full year in the high-single digit percent range.

[tongosti] 20/4/2022 12:51

If our wan was a company manager and he would be this blissful (as if nothing had happened to the share price) about it all - when he faces his investors - the very least one could say is that investors would be nonplussed with him. Lol. In reality, they would have probably kicked him out ages ago and leave him to his blissful delusions.

[wan] 20/4/2022 08:52

I would add to the above, that I think online pharmacy and in-person care at patients’ homes will also feature. So, we may see very interesting combined offerings of being closer and very close to the patient, offering both the ordering online of self-testing as well as sample collection (and shipping for certain lab tests), convenient healthcare and in-person diagnostic testing in the home, as well as availability at physical brick-and-mortar pharmacies, including in-store such as Target and Walmart's model. So perhaps Whole Foods (owned by Amazon) will follow this model too, delivering the same and more in terms of offering and indeed delivering another degree of convenient patient interaction, reassurance and care etc.

[wan] 20/4/2022 07:43

Very interested to learn more about EKF's laboratory expansion plans, for which we are due an update in due course.

An interesting aspect is as local pharmacies (and doctors offices) begin to perform more point-of-care testing, in part spurred on by the pandemic and driving increased testing volumes, providing test results that are fast and reliable through trustworthy partnerships with laboratories will be a very important element of providing that offering, and will no doubt start to feature -

Cultural Shift: Why Diagnostic Testing Is Moving to Local Pharmacies
Posted by Chris Wolski
Apr 18, 2022

Fuelled, in part, by the COVID-19 pandemic, many local pharmacies have become front-line providers of diagnostic testing and other health services. XIFIN’s Executive Chair and CEO Lâle White sees this as a cultural shift that will last long after the pandemic is behind us.

In many parts of the world, local pharmacies are more than places to pick up medicines. They act more like community healthcare hubs, dispensing prescriptions, health advice, and diagnostic tests.

In the wake of the COVID-19 pandemic, many local pharmacies in the U.S. shifted to this model as they performed COVID testing and provided vaccinations.

XIFIN sees this transformation of the local pharmacy as the first link in the healthcare continuum as a permanent cultural shift that will last long after the end of the COVID-19 pandemic. In a wide-ranging Q&A with CLP, XIFIN’s Executive Chair and CEO Lâle White discusses the cultural shift to local pharmacies, what it means for XIFIN, and for the diagnostic laboratory industry as a whole.

CLP: What are some of the implications of this cultural shift related to diagnostic testing for patients, physicians, and diagnostic labs?

White: As testing needs continue to diversify and menus expand, diagnostic laboratories have a unique opportunity to nurture their existing relationships with retail pharmacies. They can help arm pharmacies with insights and knowledge as they also look to expand their clinical service offerings and testing menus. Ultimately, the more information that can be shared between the pharmacy and the lab, the more information that a pharmacist has about a patient, and can provide better, more informed care.

For example, lab tests have advanced greatly when it comes to genetic testing, so much so that almost 75 new genetic tests are introduced daily. As lab tests are constantly emerging and changing, having a close patient-physician-pharmacist relationship allows for an improved and personalized diagnostic process. The collaboration between the lab, the pharmacist, and the primary care provider significantly increases the quality of care for the patient.

CLP: Will one of the long-term benefits of the shift to testing in local pharmacies mean more diagnostic testing and better overall treatment? Will the modern American pharmacy be more analogous to its European counterparts—where more basic services are offered?

White: The long-term benefits of this ongoing shift to expand testing in local pharmacies will most definitely include an increase in support for more diagnostic testing. This model awards consumers with convenience, affordability, and hopefully provides timely answers to questions or concerns they may have about their own health. Alternatively, it will give providers the ability to manage these services with improved efficiencies and the potential to provide higher quality of care.

Many Europeans already get a lot of their primary care at pharmacies and those pharmacists are much more involved with their patients. As we’ve discussed, the pharmacist is currently a well-recognized provider in most U.S. states. The pandemic and the need for convenient access to testing and vaccines has also been a driving force behind this shift and we’ve seen the success of pharmacy retail chains developing their own urgent care centers and full-service clinics. With more patients seeking care and services at the local level, it’s important we’re creating a lasting relationship between the retail pharmacy and the lab. More importantly, as pharmacies begin to perform more point-of-care testing and vaccinations, we want to ensure that results are fast and reliable through trustworthy partnerships.

CLP: How will the shift to local pharmacies help clinical labs? Will this mean more volume, and, hence, more cash flow? Do you think patients will be more likely to request tests on a more regular basis because it’s easier and because they may have more of a personal relationship with their pharmacist?

White: Historically, labs have been slow to adapt to industry changes. With this new avenue available in retail pharmacy environments, there is an ability to bring labs closer to the consumer and keep up with their demands and needs. We expect to see an increased testing volume with individuals more inclined to seek out healthcare options. We also expect to see an increasing desire to understand how their health impacts their daily lives and what can be done in terms of preventative care to improve their overall well-being.

As I mentioned earlier, we anticipate an increase in testing at retail pharmacies because it’s a more convenient location and eliminates the need to make an appointment at a health center. By having labs and retail pharmacies work together and integrate their systems, I believe that consumers will ultimately have a more transparent view into their care.

Full Q&A -

[tongosti] 19/4/2022 16:29

Only 3 points off 33. We're practically there. Once 33 is cleared, 16p beckons.

[wan] 16/4/2022 10:06

James...Despite Mike Salter's network and track record to date of being instrumental in delivering EKF's previous growth and record revenue, I agree that tangible evidence, as opposed to guidance, is now a required element.

I am not too worried about being acquired at this stage, albeit I can see why PE would be interested (profitable, strong recurring revenues just for starters), which might include separating and selling off the divisions post implementation of the Growth Strategy, where I am sure Life Sciences/Fermentation will be of particular interest and appeal.

