Renalytix Share Discussion Threads

[nimbo1] 27/5/2020 10:45

The way I read this situation is Renx could be a good buy at this level assuming its product becomes successful in a relatively niche way. I.e. it does a few 1000 tests per month for people who want the extra insight - that could support todays share price. revenue c.£50 mil a year with margins at c.40%. i.e. c£15 mil PAT and PE of 30.

The upside is it becomes ingrained as part of the US healthcare system as the standard practice for kidney care...in which case you'll have a 10x +.

Price needs to consolidate for a while imo.

[74tom] 27/5/2020 10:38

Faz, your comments are very glass half empty to say the least - it makes sense for RENX to list in the market where they operate & where the management team are based. I presume that they opted for an AIM listing to begin with because the product wasn't far enough along the path to commercialisation, two years on it clearly has made significant progress.

For me the main reasons to list are;

- Improved liquidity for the shares
- Raise cash to grow the business
- Increase awareness of the business in the market it is going to operate in

Listing to attract a bidder doesn't make sense, why would anyone wait until a company's profile was raised before making a bid?

The US markets have been toppy for ages and not reversed properly, most likely due to the amount of new cash added to the economy by the FED. Pharma / tech stocks have been well insulated and I don't see why that won't continue.

Absolutely not a golden handshake, but for Pharma companies it is the best exchange in the world to list on, no doubt about that.

[nimbo1] 26/5/2020 22:27

Depends on the news flow imo - all this companies operations are in US. Certainly not much attention over here! FDA approval = good gains most of the time.

[faz] 26/5/2020 21:42

Just to say a NASDAQ listing is not a golden handshake, and the US stock market looks very toppy right now. If it reverses a company would do well not to list. But if it does zero activity is more likely than zoom activity imo, but a listing can be useful if either fund raising is needed or attracting a bidder that perhaps would welcome a US market prescence.

[74tom] 26/5/2020 16:41

Two very chunky delayed buys this afternoon - 12500 @ 4.35 and then a further 9984 @ 4.38. Next news could come any day, take your pick from;

- FractalDX spin off update (pricing & timing)

- Update on commencement of pred-MAKER project to study the links between Covid-19 and the Kidney's using RENX software

- FDA EUA submission for the Mount Sinai antibody test (submission before the end of May according to the Bio-Techne RNS last week)

- More details on the forthcoming NASDAQ listing - only announced a week ago but I doubt they'll be wasting any time (detail on pricing, amount to raise etc etc).

- FDA Approval for KidneyIntelX

- More partnerships / regulatory progress towards commercial launch

This is a very exciting share which I'm very pleased to have discovered :)

[nimbo1] 26/5/2020 14:19

Needs time to consolidate i would think barring further news.

[74tom] 26/5/2020 14:03

Sorry yes you're right, definitely a possibility - although I'm not sure how many US citizens would have held EKF prior to the spin off... Also not sure why you would sell ahead of a NASDAQ listing! All quiet again today after a relatively busy start.

[nimbo1] 26/5/2020 13:26

There could be individual US shareholders From the original spin out. Mount Sinai are a US holder! I’m not saying there definitely are but surely a possibility

[nimbo1] 26/5/2020 13:07

restricting lifted for any sellers too though... not just buyers

[74tom] 26/5/2020 10:52

Interesting to note that you can now buy via Barclays, so the international restriction on buying shares has finally been lifted... will we see some US buying this afternoon I wonder?

[74tom] 26/5/2020 07:47

Nimbo1, yes there has been consistent progress with jumping through the regulatory hoops. The announcement of the NASDAQ listing certainly suggests confidence & that initial revenues are on the verge of occurring. N+1 Singer assume a 55% chance of success in their current figures I believe, although what constitutes as ‘success’; is clearly subjective!

If / when the US market is scaling up, we can then turn our attention internationally, as has been stated several times by the company.

As an aside, is anyone aware of any comparable NASDAQ listings for AI health diagnostics companies that we could use as a benchmark to potentially value RENX against? I couldn’t locate anything from a quick search, but that doesn’t mean they don’t exist...

