Evolutec Share Discussion Threads

[wiganer] 08/1/2007 10:02

Blimey! Takes confidence to add another 1.5% onto a 13% holding...

[master rsi] 08/1/2007 09:14

Has move up further 19 / 20p +2.50p, on a good L2 also 1 v 1

[master rsi] 08/1/2007 08:42

It seems the overhang is now well cleared, as MMs move up prices on small size.

Online able to buy 5K online earlier

Charts - 5 days

1 month candlestick with volume

[pbracken] 08/1/2007 07:29

From the Independent today. Be careful with the author Jivkov, though. His judgements are hoplessly unreliable.

Small Talk: Evolutec's stock should get a more favourable treatment
By Michael Jivkov
Published: 08 January 2007

They say the stock market tends to overshoot both on the upside and the downside. A look at the current valuation of Evolutec certainly proves the second part of that saying.

Last week, shares in the biotechnology group slumped after it quite simply admitted that its rEv131 treatment for eye inflammation following cataract surgery does not work. A month earlier, the company had announced that rEV131 is also no good as a remedy for hay fever.

So it would seem that Evolutec's compound, which it discovered in proteins found in the saliva of ticks, is of little use to the medical profession. Making things worse for the Reading-based group is the fact that it has few other potential treatments to work on.

Given this state of affairs, it is perfectly understandable why investors have been clamouring over one another to exit the stock for some time.

But they look to have gone too far. On Friday, Evolutec shares closed at 17p, valuing it at £4.4m. This compares with a cash pile of £8.7m worth 33p a share. Importantly, Mark Brown, the chief executive, has promised that he will not waste any more money on rEV131, which should cut the group's costs dramatically and help to preserve its cash.

Mr Brown is now exploring all possible options for the company including its sale or a return of cash to shareholders. Whatever he comes up with, it should result in a significant rise in Evolutec's stock from present levels.

[beckham7] 06/1/2007 20:17

pineapple did you buy like i said at 15p

[pugg1ey] 05/1/2007 16:32

nice T trade

[randomwalker] 05/1/2007 15:03

This company has clearly out itself up for sale, as is obvious from the latest RNS. For a medium/large pharma looking to acquire the way they will view the assets is (in order of priority)

1) The team. (innovative pharmaceutical scientists are rare beasts.)
2) The products (they have at least 2 novel active molecules which have passed the initial safety stages; plus the interests in vaccines etc. The fact that one of these molecules have not have not worked in a particular indication does not make it worthless)
3) The cash
4) Leases and other equipment

the fact that the staff will probably be very grateful to be taken over and that 3) and 4) probably exceed the cost of a takeover are what makes such a move likely. The price is unlikely to exceed 35p. But for a medium to large pharma (mkt cap £4Bn+) the cash/leases/cash burn issue is totally irrelevent. The numbers are only about 2 months fuel use for the salesforce.

[wiganer] 05/1/2007 14:46

You continue to misrepresent my views.

I take brokers notes into account, albeit as a secondary source of info. Sometimes they are reliable, sometimes not.

I am not one of the posters who has made big bullish predictions, and I only have a small holding, tucked away as a 2-5 year hold. So, frankly I'm not too fussed about the short-term gyrations and will shut up now.

All the Best.

[yes prime minister] 05/1/2007 14:44

and wiggy... their house broker estimated £8.2m in cash as at end 2006. so they weren't far out with what the company reported. so one can generally rely on their other figures as well.

[yes prime minister] 05/1/2007 14:40

wiggy

well shoot me down for posting some useful info. Now that i have corrected my self and provided BOTH sources, now do you see why the company's cash value is NOT anywhere near what has been stated on here. Whether you like or not house broker's are credible.

as for this :

"circumstances have changed since they wrote the note."


they wrote the note around 4 weeks ago. what's changed in 4 weeks ?

if the broker wrote a rosey scenario for the company saying they had 30p of cash... you would gladly have believed them. Just because they state something contrary to what you want to believe, you come out with the feeble excuse "what do they know".... the last time i looked all stocks that have forward looking profit and loss estimates are based on broker estimates..... thats what the city looks at, thats what you look at... otherwise how do you value a stock going forward.... apart from doing your own calcs ?

[yes prime minister] 05/1/2007 14:34

leave the broker note out, for example, and let's concentrate on the interims to get a rough idea of how much cash they REALLY have



That £13.2m figure ignores all the other assets and liabilities.
Tax credits and receivables amount to about £1m, payables to £2.7m, so you can immediately knock £1.7m (6.5p/share) off the £13.2m. So today's apparent £8.7m looks like £7m, or 27p/share.

However with two trials in H2, that their payables will have gone up - certainly if you look at Notes 5 & 6 to the interims you will see that (payables less receivables) had gone from £814k to £1985k in a year. That's an extra £1m that had been sliced off the balance sheet without showing up in the 'cash balance'.

With the two trials its pretty safe that payables number has gone up even more, so instead of 27p/share you're looking at something in the region of 20p/share - or less. And of course there will still be some ongoing cash burn at head office, in the labs etc.

However, the broker have given a specific figure for 2007 which is £4m.... but you can now see how they got that figure.. which is quite acceptable.

[yes prime minister] 05/1/2007 14:28

wiggy

i am not extrapolating anything. Read Edison's broker note (they are the house brokers) - its all in there - the figures i quoted were from there and the trade and other payables are from the balance sheet stated in the results (c.£2.7m).. in fact i think these would have increased in the last 6 months considering the r&d only stopped this month. Someone posted the link to the broker note some weeks ago. They issued the note post their last disaster (december) - the figures are in there. Unless you think you know more than their house broker.

[wiganer] 05/1/2007 13:25

For you to extrapolate from the last set of results to predict £4m fixed costs for 2007 is guesswork. The results contained no indication of what future fixed costs were likely to be, especially not in different scenarios.

[yes prime minister] 05/1/2007 13:09

look at the last set of results, its all in there.

[lomaximus] 05/1/2007 13:06

where did you get those figures from???????

[yes prime minister] 05/1/2007 10:59

£8.7m disclosed cash turns into £7.2m when debtors and creditors are taken into account. Admin, contracted and non-discretionary expenses for 2007 are estimated at £4m, which will leave them with about 12 - 13p in cash. so the share price is currently trading at 25% above cash value.

[tonyhicken] 05/1/2007 10:55

asset stripping they can call the shots i beleive..


regards

[Abuse team] 05/1/2007 09:14

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[frank spencer] 04/1/2007 18:01

Looks like the overhang was cleared yesterday:

[Abuse team] 03/1/2007 16:15

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