ASX Shares 10 bagger

Discussion in 'Shares & Funds' started by kum yin lau, 5th Mar, 2019.

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  1. Piston_Broke

    Piston_Broke Well-Known Member

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    From what I can seee LRS has a lot more technical info in their reports and ADN is more concerned with putting out news.
    And LRS has double the amount of product, 100% owned and under soft soil.
    The LRS data is very easy to get. ADN no so much, their news is company brochures.
    And so my vote goes to LRS.

    Of course neither of us really know if any of it is true and the clay is crap instead.

    lrs.png

    Announcement
     
  2. wombat777

    wombat777 Well-Known Member

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    Have you looked at ADN's news the last 3 years?!

    The newsflow for ADN at the moment relates to their maturity on the path through development studies, mining application and financing.
     
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  3. wombat777

    wombat777 Well-Known Member

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    On the first question about the IND from early 2019, the strategy has completely changed. Fresh management has turned the company around. The trials program has been completely redesigned to generate the clinical data to demonstrate revenue potential to Big Pharma. That's what underpins the valuations that Big Pharma pay for buyout of Biotechs ( clinical trials and preclinical studies provide a basis for Big Pharma to do their own revenue projections ).

    RACE is in a unique position with a drug shown historically to be safe and effective. The problem is that it was in the hands of management from IPO in 2016 with a poorly thought and implemented strategy. That started to turn around in mid 2019 with Dr Tillett corner-stoning a placement as a private investor, then becoming a director and then setting about turning the company around ( his PhD is in Cancer Research and he owns a DNA sequencing firm.- software that he wrote ). A much more capable team now in place.

    The company has stated in presentations a plan to start marketing to Big Pharma from late 2021 ( I think from November ). The plan is to have enough data from clinical trials and preclinical activities to have IP and data they use in discussions.

    Screen Shot 2021-07-02 at 7.33.32 pm.png

    This is a key point. Bisantrene is already known to be safe and effective. It's been trialled in over 2,000 patients so safety is well known and they also know a bit about the cancers it works in ( although cancer treatment now has matured ). It was historically approved in France for Leukaemia. Have a think about what this means for clinical risk and probability of success ...

    In terms of drugs, Bisantrene's closest peer is probably Keytruda. Bisantrene is turning out to be the same sort of thing ... an inhibitor that blocks certain types of cancers.

    On buyout figures ...
    • that is the value historically of effective and safe cancer drugs with very large potential patient populations. That is what Big Pharma is willing to pay.
    • RACE's program of proof of concept trials in patient populations of around 30 patients is specifically designed to prove the value to Big Pharma. Efficacy already well established for Leukaemia and Breast Cancer. Cardiac safety also established. Recent findings from mid 2020 by independent researchers at City of Hope show massive potential in other cancers.
    • I personally think it will be tough to achieve USD $8B to $21B ( requires as many investors in RAC as possible to understand potential buyout value - if an opportunist Big Pharma acquired enough shares they could try a hostile takeover with attractive terms to try and woo shareholders for a buyout that is too cheap )
    A positive is that a lot of stock has been accumulated by long-term shareholders due to the significant change in strategy and progress. They understand the path that the company is on.

    People with 100,001 shares or more hold 63% of all shares.
    People with 10,001 to 100,000 shares hold 26% of all shares.
    People with 1,001 to 5,000 shares hold 4.9% of shares.
    (and so on but see charts below for breakdown)

    Screen Shot 2021-07-02 at 7.06.54 pm.png

    Screen Shot 2021-07-02 at 7.13.12 pm.png

    The share price has done this because the company is delivering on strategy ...

    23 months of uptrend. I am expecting the share price to soon do what it has done on the previous 3 runs circled. I think this will move the share price to

    Screen Shot 2021-07-02 at 7.16.27 pm.png

    I think this will move the share price to somewhere in $12 to $27 ballpark by the end of the year.

    Screen Shot 2021-07-02 at 7.20.09 pm.png
     
  4. Mel Morgan

    Mel Morgan Sydney Property Manager Business Member

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    omg you want me to read 70 pages of charts?! :eek: give me a feasibility study any day!
     
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  5. Piston_Broke

    Piston_Broke Well-Known Member

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    That's one of the reasons I bought LRS.
    They are still earlier in the process, less downside more upside and hopefully they can execute better.
     
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  6. David_SYD

    David_SYD Well-Known Member

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    Thanks Wombat.

    There’s 143m shares on issue. Seems pretty tightly held as you say. There’s 143k on offer up to $4, representing a fraction of a %.