[nimbo1] 25/5/2020 21:45

74tom - On the kidney IntelX front its about how quickly demand ramps up for the testing and the navigation of the US healthcare system. They seem to be doing a good job...



From here its all about whether their system is a niche offering or whether it becomes part of the US healthcare system for people with kidney problems - if it becomes the default standard of care this will be a must billion $ company.

Im not yet sure how to put the % chances of success but do already own a lot of these.

[74tom] 25/5/2020 21:27

The other aspect of RENX that makes me very positive is how under the radar it is. The lack of discussion both here & on LSE is very unusual - possibly because it looks expensive on the surface if you glance at it and don’t do any research? The more you dig the more the potential for a huge growth story becomes apparent.

I found the following article from our current CTO back in 2014 really useful for understanding more of the science;



Also this recent journal summarises the current landscape & gives unequivocal backing to the RENX science - whilst stating there is still a lot of work to be done in general.

[74tom] 23/5/2020 22:19

Hi Nimbo, I've been doing the same thing and have come to a similar conclusion regarding the medium term valuation. It's got all of the ingredients to be a multi billion pound company, regardless of the additional Covid involvement.

- Huge potential market
- Game changing technology
- Flawless execution to date
- Unique relationship with Mount Sinai
- High barriers to entry for competitors
- Significant and increasingly valuable IP that strengthens their competitive position

The main risks are all related to timing, however their strategy of starting the regulatory process at the same time as the clinical studies has reduced the likelihood & potential length of delays.

I find it especially intriguing that until 5th May there were securities laws that prevented any US domiciled citizen from owning shares, despite the company being based in America & targeting the US market. Clearly a NASDAQ listing was always in mind, and I can’t help but think they will value RENX shares significantly higher than AIM...

[nimbo1] 23/5/2020 16:47

I've been doing a lot of work on renx and come up with some simple numbers at the end of it - if things go right and excluding the covid testing.

In 12 months testing capacity is fully utilised - 15,000 tests per month x 12 = 180,000 tests per annum.
Revenue from KidneyIntelX is $171,000,000 per annum. (180,000 x $950 price per test).
Brokers estimate PBT margin will be 40 % (off much lower revenue forecasts while stating they are conservative).
0.4* 171,000,000 = $68,400,000 PBT. Tax @20% = PAT $54,720,000 * 30PE = $1.6 billion = £1.4 billion £.

1.4/ 0.25 (current market cap) = 5.6X upside if full testing capacity is utilised. (not including covid testing).

So this could be a 5 - 10 bagger here on a 2 year view - any opinions on that statement? If I am right this won't stay at this price for too long - might tread sideways a bit but more institutional investors will start to cotton on and the share register is tight.

The 2 downsides I have in my excitement are is I my optimistic target assumes testing capacity is utilised quite quickly when I have no insight as to how long it will take to ramp. (However the brokers are only assuming about 25% of the revenue I have mentioned but mention it might be very conservative).
I also assume full medicare is passed on the basis of Mount Sinai involvement - I don’t know the risks here.

[wantage] 23/5/2020 13:49

Zak said 650p not 850p. I'll go for the latter.

[wantage] 23/5/2020 13:44

I'm not a great believer in technical analysisbut good to see Zak Mir, the popular and well known chartistHas aligned with fundamentals and come up with 850p target in his Covid round up.Of all these stocks Renx least speculative as so much else going on. Much rather be here than one drug wonders or outlandish speculative fantasies like Haemogenix.

[nimbo1] 21/5/2020 12:28

The key is in the ability to execute at scale...

[trickydicky1] 21/5/2020 12:17

74tom, Not sure there is a huge amount of IP in this. Pricing at $10/test is only likely to attract a lot of competition. At <$5/test, will be hard/impossible/not worth the effort for anyone to dislodge them?

[trickydicky1] 21/5/2020 07:13

A standard ELISA kit will have 96 wells (12x8). One in each row will be used for test control, so it would be reasonable to assume a kit can undertake 88 tests for a cost of $400.