Renalytix Share Discussion Threads

[yasx] 30/6/2022 17:34

Wan,

Not so - they have not generated meaningful sales and you know it - $2.9M is not a few million, and even if sales were a few million that would be inadequate. They have given a clear indication that shareholders will in the future be diluted heavily, and you are relying on hoping for partnerships which you suggest are contingent upon FDA approval but there is no certainty as to when or if that will happen - even if it did happen, there is no certainty it will lead to such partnerships or sales. In any event, for existing holders, Renx do not have the time to see this through, the cash burn means further raisings are inevitable fairly soon.

You really have to question whether or not there is even a market for this product given the lackluster performance to date.

[wan] 30/6/2022 17:06

YasX...Thanks, but with regard to your comment that "this lot can't even muster up a few million pounds worth of sales" is out of date, because you will note that approximately £2.4m in sales have been slated in for the FY 2022 (ending today) -

Current trading and outlook

We reported testing revenues of $0.8 million in our fiscal third quarter, compared to $0.7 million in Q2 and $0.5 million in Q1. Volumes with Mount Sinai continued to increase in Q3 and, while the first half of Q4 saw an initial reduction in these due to temporary changes in procedures and automation systems at Mount Sinai, the second half of Q4 has seen a return to Q3 levels. We anticipate that continued increasing Mount Sinai volumes, coupled with additional hospital systems coming on-line in fiscal 2023, will result in corresponding increases in testing volumes. Based on information available as of today, we anticipate Renalytix's revenue for the 2022 fiscal year ending June 30, 2022 to be approximately $2.9 million (of which $2.7 million is testing revenue), up from $1.5 million in FY 2021, of which $0.4 million was testing revenue.
(END)

I am hoping though that that $2.9 estimate is on the conservative side, time will tell.

Clearly the anticipated strategic partnerships could change the dynamics, and I do wonder if any of those partnerships are predicated on FDA approval given the clear and definitive pathway that opens up for platform expansion, not to mention a significant widening of the Renalytix moat!

Anyway, fiscal 2023 starts tomorrow, so as I said previously, the next 6 months will be pivotal, but I am quite sure that management already have near to touching distance on a number of those milestone/catalysts. Again, only time will tell.

[yasx] 30/6/2022 16:21

Digger,

I have no idea what you base such optimism on, but it is entirely detached from the underlying reality.
Look at the financials and tell me how they will continue this time next year with that sort of burn rate.

Simple point: If they can't generate revenues with that sort of expenditure, even if they were to now scale back expenditure, the less they spend, the less revenue they will generate. Ultimately, capital discipline now will simply delay the inevitable. They have made all the same mistakes as 4 d Pharma - that has disappeared and so too will this. All the interesting technology is of nil worth to shareholders if it can't be monetised.


Wan can reproduce as many articles and posters about the multi billion dollar kidney diagnosis market, but the reality is this lot can't even muster up a few million pounds worth of sales. Even if they now get FDA approval, given their precarious financial situation, it is too little too late. Had they raised at, say, £5 when the shares were over £10, they might now have sufficient cash to see them through a difficult period while FDA approval lasts and given them adequate funds to generate sales. But, that is all water under the bridge.

[yasx] 30/6/2022 16:16

Idomeneo,

Agreed.

[yasx] 30/6/2022 16:15

Wan,

The absence of forward guidance is tacit acceptance that such guidance would be woeful if it were provided. You are merely kidding yourself if you think substantial financial contributions are set to be received from partnerships - the product is out there, the use of it is attracting negligible interest. The problem is that the burn rate is completely out of sync with product take up and there is nothing on the horizon that indicates that is set to change.

This is essentially bust, or will be in due course. Existing holders will continue to be diluted and eventually diluted into oblivion until they can raise no more - at that point they will put out an RNS stating they are undertaking a strategic review given lack of funds and that will be the end.

In the current market they will struggle to raise a sufficient amount to meet the going concern statement in the next set of results. These biotech ventures need to firm up their funds when sentiment is high and shares have risen markedly (in this case over 10 fold in some 18 months) - but, they did not which is a major failure in adequate planning for the future. Now this is just a lifestyle vehicle for the Board to ride until all the remaining funds evaporate.

