Renovo Share Discussion Threads

[holly_dog] 02/6/2011 14:37

It's a fair point, have been scratching my head as to why sell when they have said 17p equivalent after all redundancy costs so even if no value for anything should be a floor.

Going to hold firm, think announcement imminent and volume is low so think just impatient folk selling up as markets rocky

[jebenn1] 02/6/2011 13:58

I'm out.
I know there is a lot of negativity around the share and hence private investors may be unwilling to get involved but surely if there really is no downside at all there would be more institutions/hedge funds buying which would shift the share up at least a few pence.
No need to re-hash the arguments for my benefit but I have had this kind of situation before where I thought "the market is being stupid here and the share price should be more" - and in the end, no, the market was taking into account something which I hadn't thought of or had evaluated wrongly.

Good luck to all you guys, especially those who've been in for many years like I was. I've won some and lost some but that will be the last time I put money into the biotech gambling game.
J

[holly_dog] 02/6/2011 12:44

graham - had a different take myself which was evidence the board is going to be cleared out and he has gone out to secure a new non-exec role, so announcement should be imminent.

But interesting slant. although in a way would not be maximising the value of the listed vehicle as one of the 3 pots Ferguson reckons we have value in.

A happy end to the misery would be good. Hoping the board have done some excellent negotiating and will take the market by surprise - as price indicates nothing good is suspected at present

[grahamg8] 02/6/2011 11:41

John Goddard has gone to Optos plc which could well be the candidate to take over Renovo. As a profitable medical devices company they could certainly make use of any tax losses. Effectively they would buy Renovo with its own money, delist, and sell on the IP rights at their leisure to make a tidy profit for their shareholders. We might even get a share for share offer as an alternative to cash which would leave them with a residual pot to use as working capital and avoid any external fund raising that might have otherwise been needed. A nice little earner if they can pull it off, and an end to our misery too.

[holly_dog] 01/6/2011 09:45

Nice..hope it comes off mate

[holly_dog] 31/5/2011 14:23

Won a chunky bet on barca 3-1 which has gone straight into this, should be a very interesting week, Ferguson said they will announce in the 'beginning of June' and consulation period finished tomorrow.

Would love outright clean takeover offer and can put this to bed

[hollerich1] 31/5/2011 12:03

hedger123- was just responding to smith99, 17p plus all the vaule they get from the asset sale, so we looking around 40p imo.

[holly_dog] 31/5/2011 08:53

There is value in the listed vehicle and in the IP, and potentially in deferred tax losses as a cash-like item.

Reckon all will be revealed this week as consultation period finishes from tomorrow

[hedger123] 31/5/2011 06:06

So 17p then Hollerich

[hollerich1] 30/5/2011 22:20

yes 17p without the other sale value.

[envirovision] 28/5/2011 09:31

Thanks, I thought is was a lot. Looks fully valued to me on a risk basis.

[holly_dog] 27/5/2011 16:51

Questions were poor, agreed. Tbh I think apart from anything else everyone has given up on the old dog, it has cost the city hundreds of millions

They need £1m to bring other products to completion according to Q&A so something like that could work, but probably simpler to just sell listed vehicle and cash as one-off.

And personally I think someone will just buy the whole IP as one transaction.

Hopefully put this to bed on Wednesday/Thursday of next week. If I were Ferguson I'd be desparate to move on and get out

[caradog] 27/5/2011 16:25

I thought the analysts should have asked some more searching questions E.g pravascar - only 1 out of 4 doses showed a statistically significant improvement and that was 12% reduction in width on histology. I.e a 1/8 reduction on looking through the microscope. No info about appearance which is the most important end point. So is it worth continuing the trial which will a. cost money, b. delay/complicate sale or merger of assets and c. could fail?

What are the prospects of selling Juvista when nobody has licensed it despite months of trying?

Why not distribute some cash to shareholders now in the form of a special dividend? Surely they don't need that much for the planned winding down?

