Small Cap Value Report (Mon 15 Feb 2021) - ONC, EBQ

15th Feb '21 by Paul Scott

34 comments 11394 reads

Good morning, it's Jack & Paul here with the SCVR for Monday.

Jack's section

Oncoimmune Holdings (LON:ONC)

Share price: 177.08p (+2.65%)

Shares in issue: 63,662,446

Market cap: £112.7m

Oncimmune Holdings (LON:ONC) provides two main services in the biopharma space. It is 1) a developer of applied immunodiagnostics for the early detection of disease, and 2) involved in drug discovery and development.

Its ‘proprietary platform technology includes a substantial immunogenic protein library, over 200 patents granted and pending in 47 countries and over 150 peer-reviewed materials,’ apparently.

The group’s HQ is in Nottingham, and it also has a discovery research centre in Dortmund, Germany, as well as a partner representative office in Shanghai, China.

ONC is focused on improving cancer survival and has a diversified and growing revenue from its portfolio of diagnostic products. Meanwhile, its ImmunoINSIGHTS platform enables life-science organisations to optimise drug development and delivery.

Oncimmune's immunodiagnostic technology, EarlyCDT, ‘can detect and help identify cancer on average four years earlier than standard clinical diagnosis.’ This targets a vast market estimated to grow to £3.8bn by 2024.

Although revenue is growing, it is still tiny compared to the group’s market cap of £112.7m with just £509,000 of sales in FY20. So the market is already pricing in a lot of growth at these levels.

The group continues to burn through cash as well, having raised funds from equity in 2013, 2016, and 2018, as well as taking on debt in 2014, 2015, 2016, and 2020. So becoming self-funding is surely the first step with Oncoimmune and it’s possible that the events of the past year have brought this goal forward.

Interim results

Indeed, ONC opens with:

Substantial revenue growth achieved with increased commercial activity across the business...

Growing pipeline of ImmunoINSIGHTS contracts in negotiation with large pharmaceutical companies and biotechs.

But you have to scroll down a fair bit to get to the actual trading figures. Financial highlights include:

Revenue for the period was up sixfold to £1.83m (H1 2019: £0.31m).
Gross profit for the period was £1.41m (H1 2019: gross loss £0.05m).
Total administrative expenses were £2.88m (H1 2019: (Restated) £4.88m).
Research & Development costs were £0.62m (H1 2019: £1.01m)
Loss after tax was £2.60m (H1 2019: (Restated) £5.27m).
Investment in the ImmunoINSIGHTS business with additional equipment purchases and headcount to further increase capacity and remove possible operational bottlenecks.
Gross cash…

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welwichia

15th Feb '21

Hi Tamzin,

thanks very much for this! You mention Wed 17.2.21 above ... in the comment below the actual video it mentions: "4basebio (4BB) lists on AIM on 18th March 2021".

Do you know which one is correct - I have been unable to verify anywhere else so far.

Regards,

pobby

Here is the schedule for listing 4basebio £4BB with expected admission date of 17 February 2021.

https://www.investegate.co.uk/...

Chrisgsy

Much thanks for the above, which I hold. I also like CLIG as I am expecting further US$ weakness with the quantitative easing in the US. Normally such US$ weakness reflects into emerging market positive performance, which in turn should benefit CLIG's AUM and it fees generated thereof.

greenhat2

Interesting to see N Brown (LON:BWNG) N Brown having big Director buys (over £7m) over the last few days.

Results are out in a few weeks, so maybe it's a good sign?

This has been tipped as a turnaround by numerous high profile commentators including Andy Brough https://www.piworld.co.uk/2020... and Ben Hobson of Stockopedia https://www.stockopedia.com/co...

I'd be interested to hear what Paul thinks, given his excellent insights into companies in the rag trade.

Is it on your radar Paul?

Threepeat

herbie47

you make a good point. Very often and I am not sure why Stocko is slow to upgrade to include the full facts (see City Of London Investment (LON:CLIG) shares in issue). I asked them about Ig Group (LON:IGG) recently and got the "not yet" answer re their takeover of Tasty.

Perhaps Ed can put us in the picture with more colour about this

OldSchool05

I think that's a really good point Steve cups. City Of London Investment (LON:CLIG) merger with Karpus was completed on 1st October 2020 and resulted in the share count going from 26m to 50m. Yet the Stock Report is still showing 26m shares.