[digger18] 30/6/2022 15:14

On a positive I note they mentioned that testing revenue for FY22 (inc Q4) was circa $2.7m ( as I remember) so continued growth in Q4. Nowhere near enough, but they seem to be bullish on their game plan with hopefully a substantial rise in numbers in FY23. My holding has been decimated, so I need to stick with it! But based on the call, I am optimistic.

[wan] 30/6/2022 15:08

According to the CEO during the call, that forward guidance that I referred to will 'hopefully' be able to be communicated this calendar year, but subject to certain outcomes!

There is still a lot weighted to the second half of this year, including the much talked about strategic partnerships (which apparently has the potential to make significant financial contributions), but the market (and me) is increasingly losing patience, but clearly some are losing faith in the management and the hope of realising the investment potential.

Hence, the next 6 months is now not just important, but an extremely crucial period!

[idomeneo] 30/6/2022 14:02

yasX

The trouble is, this board is an echo chamber - it's typical for all ADVFN boards. The busiest board are for the worst pie-in-the-sky stocks. I thought that RENX might have something, but could see that progress in sales was slow and the general market was poor. The trouble is, if you ask questions you get shouted down. I thought they might run out of money (reply: "It's complete nonsense to suggest RENX will run out of money") when the share price was > £2.40. My main concern was the bear market and the Ukraine situation. And experience tells me that when stocks are going down then finance dries up. I'm surprised at the apparent industrial scale of lying that the board appear to have indulged in. As I've said before, if the doctors at Mount Sinai could see it working then the word would have spread the word and the share price would have at least flat-lined.

[hpcg] 30/6/2022 11:28

At least this is an easy company for a non-holder to monitor, just look at the revenue line and see if there is any. Wish I'd gone short having quickly reversed my misadventurous purchase after the raise. In fact I wish I'd gone short after I sold out my original position last April and May, but I wasn't anticipating this lack of progress at all.

[yasx] 30/6/2022 10:49

Mr Roper,

I agree.

[mr roper] 30/6/2022 10:26

Mills was on vox markets talking about it two or 3 days ago. In my opinion he's trying to cover too many roles and his eye has clearly come off the ball here.
NASC Trust, Oryx, Pinnacle and Amati...Will be interesting to hear from them.

CEo said he wouldn't scale sales til he direct revenue line of sight. 12 folk on the VA...not even live. Sales team on a paid holiday. Big questions asked of CEO now and as for the CFO...should be fired.

[yasx] 30/6/2022 10:13

As for Christopher Mills, I seem to recall (someone will correct me if I am mistaken) that he very recently indicated the Co. had sufficient cash for its rollout over the next two years - clearly that is not the case.

[yasx] 30/6/2022 10:07

Tom,

Well, you did apply the same criteria to INSG - so why should RENX be treated rather differently. Both are essentially plagued by the same variables - lack of sales, needing funds to survive, talk of interesting technology. One you were assessing on the basis of the balance sheet/earnings metrics, this you were totally blinded to and talking of fabulous tech.

A book for beginners might be useful for you....

[donald pond] 30/6/2022 09:53

I am surprised Mills allowed this to happen on his watch. It's not complex: until revenue is coming in keep a tight rein on costs.

[yasx] 30/6/2022 09:40

74Tom.

Having seen you on various threads, it appears that you are almost invariably lured towards highly speculative plays, most of which have collapsed - perhaps you ought to reconsider that strategy in the context of existing market conditions and generally even when markets are buoyant. These things rarely materialise into profitable ventures. These vehicles are useful for training, but not as investments.

Of course, what any reader does is a matter for them and far be it from me to offer any guidance, merely an observation.

[yasx] 30/6/2022 09:35

Some of these CEO's/CFO's of early stage development Co's need to have their heads examined - when you have little to no sign of significant revenues but have substantial annual expenditure, you need to apply a bit of common sense and think that your shares have risen 12-fold in a year or two and that should be an opportune moment to secure a long term future - even if it is as a contingency measure. But, they just do not see that - instead, when funds dry up they turn to the market and blather on about how good the technology is, and then complain when the market expresses no interest.

