Hi dolcevita, I understand that you are coming from the right place and want people to avoid losing their money. To that end, we are both on the same side. But I find it hard to see how a general statement that "the stock is speculative" or "people pump and dump" helps people make an informed decision. Usually how I approach problems is that I narrow them down to specifics. Then it is easier to ask the question on whether and how this specific issue can be resolved. There are always people that will come to you with problems, it's the people that come with solutions that I pay attention to.
So with people investing in ADO, I am hoping that people can use the links I have provided, read the materials and come to their own conclusion. It will be a baseline to save them time and they can carry on with their research from there. At the outset, I will say that I do have experience advising big US and EU pharma in regulatory framework and entering new markets, but not extensive. I specialize more in M&A and working with start-ups and funds on CRs, but it's been only a decade. So I may have some advantage, but for most things I still need to continue to do research and more reading, also because I do not operate in the relevant jurisdictions. And I need to reiterate that I do not vet or proofread my posts here (enough of it at work), I am doing this for fun of sharing, so please please do your own research.
Is this stock speculative? It's true that the company does not have pass experience to base your assessment of its future earnings on. But it is also true that pass earnings do not guarantee future earnings. So other factors will have to be taken into account to determine the value of the stock. The soundness of your valuation will depend on the soundness of your research.
Pharma and medical devices industry is quite tightly regulated and regulation and governmental decisions have significant impact on the success of the commercialization. Understanding regulatory requirements will help investors understand the pathways to commercialization, as it is the first step. Once the product is approved to go on the market, in this particular instance, regulation can also help you determine its commercial success because not only the governments will dictate which products should be prioritised for use and how they can be used but they are also active buyers in the procurement process. Also, because COVID is new to all players, we have a more level playing field. Before that ADO was at the mercy of the decisions made by the boards of private companies. It is harder the make objective assessments of such success and without commercial contracts in place it was a speculative stock.
So now let's look at chances of ADO securing contracts.
First is Ellume, up for renewal in October. With projected revenues above a 1billion US$ and urgency to dominate the market, can you give me a good reason why they would decide to stop the contract and with it their supply of their own product? Changing ADO affects the clinical performance of their products so they would have to redo the whole product prototype, negotiating with new supplier, perform clinical studies, reapply to the FDA, which will take at least a year.
Government procurement. From the links I've provided, we already know that the EU from February 2021 has issued the policy to use antigen tests to fight the pandemic so there is urgent demand for the product. This WHO guide is useful indication on the general factors that the buyers need to take into account when deciding whether to procure the product (page 3):
1.
Quality of available data used to validate the test. (Checked - data by VIRDL, the same body appointed to validate tests in Australia, many other tests on the market have manufacturer sponsored tests)
2.
Reported performance. (Checked - sensitivity 97.3%, specificity 99.6%, LoD 2.81 x 105 genome copies/mL - better than most authorized by FDA or on mutually recognized and validated EU tests list)
3.
Manufacturing quality and regulatory status. (Checked - ISO13485 for both ADO and Operon, note that other ASX stocks that claim to develop the covid test do not even have this)
4.
Manufacturing capacity and further evidence of quality. "Procurers should consider the range of other products offered by the company (especially lateral flow tests), what regulatory approvals they have for non-emergency diagnostic products, and their manufacturing and post-market surveillance capacity." This is important to see who is ADO partnering with for manufacturing (checked Operon and Ellume).
5.
Distribution and technical support. Next announcement. Can you give me any reason they cannot secure good distribution contract given what they already achieved above?
6.
Shipping and storage conditions and shelf-life.
7. Specimen collection requirements.
8. Contents of test kit.
9. The cost of the test.
10. Availability, completeness and clarity ofinstructions for use. https://www.who.int/publications/i/item/antigen-detection-in-the-diagnosis-of-sars-cov-2infection-using-rapid-immunoassaysI posted about the UK already and newcomers can make their own assessments while reviewing the TPP. Just FYI if some of you have missed it: "
As many as 384 million kits have been ordered by the UK government at a cost of over £1.3bn (€1.5bn; $1.8bn), with most being spent on a test made by the US firm Innova Group. And an additional £0.9bn worth of contracts have just closed. Lateral flow tests have become a lucrative business in the covid-19 pandemic." Given that the population of the UK is over 66 million, with 2 tests per week per person, that's not even one month of supply.
https://www.bmj.com/content/372/bmj.n287So what are the chances that ADO fails to receive procurement from the UK and all EU countries? German government is also implementing similar measures to the UK. All this without taking into account the private sector. Please do research on the production capacities of current leaders and the demand.
By now I hope you have realized that I am making this post for newcomers so they can embark on their own research. Some of my posts will have further details on current competition and regulatory framework. Please use the links to start your own research. And for fun, some of you might wonder when ADO will be listed in Germany, France, Belgium etc (as they tend to be the first markets), here are the links to check in the future (they are also useful for you to compare data between tests etc.):
List of test for Germany
https://antigentest.bfarm.de/ords/f?p=101:100:16032078396150:::::&tz=10:00
List of French tests
https://covid-19.sante.gouv.fr/tests
List of validated tests for Belgium
https://www.famhp.be/en/human_use/health_products/medical_devices_accessories/covid_19/testsSo back to the first subject of solutions. I think someone thought I was Twinvest when I first posted. That made me read some of his messages and learn more about ADO's history. I actually thought of him the other day, wondering if he left or he is also enjoying this moment. Reading past messages made me have appreciation for him and the long termers, because without them, ADO would not be here today for us to enjoy this journey. Little did I know how involved he was. I am glad and I admire Matt, because he identified problems, rolled his sleeves and worked at them. It does make me reconsider my position. Perhaps I should do more, I am a shareholder of the company after all.