    Just looking, high level, at the financials.

    Net profit is -$4m but as you’ve pointed out, RAC does not exist to make money or generate revenue.

    The clinical trials look expensive. I can’t see how much cash they have in the bank? I’m assuming RAC (obviously) do not have the capital to sustain the cost of the trials, hence targeting early big Pharma intervention. Does this weaken a company’s bargaining power? I.e. could big pharma force the company to become starved of cash and therefore they’d need to keep cap raising, thus diluting the stock or accept a lesser buy out price?

    I’ve never seen a buy out take place so not sure on the mechanisms.
     
  7. wombat777

    wombat777 Well-Known Member

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    Generally starts with data from preclinicals and trials that attract interest. Synthorx transaction is a good example as I have put together a timeline.

    Screen Shot 2021-07-02 at 8.34.51 pm.png

    1. https://www.sanofi.com/en/media-room/press-releases/2019/2019-12-09-07-00-00
    2.
    https://www.fiercepharma.com/pharma/sanofi-beat-out-three-suitors-its-pricey-2-5b-buyout-biotech-synthorx
    3.
    https://www.jefferies.com/CMSFiles/Jefferies.com/files/Synthorx%20v2.pdf
    4.
    https://www.fiercebiotech.com/biotech/aacr-sanofi-s-engineered-il-2-clears-safety-hurdles-early-phase-1-data

    RAC have ~ 7M unlisted loyalty options held by shareholders with strike price $4.50 that expire 16 May 2022 that will bring in about $30M in cash.

    @David_SYD - just edited the above as I had to switch from my phone to my laptop to add the timeline.
     
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  8. Baker

    Baker Well-Known Member

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  9. wombat777

    wombat777 Well-Known Member

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    I should have mentioned that RAC in May raised $5.4M to sit alongside their existing cash balance around $6M. They should end up with around $10 to $11M at end of June quarter.

    Due to the $30M of options conversions to come we could be in the fortunate situation that a buyout completes or partnership occurs before they need to do another raise.
     
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  10. David_SYD

    David_SYD Well-Known Member

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    Thanks Wombat. It’s RAC or more PTX for me. Need to do more research on RAC.
     
  11. wombat777

    wombat777 Well-Known Member

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    Biotechs should be evaluated from the following perspectives:
    • Is the drug safe and effective?
    • What is the revenue potential ( if you can’t answer that what is the size of the market they are tackling ) ?
    • What is the clinical risk and what are management doing to minimise it?
    • What is the commercialisation strategy and how long to achieve a value inflection point? ( this will help determine dilution and risk )
     
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  12. rizzle

    rizzle Well-Known Member

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    How does an existing shareholder opt to participate in the ADN SPP?

    I'm not familiar with the process.
     
  13. wombat777

    wombat777 Well-Known Member

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    SPP prospectus needs to be issued first - at this point application forms should be made available ( either mailed out or may also be available electronically via the share registry - which is computershare ).

    You fill out a form and then make your payment by electronic funds transfer (or possibly BPAY). There may be a scale back if there are more applications than available shares in the SPP ( you would then receive a refund for the difference ). They will be filling requests on a first in the queue basis - so don't delay in making your application ( if that is what you decided to do ).

    Screen Shot 2021-07-05 at 2.59.45 pm.png
     
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  14. Drifty

    Drifty Well-Known Member

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    ..or, save yourself the paperwork and buy on market.. 0.155c currently..
     
  15. Drifty

    Drifty Well-Known Member

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    *Now .15c..

    Not terribly impressed at how this was managed. SP will likely take a long time to recover back to the > .20c days..
     
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  16. Mick Butterfield

    Mick Butterfield Well-Known Member

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    Just got my RAC order filled. Very happy and ready for the ride.
     
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  17. Codie

    Codie Well-Known Member

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    Welcome to the never ending world of research and learning, biotechs & cancer take up a lot of time.
     
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  18. Mick Butterfield

    Mick Butterfield Well-Known Member

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    Haha. It seems that way of late. So much to learn but it is a company i feel good on many levels investing in.
     
  19. Tofubiscuit

    Tofubiscuit Well-Known Member

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    Agreed.

    Questions is, would you still buy more at $0.15?
     
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  20. David_SYD

    David_SYD Well-Known Member

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    Surely everyone is loving the PTX movements?

    I admit I was too hesitant but didn’t feel confident enough to take the plunge when I started the other thread at $0.10.
     
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