This needs FDA approval and very soon if it is to survive. They also need to scale back expenditure to a bare minimum until then. There is no certainty they will get the aforementioned approval.

[74tom] 30/6/2022 09:32

@Wan, at the very least I was expecting Q4 revenues to break the $1m mark, to be flat vs Q3 is very disappointing given that $800k revenue equates to ~840 tests reimbursed / 70 tests a week. Last September's Sinai RNS stated they were aiming for 300 tests per week by the end of FY22 so there are nowhere near that figure. There's also nothing on VA testing other than the fact they have been 'brought on line'.

If they had a large cash pile (like MXCT for example) or very low overheads then this would be fine, but that's clearly not the case. The final straw is the $300m shelf offering inclusive of a $50m ATM facility. This will put severe pressure on the share price and is laughable given the liquidity on NASDAQ & the current market cap.

FDA approval and/or a major partnership has to land in the next quarter, it's as simple as that. I'll believe it when I see it...

[yasx] 30/6/2022 09:31

As for the idea that a buyer for the Co. should step in, as one poster above alluded to, well, why would a buyer pay a decent sum when it could quite easily pick up what it needed when this goes into administration in due course, as appears likely.

[yasx] 30/6/2022 09:28

It does not matter what anyone makes of it - the results are plainly clear.

I previously pointed out that without FDA approval this will never generate meaningful revenues and that continues to be the case. This is a Co. that has negligible revenues, disproportionate costs, no capital discipline and is looking to raise funds in a market that has very limited interest in throwing money at speculative high risk punts with no sign of revenues for years to come or at all. There is more chance of this going bust than raising the sums they alluded to today.

This reminds me of 4d Pharma - they too thought their technology had appeal and did not raise a sufficient amount when they shares reached lofty heights in 2020/21. Renaytix ought to have realised that it would need considerable funding in years to come and should have raised whatever it could when the shares climbed above £10 - instead, with the shares at just over 100p, they are now looking to tap the market at a time when even good offerings are struggling to raise cash.#

This looks like it is in major trouble - there is a real existential threat and I doubt it survives for much longer as a serious investment. No doubt the conference call will refer to difficult market conditions, but this is why CEO's of such speculative plays should take advantage of raising plenty when sentiment is favouable and prices are high, not the other way around.

[toffeeman] 30/6/2022 08:56

Wonder what Paul Hill will make of it? :)

[wan] 30/6/2022 08:55

Clearly the scales are heavily tilted towards the costs/overheads atm, but it's not only the current earnings that most affects the share price, but the guidance/forecast. In this regard, Renalytix has started with albeit limited guidance, but now that guidance has started, and given the previous reluctance to issue 'any' guidance, it is perhaps (hopefully!)indicative of the direction of travel, whilst factoring in Renalytix are pleased with the sales infrastructure they now have in place to pursue the large Veterans Health Administration and commercial hospital opportunities.

Clearly the market was expecting a lot more from today's Results details and the limited guidance though, thus, the conference call and live webcast later today will be very interesting in terms of the questions and answers.

[mr roper] 30/6/2022 08:55

Mills is Chairman. Needs to get the finger out.

[donald pond] 30/6/2022 08:54

I have no idea if there are any wise business heads on the board or if Chris Mills holds sway here but I would suggest they need to start looking for a trade buyer. If it's any good, let a big player take it forward. This is an example of where huge options and ridiculous salaries for a non profitable company mean the board has no alignment with shareholders and NEDS are supposed to bridge that.

[74tom] 30/6/2022 08:44

That was a nightmarish RNS, no other word for it. In my opinion the CFO needs to be replaced ASAP with someone who can actually manage the companies finances. To raise capital 3 months ago at £2.76 and then decide that no, you actually need to raise more cash via a $50m ATM facility is frankly unbelievable. Accountants are supposed to be prudent and plan for the worst!

Ultimately it comes back to the points discussed here a few months ago; why on earth didn't they raise significant capital last summer when the market cap was >$1b if they were planning to expand overheads to a $40m run rate? It's just ludicrous & threatens to destroy any chance they had of commercialising a potentially brilliant product. I'll be very surprised if this comes back now, I'll keep watching but am out for the foreseeable future.