I assume that the Stock Report is only updated at the next balance sheet reporting date, in this case it will be showing through in the numbers tomorrow? Although the merger took place 4 1/2 months ago...

grout123

Nice chart- RSI looks a very credible indicator just on its own.

gwilli68

You need to look in the profile summary to see the bang up to date number of shares in issue. See screenshot...

Thanks Patrick,

I really like the historic transparency of the management team here. This is embodied by the following table, which is regularly updated and shows the impact of the merger. I would expect the dividend to keep growing in the future.

https://www.citlon.com/investor-relations/dividend-cover.php

Bear:

This is a stock which has really struggled to trade at multiples higher than 10 - 12 x earnings in the past and their forecasts are for quite low growth over the next few years (albeit under-promise / over-deliver?). At the link above it shows they are only predicting FUM to increase by 3.5% to June 2022 - not particularly exciting!

Their fee rate of funds under management has been slipping in recent years I believe and is currently reported at 74bp. Karpus integration may help to bring this higher in due course.

Rusty2

Not bang up to date, have a look a Tesco (LON:TSCO) shares are now only 7,731,707,820 not 9,793,496,572.

johnsmith68

I think if you link to articles, you should perhaps read them first. Ben's article was his pitch to the Stockopedia Staff Investment Club and was a balanced analysis in the standard format used for each pitch to the club (https://www.stockopedia.com/co...)

It wasn't a tip.

brads13

If you look back to 15 Jan 2021 you will see that Paul carried a balanced and detailed analysis

nathantrader

I am an existing holder I have not a yet received shares in the spin off I assume this will occur on the 17th, can anybody clarify if this is the case or any other pertinent information.

Hi Nathan - I am in the same position. I hold the parent shares with HL and have had no communication at all, hence was beginning to wonder ... especially given that Feb 17th is now imminent! Has anybody else had some communication from their broker?

Welwicha

I was expecting something on the 11th see below

The allotment of 4basebio UK Shares to eligible 4basebio AG shareholders by way of depositary credit is expected to take place on 11 February 2021. A corresponding allotment announcement will be published in the German Federal Gazette (Bundesanzeiger).

I sent an contacted to my Broker AJ bell on the 12th they had no further info, I followed up with an email this morning, maybe it will be the 17th.

Thanks Mr. Smith - yes, wrong use of words. Should have used 'referenced'.

One lives and learns. Thank you very much for pointing this out.

Will S

RE: Oncimmune Holdings (LON:ONC)

I work in the contract drug development area and I can think of at least 10 companies that have similar platforms for drug discovery and a similar number for diagnostics discovery. They are also up against the market leaders who are all tagretting oncology for organic / inorganic growth at the moment for drug discovery and diagnostics. While they might win some projects due to capacity constraints caused by the COVID project surge, that will pass and they'll be back competing against larger companies with bigger BD teams and integrated services.

UK_Investor_8888

UK_Investor has seen a surge today +2.7% over all.

What happened?

Central Asia Metals (LON:CAML) +5.96%
EVRAZ (LON:EVR) +3.2%
Centamin (LON:CEY) +1.93%

So a resources surge.

Plus500 (LON:PLUS) +2.52% - results at crack of Dawn, Wednesday
Apax Global Alpha (LON:APAX) +2.75%
International Personal Finance (LON:IPF) +1.68% - results in 9 days

Only loser

SCS (LON:SCS) -5.15% and was tempted to buy this, but the spread was 5%

I don't know anymore yet. Its nice when one can go out on one's bike for the afternoon, clock up 56KM, only one dangerous driving incident, not freeze any body appendages, sunshine, no injuries, nothing broken, no road rage, and come home to my home-made "quote-tron" saying its been a life-changing day.

(I'm not slacking... I am working the evening instead.)

hayashi22

Thanks for the post. It's always good to get information from those who work at the coalface so to speak. Any smaller end pharmas you would recommend.? It's so hard for non-specialists to gain any sort of edge here. A good example today is Scancell Holdings (LON:SCLP)..Scancell. where there seem to be differing views as to the merits of its vaccines.

55555

I was tempted with SCS too but wasn't impressed with the new boss at Mellow. He didn't strike me as a dynamic person who will really drive the business forward; much more a safe boring pair of hands to keep going as is until his retirement. Boring.

Small Cap Value Report (Mon 15 Feb 2021) - ONC, EBQ

Jack's section

Oncoimmune Holdings (LON:ONC)

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Paul Scott

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