brightlight schreef op 28 april 2020 15:11:
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FL
You are absolutely right about the reagent issue.
Uncertainty is the enemy of investor confidence. The smoke and mirrors game, which management has and still is playing, to me makes no sense at all. I don't see the added value of it. It is time they start taking their investors seriously and provide them with “real” information.
Let’s talk for a moment about the strategic business situation. You are way better than I am at assessing the medical side of things, so correct me whenever I am wrong.
The way I see it, there are three pillars of competitive advantage which Bcart still has compared to the competition in POC cancer testing: speed, accuracy, first mover advantage. The fourth and most important pillar is still missing, which is sufficient market penetration.
The accuracy advantage versus NGS, (which has a similar speed) will probably remain for a while longer, I suspect. No worries there, for the moment?
More worryingly, the competitors which do also have the speed (or will soon have it) also seem to have cancer tests. Cepheid appears to be making inroads in the cancer testing area. Qiagen already has KRAS, BRAF, RAS, EGFR tests. I don’t know about Roche. I also wonder which cancer tests are currently under development at these competitors? I can envision a scenario where the competitors with the much larger installed base tell their customers not to invest in Idylla and to wait for their own cancer tests under development. I don’t know if that is likely? I can also see a scenario where on the one hand Bcart is gaining market share through the tests to which they have exclusive rights, but on the other hand is giving up market share with the more generic tests, which now form the lion’s share of their sales (correct me if I am wrong). And if they do not lose market share, I suspect the pricing pressure will not be small. Supposing a Qiagen system and an Idylla are side by side in a lab and there is the choice to run a KRAS test on either system, then surely the cheapest test will be run.
Maybe there is space for all these players in the market, but how big will the remaining piece of the pie then be for Bcart, and will it be sufficient to get to break-even soon?
I think it is a matter of life or death for Bcart to get sufficient market penetration while they still have some advantage vis a vis their competitors (I am sure you will have mentioned this fact too, regularly in your posts). I suspect that, if what remains of Bcart’s advantages disappears before they get sufficient market penetration, they are toast. I read in one of your last posts that Qiagen (in early 2018) was throwing 200 million at developing a faster system. 200 million is more than Bcart's entire cash reserve for the next couple of years. Bcart is taking a knife to a gun fight. They urgently have to start thinking about growth numbers of 100% per annum for a couple of years in succession. Time is of the essence. No wonder Verrelst is throwing everything and the kitchen sink at it.
I often wonder if Bcart would not be better off by financially partnering with a much larger company (they can perhaps take their cue from the Galapagos model, or a variant thereof). If Bcart’s development partners (Amgen, BMS, Merck, Astra Zeneca, Exas, …) were also to become (serious) financial partners, then Bcart could also take a gun to the fight.
Let’s hope their partners don’t keep seeing Bcart as just another “delivery vehicle” for their products (the word was used in an Exas press conference).
To end with the glass half full, if Bcart gets anywhere near the growth rates that I believe are necessary, this represents of course an enormous opportunity for investors.
I am curious to know your opinion on these matters, especially where you stand on the knife/gun question.
BL