Biocartis forum geopend

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natje 1966
0
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brightlight
0
quote:

Flatlander schreef op 31 januari 2020 19:05:


[...]


I still believe that the timing of several of the large hedge fund short positions (Citadel etc.) initiated in May 2019 (about the same time as the announcement of the Convertible offering) still suggests a convertible arbitrage strategy. Does anyone have a list of the larger purchasers of the convertible?
Voleon's recent short position looks a little fishy relative to the timing of the CFO resignation. I wonder if they caught wind of his departure in advance.

BL - I realize that you did not think that convertible arbitrage was the case based on the conversion price etc. However, much of the rationale for the initial position may have been to balance the risk of being long through the convertible by creating a delta neutral position rather than seeking out an immediate return on the short position. Given the September news and then the January CFO news, no one can argue that hedging the long exposure was a bad idea. Here is a description of "Convertible Arbitrage".
FL

Convertible Arbitrage
Convertibles are hybrid securities that combine a straight bond with an equity option. A convertible arbitrage hedge fund is typically long on convertible bonds and short on a proportion of the shares into which they convert. Managers try to maintain a delta-neutral position, in which the bond and stock positions offset each other as the market fluctuates. To preserve delta-neutrality, traders must increase their hedge, or sell more shares short if the price goes up and buy shares back to reduce the hedge if the price goes down. This forces them to buy low and sell high.

Convertible arbitrage thrives on volatility. The more the shares bounce around, the more opportunities arise to adjust the delta-neutral hedge and book trading profits. Funds thrive when volatility is high or declining, but struggle when volatility spikes—as it always does in times of market stress. Convertible arbitrage faces event risk as well. If an issuer becomes a takeover target, the conversion premium collapses before the manager can adjust the hedge, resulting in a significant loss.

FL,
I agree that the initial short positions may have had a negative impact on the share price around the time of issuance of the bond. If those short positions were still open (which they probably aren't because short positions were close to zero in November) they could still impact the share price, but only positively (through the closing of the positions). Concerning the delta neutrality strategy (as I understand it) that only leads to increasing and decreasing short positions if the share price were to bounce up and down in the vicinity of or above the conversion price (not way below, as is the case now). Then I can see short positions being increased or decreased as described in the strategy: "To preserve delta-neutrality, traders must increase their hedge, or sell more shares short if the price goes up and buy shares back to reduce the hedge if the price goes down." That should have a dampening effect on the share price, not causing a drop. What is going on here, in my opinion, is shorters toying with retail investor's fears. It is a good bet that doubt will creep into retail investors' mind after a while in the absence of news and in the absence of regular and proper analyst guidance. We see that all the time, especially in smaller stocks. Ontex is another such example. Biocartis even unexpectedly played into their hands with the poorly timed CFO exit. However shorters are not any smarter than regular investors and their strategy can backfire big time at any moment. Tesla was the most shorted stock until recently, look what happened there!
BL
brightlight
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FL,
What I see happening in Bcart at this moment is a complete mirror image of what happened at Acacia Pharma a couple of weeks and months ago: panic all around, ... until the good news came out. Check out the recent share price action. I entered the stock in the midst of the panic and benefited greatly. This comes to show that sticking to your own beliefs after doing your own research gives you a huge advantage.
BL
brightlight
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FL,
concerning your remark about 510K, from yesterday, I would like to point out there was a study published on the internet investigating the duration of the FDA approval process after the submission. It was a study from a couple of years ago (don't have the link anymore, but you should be able to find it). They talked about 6 months on average for a decision to get taken. In preparation of the submission, there apparently is a huge amount of back and forth (consultation) between FDA and the applicant drug company. This explains why it takes rather longer for the submission to be done.
BL
DRTVR
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Ik vind dat de moderator hier sneller had moeten ingrijpen, ik zie panikerende mensen die vragen of ze moeten verkopen of niet, ik vind niet dat hier spelletjes moeten gespeeld worden of hoort er dat bij, ik heb interessante zaken gelezen tot er hier paniekzaaiers kwamen, ik reageer daar niet op en het beste zou geweest zijn dat iedereen niet zou gereageerd hebben, ik hoop dat er nog enkel interessante en relevante posts worden gedaan, fijne avond.
natje 1966
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[Modbreak IEX: Gelieve inhoudelijk te reageren, een aantal berichten is bij dezen verwijderd. Waarschuwing.]
Flatlander
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BL

I do a fair amount of regulatory work so I understand the need for give and take with the regulators to get their questions answered. Former Administrator Gotleib really wanted to streamline the process. But he resigned before completing the overhaul. I think that labs running NGS assays have a quicker pathway to approval under the CLIA program since there are guidelines for this process. Approval of a novel IVD system is much tougher since the assay will be run at thousands of remote locations. I think the advantages of increased consistency and reduced failure rate should be huge deciding factors. Combined with the head to head comparisons of assay results to other technologies and the approval would seem to be a no brainer for approval.

