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Invesco has been a major problem for Puretech for a number of years now following internal rules changes in Invesco regarding holding very large holdings in individual companies.
Invesco held c 34% shareholding in Puretech over a year or so ago and has sold c 50 million shares over the past 18 months which paradoxically nearly equates to the amount of shares Puretech has bought back in the buyout and Tender.
This possibly negated the effect of the buybacks to some extent and Zohar confirmed as much in response to investors emails.
I think Invesco wants to get below 15% ( from current c17%) so not much more to sell imho.
Hopefully the share price can now push back up with just 240 million shares in issue and a pathetic market cap of just c£450m.
Hopefully!
The sales by invesco while subduing the price
May tempt a value driven offer
Or a cheap way for bms to limit the royalties
I think that's from the tender tbf, dated 25th June.
Mistake in hindsight so far to top up a few times after the tenner offer .
Down to 182p today
Another RNS at 5pm Invesco selling more of there huge holding .
Just had a look at the staff list seriously top heavy with directors senior execs vice this and vice that.Who is doing the research?
I would be in the deep mire if i sold now.So, crossing fingers re Karuna and LYT100 and 200 and seaport
SP of tender was 32% higher than today. Doesn’t mean any of the IIs or directors are sellers at these levels. I tendered more than I wanted to sell. Had inkling it would be oversubscribed after I saw Invesco TR1. Good riddance to Invesco I say. They have been an overhang since Neil Woodford blew up.
I’m the same as you Dallo. Great prospects but management are restraining it. I’m not far from moving on even though it’s stupidly cheap. It’s too unloved and the sheer number of tendered shares was a big surprise to me and really capped where I thought the potential was for Puretech.
Elenko the President of Puretech is also a Director of Karuna and also one of the founders of Puretech.
There has been a major management shake-up in Puretech recently with Zohar shafted and a new Chairman and CEO appointed and a shareholder " revolt" at the recent AGM about management pay and benefits which the company says it is taking on board.
The only consolation is that the US Nasdaq share price appears sanguine about the President and two Non Executive Directors selling in the Tender.
The whole company has got stale and influenced and managed by medics so hopefully some big players will have a crack at unlocking value via a takeover.
I am getting bored here and will give it another 2/3 months before throwing in the towel after 6 years.
ATB
I truly believe that’s the disconnect here… management are not in the habit of paying their common equity holders returns.
The market will decide but I’ve made my decision
Is this legal? I have my doubts.
So 3 Directors of the Company sold 750,000 shares between them, in full knowledge of how many they'd have to tender to sell the amount they'd want rid of. There's no way the Broker hadn't kept the Company informed on the level of acceptances prior to close. Utterly crooked.
Small shareholders are kept guessing as usual while Directors and key IIs twist and manipulate to line their own pockets.
What a crap company, and the Directors obviously think so too being that they were prepared to offload so many shares at only 250.
The final straw that would really rub salt into the wounds would be for them to use some of their ill-gotten gains to buy back a small proportion in the open market, drive the drive up to 250, and then sell them again. I wouldn't put anything past them.
Oh, and then another RNS to say they've awarded themselves some more. You couldn't make it up.
Thanks for that. I found the RNS but it doesn't really spell out what the milestones are to obtain the $400m, or over what time period. I'm guessing the FDA approval, if we call it that, in September could be one of them.
Presumably BMS will, at some point, get a handle on possible sales for KarXT, and could potentially buy put PRTC if paying those royalties doesn't make financial sense.
PeterM
The deal between Puretech and Royalty Pharma involves Royalty Pharma paying up to $500m for a share of Puretech's KarXT royalties payable by Bristol Meyers, of which $100m was paid in advance last year.
The deal is dependent on regulatory and commercial milestones being achieved with the key regulatory date being the formal approval by the US FDA of KarXT in September 2024 following which the drug will marketed and sold worldwide by BMS.
Royalty Pharma will receive 3% of KartX royalties up to $2billion revenues and 1% thereafter with Puretech getting 2% royalties on revenues over $2billion.
BMS is expecting revenues for KarXT of in excess of $5 billion so if achieved the royalties split will be as follows
Puretech
$400m from Royalty Pharma
2% of revenues in royalties over $2billion..at $5billion
that equates to 2% X $3billion =$60million per annum.
Royalty Pharma
3% royalties on 1st $2billion revenues and 1% thereafter..at $5billion revenues that equates to $90m per annum.
The Puretech royalties deal on KarXT is for 10 years if memory serves me well.
Puretech will also receive milestone payments and income sharing amounts in the future.
How Bristol Meyers is allowing these levels of royalties is beyond me..
It would be easier to buy Puretech now for say $800m and get rid the royalties, secure cash in Puretech and have Puretechs assets for next to zero.
I hope I have my sums correct .
How does the $400m from Royalty Pharma work? How is it paid, over what period? I re read the pitch deck yesterday (I tend to do this with a falling sp) and there is a huge amount of newsflash due this year.
And another today at 187p , did not fall further this time closed 188p.
They claim the low was 185.6 above.
JSB
Not to mention the $400m payments due from Royalty Pharma in respect of Puretech ceding certain of its Karuna royalties to Royalty Pharma.
Thanks for posting Lesley. Daphne or management won’t have much to say right now.
There is clearly some selling from a large holder who couldn’t sell down in the tender offer. Nearly 15% down in the week and 20% down in a month. At these times you have to refresh your investment case so here goes:
Post TO cash at £340 million ($429 million) which equates to £1.43 per share which is 77% of the current share price. I’ve seen other figures which are higher but they haven’t discounted the $32 million investment into Seaport and I’ve discounted another $12 million for 3 months cash burn.
The current EV sits at £106 million. For this you get the following:
100% LYT-100
100% Gallop Oncology
61% Seaport Therapeutics
36% Vedanta Biosciences
Karuna Therapeutics 2-3% royalties + milestones
£4.2 million from Alkili in Q3
Is that not old news?or is it after the offer
Just received a reply from DZ re tender.There was a lot of " could" release value in LYT 100 and 200,Karuna Seaport extra.Expressed her disappointment sp but thinks has long term potential.Thought it maybe due to Invesco.I would suggest people get in touch with her for all her thoughts
Topped up again 195p
Sensible thing now would be to begin a share buyback in the market but they won't BECAUSE it's sensible!!
I thought a reasonable bid price this year would be £3.50-£4. Given that 2/3rds were willing to sell at £2.50, that seems to me to be a price where a bid might first come in from which is ridiculous given the share price was at £2.38 less than four weeks ago.
I’ve scaled back my expectations on the back of the TO results as £2.50 would be a very small win for me and not what I had hoped for.
TO money should be dropping into accounts today for UK holders. Even if they have a 15% withholding tax to pay, they can buy shares 20p cheaper than the TO - Tax.
Peel Hunt has a 78 page note on Healthcare and Life Sciences out today with Puretech it's No 1 recommendation in the sector for what it worth.
Thanks to an ADVFN poster for spotting this.
Still cannot grasp the share price action .