[envirovision] 27/5/2011 14:40

so how much cash per share is there left now?

[holly_dog] 27/5/2011 10:34

I don't think they translate it perfectly but broadly gets the message across. Quote of the call
'In Manchester we're maintaining the clinical programs, where we think we have value, we've already sort of got the value in the other clinical programs.'

I think you could swap 'got' with 'destroyed'

-----------------------------------
Professor Mark Ferguson, Co-Founder and Chief Executive Officer:
Thank you very much and thank you to all of you who have joined us on this call. I'd like to give to begin with a very quick summary of our interim, and then obviously to take any questions and try to answer them as best I can.

So to begin with the pipeline, obviously during the period we reported the Juvista did not meet it's end point in the EU Phase III trial the first EU Phase III trial and we have ceased development of Juvista. Other players previously guided Class III medical device in the European union a drug the United States. The first trial for the reduction of -- is underway in the European Union and will report data in H2, 2011 and that's on schedule.
We've previously reported a positive Phase 2 efficacy trial for Prevascar and Prevascar is currently in a proof of concept clinical trial in African volunteers. These are within sessions under the arm. And today we report that they planned interim analysis of the data from this trial shows a statistically significant improvement in scar width and at one month post wounding. This was a planned interim analysis and the objective was to see whether or not we could get a lead at one month that would be predictive of the final outcome of 12 months.

So the trial continues to it's 12 month endpoint which is in H1 of 2012, when we will report data. But the positive interim data today are hopeful and that the drug may indeed show an improvement in scarring at 12 months, obviously we have to wait to see the final result. We have not reviled the dose that give the statical significant improvement deliberately, because the trail remained blinded and I do not know the dose, but I have informed in the way in which the interim analysis was done, that one dose was positive and indeed there was evidence of the dose response.

And, then finally Juvidex, which obviously had reported previously a positive trial for the acceleration of healing and which we had indicated that we were going to initially out-license as a cosmetic ingredient following the decision to restructure the company following the Juvista Phase III trial results we changed that licensing to a potential field and we are in discussions about the potential CEO of Juvidex.

Clearly with the failue of Juvista to meet it's primary or secondary endpoints you will know that Renovo immediately considered all of it's options under Board that entered a 90 day consultation period with the employees with a view to making most if not all of the staff redundant and obviously very significantly reducing cost. That consultation period draws to a close at the beginning of June. Legally I cannot therefore give you details of what is going to happen because we remain in the consultation period. However, as we have indicated in the interim results, should we make all of the staff redundant and should we greatly changed the size and nature of the Board, then when you take into account all of those for restructuring costs, we have estimated that we would have approximately 33 million in cash and equivalents of 30th June, 2011.
Clearly we have signaled that Adaprev and Prevascar will continue and under that plan, we would make appropriate arrangements using consultants and so on to make sure those trials were seen though to an appropriate endpoint.

So, I can't give you anymore detail at this stage. However, we will issue further guidance following the conclusion of the consultation period to investors as to what is happening. The cash positions, you see there in the interim results for cash consumed from operations during the half year was 7.5 million. And the net cash position including investments of the 31st of March was 44.4 million as reported in the results.

So, what I want to leave you with is a view that, it is a very clear message that the Board of Renovo have taken it's duties very seriously. They have very quickly following very surprising and disappointing results of Juvista Phase III trial reviewed all of the options, they have instigated measures to reduce costs and to conserve cash. And you see some of our plan going through and more guidance will be given when we end the consultation period. So at this point, I think it would be best for me to take any questions if there maybe?

Questions And Answers
Operator:
Thank you. [Operator Instructions] Our first question comes from the line of Sameer Devani from Nomura. Please go ahead with your question. Your line is now open.

Sameer Devani:
Good morning Mark, good morning David. And just a quick question on the estimated net cash post restructuring. Does that estimated 33 million include and the R&D tax, I think you achieved potentially quite a substantial R&D tax credit.

