What did you guys think of the #Novacyt segment with Vadim & Justin today on Vox?

Thinking @SharePickers narrative needs to expand to the Mediscience Award winning company's opportunity, not just their windfall.

3 Questions at end for Justin

Novacyt is a diagnostics company with an existing infrastructure that mimics true mid cap companies like Qiagen (sorry Vadim, we love you but Novacyt isn't mid cap, and Mullis hasn't achieved that yet).

@PrimerdesignLtd have strong R&D capability for continual organic growth

They have working partnerships with health bodies, universities and other life science companies, private and public.

They have a multi-varied existing test portfolio - over 550+ tests. And they have an experienced board with success in previous enterprises.

Visually their structure would sit nicely on top of big multi-billion mid cap diagnostics players, all except the direct sales teams around the world.

That's jus a matter of scaling out now however.

So if we can agree that this structure is there - then they can't actually be compared to any other testing stock in the UK's 'covid testing stocks', which Vadim and Justin frequently discuss.

In fact it's this structure that allowed Novacyt to generate these revenues.

This is the key bit.

The reason Novacyt has pulled in these revenues is because they had this existing infrastructure. They were able to R&D at speed, not just one product, but non-stop in 2020

And actually get those products to market fast, approved and generating revenues from launch day.

It's obvious now that Novacyt has re-invested and has developed out further that infrastructure, even acquiring IT-IS an actual device manufacturer (new device coming too)

So what's the point?

Well the point is that Novacyt has a highly effective infrastructure, one that surpasses their pre-covid position significantly now.

Which means they can use it to generate revenues in all kinds of testing markets.

Covid market globally: $23.67 Billion By 2027 (CAGR 3.1%)*

In Vitro Diagnostics globally: $85.23 billion by 2027 (CAGR 5%)**

*Polaris Market Research
**Precedence Research

Both covid testing and all other diagnostics are growing fast, yet even without covid the revenues for organic growth are staggering. It's an area that's lacked national infrastructural investment to date globally (hence the cluster duck that allowed the pandemic to happen).

The market has been focused on generating therapeutics for infectious diseases rather than preventing them from spreading. That's changing - we've covered the WEF Global Risks meeting in Jan. We know what they're thinking on priorities - and infectious disease is top of the pile

So I have 3 questions and this is what I think Vadim and @SharePickers could discuss in depth at their next podcast (which I enjoy, very lively) but some of us think they're just scratching the same surface repeatedly now.

1 - Novacyt has a proven infrastructure. Why would you think they won't or can't use it to generate increasingly growing non-covid revenues long term?

If the market is speculative and demands growth, then surely it's irrational to think otherwise.

2 - The covid warchest should be considered interest-free investment capital. Why does that not make their long term prospects even more speculatively appealing compared to a debt-laden stock?

3 - Novacyt now valued on cash, hence low market cap v revenues. If Novacyt reveals either a revenue generating M&A or non-covid test line worth say £50 to £100 million PA with double digit growth attached (normal for diagnostics)..

Then what PE ratio & Mcap would it have?

The answer to that from looking around diagnostics companies making those revenues would give Novacyt a much greater mcap and much greater SP than the £8 to £12 range we're in now.

If the market is speculative, I'd say it's not every good at speculating on Novacyt and will get caught out, as it has been continually by companies with excellent infrastructure and talented teams.