But because we have not seen the new remuneration scheme to incentivise Mike Salter and others, which would also include a mechanism designed to pay out in the event that the Company is acquired by a third party, being acquired or taken private is unlikely to happen imminently or before the new scheme is in place. Plus, at the last count, Christopher Mills owned a controlling stake of over 29% in EKF. In any regard, one would expect a very healthy premium, given that investors would be deprived of both a progressive dividend policy, value creation from spin-offs, and indeed sustainable growth.

With the buyback programme complete, it will be interesting to see if we subsequently see any new holding announcements.

Going forwards, I don't discount the prospect of EKF being acquired, but hopefully that would be from a much higher place in share price terms, and surely (hopefully) post execution and delivery of EKF's Growth Strategy.

[james188] 15/4/2022 13:41

Wan,

It is pretty much the same story as for SBI, although EKF is more mature and has a broader offering.

Both companies seized opportunities created by the pandemic, which more than compensated for the impact on their core businesses. They now need to fill the hole created by the inevitable fall off in COVID related revenues. I suspect that the EKF share price will remain in the doldrums until there is tangible evidence that the hole is filled. Personally, I expect that to happen and I may well add next week when the price could well fall further. One worry I have is that EKF could be taken private. Christopher Mills has form in this respect.

[wan] 15/4/2022 10:57

Stoxman...My thoughts, for what they are worth.

With the general cloud hanging over the growth/biotech sector, perhaps exemplified by the fact that there is apparently a record £1.9tn on deposit in the UK at a time when deposit rates are at a record low, it's definitely risk off, but one could also argue that there is potentially a lot of dry powder in the wings.

For those of us still holding the extended family of EKF stocks, on the one hand we are still better off than we were without the in-specie shares, but the overall performance thus far is disappointing to say the least.

With regard to Verici in particular, clearly some investors preferred to sell rather than hold post the lock-up period, and given the dire performance, it appears they have been proven right so far. And it would also appear that the performance of Trellus is perhaps indicating that a similar post lock-up situation could occur starting next month. Personally speaking, I cooled on Trellus a while back given that they appear to be delayed, and indeed the number of companies focusing on similar/overlapping areas is presenting for a huge amount of competition.

Given the unrelenting selling in Verici post lock-up, not to mention the overall performance across the holdings, and indeed the market backdrop, going forwards one wonders if the spin-off model has any immediate candidates/legs, or will indeed follow similar paths, especially if Trellus follows similar price action to Verici.

In my view, Verici is in a more advanced and stronger position. There are larger players that could not only accelerate commercialisation, but that are arguably in need Verici's differentiated and litigation free products, which are underpinned by extensive scientific research and strong IP. At the very least, I am thus expecting partnerships, and I would not exclude Verici being acquired outright.

A partnership deal, or a catalyst breakthrough in any one of the family could have a positive effect on the others, but we have been expecting that from Renalytix for quite some time, and clearly analysts have finally run out of patience with the management at Renalytix, which is not completely unfair, but I can see both sides of the argument.

Again, in my view, it's far too early to judge the new management team, but clearly the market does not like the current forecasts, as exampled below, albeit it I think James had already highlighted such coverage a few weeks ago, so I am not sure how up to date/relevant it actually is -

Some EKF Diagnostics Holdings plc (LON:EKF) Analysts Just Made A Major Cut To Next Year's Estimates
By Simply Wall St Published April 14, 2022



What I did find interesting in the above piece, was the graph, which clearly shows the expected revenue decline. Nonetheless, when you factor-out the COVID related bump, revenue growth in 2023 is quite a lot higher than pre-pandemic revenues, and overall the forecast is on a not too shabby upward trajectory.

According to the chart, revenues and other financial metrics for 2024 are forecast to be similar to the COVID-boosted revenues for 2021. If we were to assume that a similar share price can be achieved to the peak in 2021 of over 80p, some would suggest that, for the patient investor, the current share price is offering a decent entry point and a dividend yield of over 3%. An important difference to consider though, is that the non-COVID related growth in revenues will be far more sustainable!

I am hopeful that managements guidance has been conservative (EKF's Growth Strategy indicated such with regard to fermentation), as obviously it would be much better to resume a period of beating analysts expectations, especially with revenue increases that are sustainable.

[stoxman2] 14/4/2022 22:47

Hi Wan, some really interesting insights. What is your view on the “extended family” of EKF- Renalytix/ Trellus/ Verici? All different businesses but regardless of news flow the prices are being hammered. I’d like to put it down to a general cloud over growth/ small/ biotech but those indices haven’t been hit anywhere near as hard. There’s been a bit of bad news (end of Covid for Ekf, MCITs for RENX, delay for VRCI) but also plenty of good news too. The news seems mildly disappointing but the share prices are down 50-80%. You’d have been better holding Russian Roubles this year than this basket and that just seems draconian. What’s your take on this? It almost seems like the market just doesn’t trust that anything this management team is involved in will amount to anything which has to be ridiculous given the outstanding quality of some of the people involved in and around these businesses.

[drew lonmenob] 14/4/2022 11:29

nothing to do with you laughing at anyone on these boards who has either lost money or who you have made up bs and decided they lost money even when they havent

seriously though, there are people out there who can help you. Bullying can lie deep and give you mental scars for years im told, sweetheart.

[tongosti] 14/4/2022 10:34

Correction dear. Wan has been laughing at himself. Has he listened to my skepticism at 80+ or on the day the c19 vaccine news came out he would he wouldn't be in this predicament would he.

[drew lonmenob] 14/4/2022 10:14

wan, he's laughing at you. Just a word of advice.