FL
Flatlander
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Illumina came out with results (see quote below). The miniSeq segment underperformed. This product addresses the lower throughput smaller labs, hospitals and clinic that I believe to be the market niche that Idylla is well suited for. I hope we are right, and this product proves to be too expensive to gain traction.

From Zacks announcement
"Illumina continues to witness robust performance across a broad range of sequencing applications, especially in the sequencing consumables segment. The expansion in the company’s capabilities, resulting from partnerships with QIAGEN and Adaptive Biotechnologies regarding IVD test kits, buoys optimism.

On the flip side, a year-over-year decline in research and development costs, and lower system revenues in the low throughput category, resulting from a weak performance by MiniSeq, were headwinds."

FL
Flatlander
0
quote:

brightlight schreef op 31 januari 2020 20:52:


[...]
FL,
I agree that the initial short positions may have had a negative impact on the share price around the time of issuance of the bond. If those short positions were still open (which they probably aren't because short positions were close to zero in November) they could still impact the share price, but only positively (through the closing of the positions). Concerning the delta neutrality strategy (as I understand it) that only leads to increasing and decreasing short positions if the share price were to bounce up and down in the vicinity of or above the conversion price (not way below, as is the case now). Then I can see short positions being increased or decreased as described in the strategy: "To preserve delta-neutrality, traders must increase their hedge, or sell more shares short if the price goes up and buy shares back to reduce the hedge if the price goes down." That should have a dampening effect on the share price, not causing a drop. What is going on here, in my opinion, is shorters toying with retail investor's fears. It is a good bet that doubt will creep into retail investors' mind after a while in the absence of news and in the absence of regular and proper analyst guidance. We see that all the time, especially in smaller stocks. Ontex is another such example. Biocartis even unexpectedly played into their hands with the poorly timed CFO exit. However shorters are not any smarter than regular investors and their strategy can backfire big time at any moment. Tesla was the most shorted stock until recently, look what happened there!



With the exception of the Nov update, the Citadel short position has been pretty stable (based on the graph for the past few months). It looks like their algorithm sold off briefly in November but then re-established the position. My point is I believe the short positions are a risk mitigation tool to offset the long position via the convertible. I think this differs extensively compared to a speculative naked short position. If you are borrowing shares to run a naked short you better be doing a lot of research since the theoretical loss is unlimited. I don't think the BCART short is the same. The Hedge Fund running a convertible arb strategy determines a position sizing to offset or hedge the long position and then let the computers trade to up-size or reduce the position size to maintain the desired hedge level. It is interesting how quick their computers respond to news and cover shorts. I have heard that their software screen conference calls to act (buy or sell shares) based on key words in a fraction of a second.

Given the downturn we've had, there is probably a desire on the part of some to try to jump in and out depending on the news. The speed of the hedge fund reaction could make it very difficult for an individual investor to react and re-purchase shares after major news. As you have pointed out, the news flow is the recipe for the volatility the HF seek out.

Have a good weekend!
FL
Hans90
0
Hi Flatlander,

I see you often refer to Cepheid as a succes story for MDx. I had a quick look at their early days and do see some differences with Biocartis:
- Cepheid was able to grow from 5 to 85 M$ in 6 years (2000-2005), Biocartis is currently on a slower growth trajectory
- Cepheid made an average loss of 15 M$/year (2000-2005), the average loss for Biocartis is around 50 M$/year, hence Biocartis needs more cash to grow
- Cepheid had a gross margin of 40-50% when they hit 20 M$ revenue and was able to sustain this margin, gross margin for Biocartis is currently below 20%, I see this as one of the biggest risks as it is a strong contributer to the high cash burn, I'm reluctant to belief that the new production line alone will get gross margin above 40%
- Cepheid had a major revenue growth from 18 M$ in 2003 to 53 M$ in 2004, do you know the underlying reason, something similar in the pipeline for Biocartis? I'm again a bit reluctant to belief that FDA approval alone will result in this type of stepchange for Biocartis, any thoughts on quantifying the impact of FDA approval?

