1/15
ODX confirmation of Mologic test final numbers,

"sensitivity of 98.4% on samples with a cycle threshold (Ct) of < 20 (85% overall sensitivity on samples with Ct values ranging from 9.8 to 43) and specificity of 97.8%."

#AVCT #ABDX

2/
I cannot see any way that this test is contracted by the UK Gov because simply put there are better tests out there.

Whilst demand remains high, it may sell well privately but in my view not to governments that are carrying out more strict validation processes.

3/
"the Company confirms that it is waiting for confirmation on which test has successfully passed DHSC's performance evaluations."

So we are now in late April and still, no test has been sanctioned by UK Gov.

4/
"The DHSC have recently stated that they are in the process of assessing which of these tests are suitable for home-use and thus can obtain the appropriate self-test approval."

So the process is alive and now centres around which test is most appropriate for home use.

5/
The go-to method for LFTs now is anterior nasal.

Time to results are all so close to one another that they surely don't really play a role and people are already being mentally trained to accept the waiting time.

6/
Logic, therefore, says to me that this is purely about performance and the AVCT test is exceptionally good.

So potential curveballs aside, with one of their supposed rivals now firmly falling by the wayside, it's surely about how big a contact they can now win...

7/
and what format that then takes. Eg. just how profitable are UK Gov orders placed on UK Gov paid for equipment?

The ODX contract seems to indicate that good margins still exist although the exact duration and value cannot be nailed down.

8/
What is now surely clear is that the references made by AVCT to several million a month do not include UK Gov equipment use which involves both ODX and GAD.

9/
However, Dr Smith did say this,
"I can't be accurate at the moment as to what the upper limit is because there is a lot of work going on through government investment and other sources to increase the UK capacity."

10/
"But to give you some guidance I think that number could easily reach 30m tests from UK manufacturers this year but it does depend on a lot of things."

So UK Gov capacity is there. It is very much in the mind of AVCT management and there must be a good reason for that.

11/
meaning that reference by ODX to the "process of assessing which of these tests are suitable for home-use" must surely include AVCT.

As a reminder, I had AVCT 'safely' producing c.10m tests a month over the next 18 months. https://www.bbnbigbitenow.com/post/under-the-base-case-avacta-has-a-great-case

12/
However, my assessment allowed nothing for UK Gov contracts. It was purely ABDX, BBI and non-UK Gov GAD led.

What AVCT is essentially saying is that a successful performance led home use assessment, should deliver at least part of that UK Gov equipment based order.

13/
Pushing AVCT to a peak of 30m tests per month.

Such a result would place their average production well above my own (safer) 10m a month figure.

Now back to that UK Gov equipment margin.

14/
In the context of a 30m UK Gov contract related figure, AVCT retained the below statement.

A "mid-single-digit GBP range" when contracted to "Healthcare services providers and governments."

I believe the market has moved on and this range applies across the board now.

15/
However, what's most interesting is that AVCT state this figure on the back of references to UK Gov equipment usage.

So my stated £1 gross margin per test for Avacta looks solid even when applied to UK Gov contracts with the strong possibility that the 10m figure is too low.