Thread by @MylesMcNulty

Quick recap on @avacta #AVCT's #COVID19 LFT.

By the end of next week, the Co intends to have put out a comprehensive TU.

Critically, it will include the sensitivity / specificity of its #COVID19 LFT for the first time. Analytical data collected so far suggests that it'll...1/14

...be the most accurate LFT in the world. However, it is not a given that analytical data will be replicated in the clinical data. Likely, but not definite.

Let's assume it IS replicated. #AVCT will CE Mark its LFT next month, and immediately begin selling it.

2/14

@avacta #AVCT does not have its own manufacturing capacity (yet). It will be contracting manufacturers to make its test.

It's lined up @Abingdon_Health #ABDX, @bbi_solutions and @mologic / GAD, and is working with @OmegaDiagnostic #ODX too (although not publicly announced). 3/14

Moreover, #AVCT is in talks with other manufacturers across the globe to increase capacity further.

As reagent owner (the most valuable component of the LFT) and soon-to-be holder of the CE Mark, #AVCT will be test owner and thus will (IMO) likely enjoy the lion's share... 4/14

...of profits on its LFTs sold.

In #AVCT's TU in the next 9 sessions, I think it likely that we will also hear about the lay-user study. Once completed, this will enable it to sell to retail, i.e. into the home. The market for this will last many YEARS, I think.

5/14

However, because at-home #COVID19 LFTs are not available yet (at least within the UK), I feel that many do not appreciate just how enormous this market will be. The idea is that most households will have boxes of these LFTs in their bathrooms / medicine cabinets.

#AVCT's... 6/14

... technology, Affimers (#AVCT holds global patent protection on their usage in Diagnostics products), are - in layman's terms - enhanced antibodies. It is plausible that no other tech will be able to compete.

As such, @avacta has a good chance of launching the most... 7/14

...accurate LFT in the world next month - which is encircled by a very wide, very deep moat (patent expires in the 2030s!). I cover the advantages of Affimers over other technologies such as monoclonal antibodies and Aptamers in detail here: 8/14

aimchaos.files.wordpress.com/2020/10/avacta…

How big is this market, globally?

Not a clue - but likely to be in the hundreds of billions of dollars for at least the next 2 years.

If the test performs in a clinical setting as expected, #AVCT's share of this market will be constrained only by how quickly it takes... 9/14

...#AVCT to sign up further manufacturing partners.

Consider the probability of the analytical data being replicated in in the clinical data soon to be published.

Now consider that a successful test would be THE leading product in this new $100bn+ pa market.

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#AVCT's mkt cap: £375m.

The risk / reward simply does not stack up at present. For me, following conversations with industry insiders and other research, the chance of replicating the analytical performance in a clinical setting is MUCH higher than 50%.

And the upside... 11/14

...for #AVCT's SP in the even of a successful LFT is MANY multiples of 100%.

The R/R is just wrong, in my view.

Of course, this does not account for #AVCT's other interests, both in the Diagnostics div and the Therapeutics div.

Why the undervaluation? Besides a lack... 12/14

...of understanding by many market participants of the size of the global market for at-home LFTs soon to materialise, I think #AVCT is being punished due to delays in product development, along with some questionable recent business decisions.

All water under the bridge, 13/14

...if the clinical data that is due before the end of next week is as we all hope it will be!

I remain as optimistic as ever.

The cashflows that the LFT will deliver will prove transformational for #AVCT's Therapeutic division too. And the potential there is even greater. 14/14