Thread by @TaylorQuant

So that's it. We can all move on now from the DHSC albatross around Novacyt's neck.

People selling off, shorts and MMs sticking the knife in.

But after that settles, we've actually got some good material in this RNS.

#NCYT #ALNOV #NVYTF

We have multiple COVID-19 LFTs coming.

Now confirmed by RNS so we will have a complete revenue stream for COVID-19 that only large caps like Roche have managed to output.

We actually will have a wider range than some large caps ie. Thermo & Perkin Elmer.

Very impressive.

We've done £30 to £40mill in Q1 2021 from private testing sales and have yet to launch several new products, including LFTs which are currently en-vogue.

Novacyt's team is expanding and pushing into new territories so 2021 revenues without DHSC are still mid cap level.

Mullis is expecting new contract wins.

He's always cautious, but they've put it in the RNS and with the new LFT range and and SNPsig, WinterPlex, PROmate etc, I think it's pretty likely we'll see these wins over coming months.

PROmate has been a success.

Although DHSC may have enough supply for the year, it's clear the validations and continued rollout put direct to PCR tech up there with the best rapid-PCR technology on the market.

That means we have a new USP to take internationally and will be appealing to potential acquirers. Multiplex PCR, especially streamlined workflow PCR is hot right now (see Hologic's acquisition from last night).

So where does that leave us.

Well this is the start of a new beginning for Novacyt as a diagnostics company going out there and generating sales and continual R&D with the incomes.

DHSC revenues were a nice boost in 2020 and even in Q1. We still may see new LFT deals with them.

And things can change. I doubt this is the end of Novacyt's work with the NHS. They were an existing supplier pre-pandemic and done excellent work with them during the pandemic.

One contractual dispute in a fast changing context isn't the end of all the working relationships.

But it is disappointing.

So, can and will Novacyt go on to make £100 million + a year and grow Year on Year?

I think yes they definitely will. And sometimes they'll see windfalls as new tech breaks into new market segments, leapfrogging revenue growth in spurts.

This is still all mid cap numbers.

Keep it all in context and keep a sense of proportion. All the market needs next is visibility on future potential revenue growth.

Sentiment is appalling now, no doubt about it.

But this just makes Novacyt's investment case stronger. It's even more undervalued, even on cash, more than ever.

Diagnostics companies have 10x to 30x PE ratios as standard.

And Novacyt will get there once they update the long term strategy and get some visibility on orders.

For me at least, not much has change. Minor disillusion with DHSCs handling of an incredible team at @NovacytGroup who has worked tirelessly this pandemic.

But differences can be resolved and Novacyt is still the star of the pandemic. They R&D quality tech, at speed, and get the products to market.

I can't see that changing. Their future is just as bright as ever.

We're all still waiting for the transition from

'Covid testing stock' to 'diagnostics company'.

DHSC extension wouldn't have changed that. It's that switch in sentiment through a strategy update that makes that change and puts Novacyt in mid cap territory.

Mullis and the board knows this.

That's why he put half a million of his own money in.

And thats why I'm still in too.

Definitely a night for a few beers, but as for PrimerDesign and the Novacyt board - they've been nothing but standout performers.

(Personally I'm glad this DHSC nonsense is behind us, been a real pain in the rear for investors and must have been a massive hassle in Nova HQ too).

Good luck guys, give it a week or two to settle. Shorts and all sorts will be putting the knife in, it'll bounce.