I strongly belief in the MDx market and see the added value of Biocartis. I'm however still a bit skeptical about their ability to lower cash burn significantly in 2020-2021.
natje 1966
0
Ik zie je vaak verwijzen naar Cepheid als een succesverhaal voor MDx. Ik had een snelle blik op hun begindagen en zie wel enkele verschillen met Biocartis:
- Cepheid was in staat om te groeien 5-85 M $ in 6 jaar (2000-2005), Biocartis is op dit moment op een tragere groei traject
- Cepheid maakte een gemiddeld verlies van 15 M $ / jaar (2000-2005), het gemiddelde verlies voor Biocartis is ongeveer 50 M $ / jaar, vandaar Biocartis moet meer geld om te groeien
- Cepheid had een brutomarge van 40-50% wanneer ze op 20 M $ inkomsten en was in staat om deze marge te ondersteunen, de bruto marge voor Biocartis is op dit moment minder dan 20%, dit zie ik als een van de grootste risico's als het is een sterke contributer aan de hoge cash burn, ik ben terughoudend om te geloven dat de nieuwe productielijn zal alleen bruto marge krijgen meer dan 40%
- Cepheid had een grote omzetgroei van 18 M $ in 2003-53 M $ in 2004, weet je dat de onderliggende reden, iets dergelijks in de pijplijn voor Biocartis? Ik ben weer een beetje terughoudend om te geloven dat een FDA-goedkeuring alleen zal resulteren in dit soort stepchange voor Biocartis, alle gedachten op het kwantificeren van de gevolgen van de goedkeuring door de FDA?

Ik sterk geloof in de MDX markt en zie de toegevoegde waarde van Biocartis. Ik ben echter nog steeds een beetje sceptisch over hun vermogen om kasstromen te verlagen aanzienlijk branden in 2020-2021.
nog maar eens een bewijs dat he zeker niet van een leien dakje loopt en zal lopen in 2020 -2021
natje 1966
0
min punten
cfo dat is vertrokken
onkosten gaan heel groot worden
concurrentie is bijzonder groot
plus punten
?????
brightlight
1
quote:

Hans90 schreef op 1 februari 2020 09:37:


Hi Flatlander,

I see you often refer to Cepheid as a succes story for MDx. I had a quick look at their early days and do see some differences with Biocartis:
- Cepheid was able to grow from 5 to 85 M$ in 6 years (2000-2005), Biocartis is currently on a slower growth trajectory
- Cepheid made an average loss of 15 M$/year (2000-2005), the average loss for Biocartis is around 50 M$/year, hence Biocartis needs more cash to grow
- Cepheid had a gross margin of 40-50% when they hit 20 M$ revenue and was able to sustain this margin, gross margin for Biocartis is currently below 20%, I see this as one of the biggest risks as it is a strong contributer to the high cash burn, I'm reluctant to belief that the new production line alone will get gross margin above 40%
- Cepheid had a major revenue growth from 18 M$ in 2003 to 53 M$ in 2004, do you know the underlying reason, something similar in the pipeline for Biocartis? I'm again a bit reluctant to belief that FDA approval alone will result in this type of stepchange for Biocartis, any thoughts on quantifying the impact of FDA approval?

I strongly belief in the MDx market and see the added value of Biocartis. I'm however still a bit skeptical about their ability to lower cash burn significantly in 2020-2021.

Hans90,
let me address your points one by one:

Concerning revenue growth:
Revenue at Biocartis is expected to grow in 6 years from 12M Euro (2016) to 174M Euro (2022), so 14 times 2016 revenue (Cepheid came in at 17 times, so not that much difference).

Concerning the loss making:
1. It is useless to compare loss figures of companies in different stages of their development. Cepheid’s growth acceleration has already happened, Bcart’s still has to begin.
2. You shouldn’t compare absolute loss figures, but relative loss figures.
3. Every company is different in the way they approach their business model. One company may have better metrics than the other concerning certain aspects of their business model, That does not mean they can’t both be successful and be fabulous growth stories in their own way. But as I said in point 1, Bcart and Cepheid are at a different stage of their development so it is pointless to compare the two at this moment in time.

Concerning gross margins:
Hans, you really should read the posts that are out there. I already pointed out that your gross margin figures are wrong. Flatlander did so too. Here are the correct figures: 2019: 43.96%est; 2018:44.81%; 2017: 58.62%; 2016: 52.88%; So they are perfectly in line with the Cepheid margins.

Concerning the growth drivers for the foreseeable future:
Growth drivers for Bcart are: Entry in the Japanese and Chinese markets; Full approval for the U.S. market; Continued growth in Europe and the rest of the world; 11 new tests in the pipeline; higher margins due to higher sales prices when more products are sold (supply demand balance shifting); more cost efficiencies due to better production line utilization. Probably Flatlander can add some more.

Concerning cash burn:
Nobody said cash burn would be lower in 2020-2021. Maybe it will, maybe it won’t. As I already said before, cash burn is an inherent part of investing in biotech. Bcart is no different. It is something you have to accept as a biotech investor. You get a better company in return (besides no new cash is needed in approximately the next two years, that really is a luxury as a biotech investor!). Amazon had the same business model (loss making from 1995 till 2002 and even some years after that). Nobody is complaining now after the stock went up roughly 20 times in 10 years. Sometimes you need a little bit of VISION as an investor. That is something which is distinctly missing on this forum.