Professor Mark Ferguson, Co-Founder and Chief Executive Officer:
The R&D tax credit from the previous year was received in March that's clear out and because at the moment we have we don't have a tax loss this year. So we won't able to reclaim all tax credits.

Sameer Devani:
Okay. And then just in terms of the ongoing running cost if you achieve consultants complete the trial. Do you have any estimate of how much that would cost you to complete from near by change to complete the two trials.

Professor Mark Ferguson, Co-Founder and Chief Executive Officer:
Yes, that's its approximately 1 million for me.

Sameer Devani:
1 millions. Okay. That's great. Thanks very much.

Operator:
[Operator Instructions]. Anymore questions? Next question comes from the line of Robin Davidson from Edison Research. Please go ahead sir. Your line is now open.

Robin Davidson:
Thank you. Really I mean it's a difficult question perhaps you to answer, but what you have addressed in this presentation is really whether the company or it has been able to explore sort of M&A options to sort of which might benefit shareholders. I mean, can you give any comment on that at all?

Professor Mark Ferguson, Co-Founder and Chief Executive Officer:
Yes I can. So, basically as we previously had indicated the Board is considering all options to maximize shareholder value that includes M&A. And we have done that during the period and we will continue to do that. And I think rather then what you see here is excluding Renovo in prime position actually to be sold.

So what we are doing is we are reducing all of our expenditure in terms of staff, we're reducing our expenditure in terms of capital commitment to leases and so on. In Manchester we're maintaining the clinical programs, where we think we have value, we've already sort of got the value in the other clinical programs.

And so bluntly what is for sale, is sort of in three buckets, its the public listing, it's the cash and it's the programs and those all be sold together or they could be sold separately. And I think that's what is indicated here when we say that we seek purchasers. So that is a very active process and we're engaged in evaluating all kinds of opportunities as that could add value for shareholders.
Robin Davidson:
Okay, right. Thank you.
Operator:
[Operator Instructions]. As there are no further questions, I will return the conference to you.
Professor Mark Ferguson, Co-Founder and Chief Executive Officer:
Okay. So it just remains for me to thank you very much for joining us today. And we would hope to issue further guidance shortly after the consultation period has completed. Thank you very much

[holly_dog] 27/5/2011 10:00

Good question. I don't know the ins and outs of taxation at all. Also while I think theoretically it makes sense and not to say analysts don't get it wrong but because of how low we are adding another £5m is material so I wonder how it has not been mentioned - would love to see broker notes and if they attribute value to it but have changed job and no longer have access.

I have just been sent a transcript of the conf call so will post now. Only write up from papers yesterday was this in the Times

Traders running the numbers on the worst-case scenario for Renovo, off a ha'penny at 15p, calculated that the ailing biotechnology company still had cash equivalent to 17½p a share and drugs in trials worth perhaps a further 4p a share.

[caradog] 27/5/2011 09:24

Dosn't an acquiring company have to carry on the business of the target company to use the accumulated tax losses? So a profitabe biotech would be the ideal acquirer. Not a lot of them about!

[holly_dog] 27/5/2011 08:59

I've had a very quiet week hence frivolous posting.

Because he broke down the company into three key assets I think it might go as follows.

Any private company buys the listing and the cash
Biotech buys the IP

Would probably extract more value than a bio just buying whole company as they won't pay as much of a premium for listing

In terms of waiting not sure I see it, especially with Gartmore/Kestrel I would have thought they wouldn't want to wait a year for something that might perhaps add another little bit of value, would rather get it all done now. And once the public vehicle is sold will be difficult to transfer remaining value to shareholders, would result in some complex structuring.

For what it's worth I think we'll conclude this on Wednesday/Thursday which is after the 90 day period

[holly_dog] 26/5/2011 16:17

GS - have a listen to presentation from 2.35 which explains the consultation period and them planning to update straight after (he says 'beginning of June')