It seems to me there is a concerted effort on this forum to bring the share price down. I don’t know who benefits, but frankly, I am getting a bit tired of having to address all the skepticism and correct the constant stream of misinformation. I think I'll just let the ignorance run its course.
BL
P.S. Nat, je mag dit vertalen.
DRTVR
0
Niet moe van worden, er zijn hier een aantal mensen die nood hebben aan info, ik laat in het midden wie gelijk heeft, maar lezen en vergelijken zal men toch wel kunnen, correcte info is belangrijk, bedankt allemaal.
DAFR
0
Ik kan mij alleen maar aansluiten bij DRTVR en de mensen bedanken op dit forum die inhoudelijk bijdragen tot een beter begrijpen van dit bedrijf en zijn toekomstpotentieel. Zelf ben ik nieuw in de beleggerswereld, en schat de info die mensen zoals FL, BL ... aanbrengen zeer naar waarde. In vergelijking tot andere fora die ik al eens volg (zonder actieve deelname) staat dit forum ver bovenaan m.b.t. inhoudelijke discussie en info. ... Inderdaad niet moe van worden en het "trolgezever" eenvoudigweg negeren en misschien zelfs de grappige (of trieste) kant ervan inzien.
Stockbrood
0
More valid for stock like BCART, than for other stock, W. BUFFET said, 'if you are not willing to own a stock for 10 years, don't even think about owning it for 10 minutes.

Remember that!

@BL, FL... Don't let these few 'people' keep you away from sharing the valuable information you have been giving us in the past.
The fact that they are polluting this forum only shows their fear about the BCART potential.

Keep up the spirit :)
Reply
0
quote:

brightlight schreef op 1 februari 2020 16:32:


[...]
Hans90,
let me address your points one by one:

Concerning revenue growth:
Revenue at Biocartis is expected to grow in 6 years from 12M Euro (2016) to 174M Euro (2022), so 14 times 2016 revenue (Cepheid came in at 17 times, so not that much difference).

Concerning the loss making:
1. It is useless to compare loss figures of companies in different stages of their development. Cepheid’s growth acceleration has already happened, Bcart’s still has to begin.
2. You shouldn’t compare absolute loss figures, but relative loss figures.
3. Every company is different in the way they approach their business model. One company may have better metrics than the other concerning certain aspects of their business model, That does not mean they can’t both be successful and be fabulous growth stories in their own way. But as I said in point 1, Bcart and Cepheid are at a different stage of their development so it is pointless to compare the two at this moment in time.

Concerning gross margins:
Hans, you really should read the posts that are out there. I already pointed out that your gross margin figures are wrong. Flatlander did so too. Here are the correct figures: 2019: 43.96%est; 2018:44.81%; 2017: 58.62%; 2016: 52.88%; So they are perfectly in line with the Cepheid margins.

Concerning the growth drivers for the foreseeable future:
Growth drivers for Bcart are: Entry in the Japanese and Chinese markets; Full approval for the U.S. market; Continued growth in Europe and the rest of the world; 11 new tests in the pipeline; higher margins due to higher sales prices when more products are sold (supply demand balance shifting); more cost efficiencies due to better production line utilization. Probably Flatlander can add some more.

Concerning cash burn:
Nobody said cash burn would be lower in 2020-2021. Maybe it will, maybe it won’t. As I already said before, cash burn is an inherent part of investing in biotech. Bcart is no different. It is something you have to accept as a biotech investor. You get a better company in return (besides no new cash is needed in approximately the next two years, that really is a luxury as a biotech investor!). Amazon had the same business model (loss making from 1995 till 2002 and even some years after that). Nobody is complaining now after the stock went up roughly 20 times in 10 years. Sometimes you need a little bit of VISION as an investor. That is something which is distinctly missing on this forum.

It seems to me there is a concerted effort on this forum to bring the share price down. I don’t know who benefits, but frankly, I am getting a bit tired of having to address all the skepticism and correct the constant stream of misinformation. I think I'll just let the ignorance run its course.
BL
P.S. Nat, je mag dit vertalen.



I have previously expressed my genuine concern about the sudden departure of the CFO. I would like to see the annual figures on 5 March confirm that these concerns are unfounded.

I have another concern regarding the admission to the Japanese and Chinese market while it is still unclear how large the impact of the corona virus will ultimately be and how long it will last. I cannot estimate whether and how long this virus crisis will affect the final admission for Biocartis to the Japanese and Chinese markets or whether it could cause further delays?

Cities and national borders are currently being closed without knowing how long this will take. No one can simply look the other way and say with certainty that this could not have an effect on business.

My goal is that Biocartis is doing well and not to cause unrest. In addition, I would like to take a realistic look at current events that take place both at Biocartis and in the world. I think this is also someone's duty as an investor.
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