Parsortix system impressing the medical world

I have written several blogs in the past about my investment in a company called Angle. This was a speculative investment that I made in 2012 when the share price had fallen back to around 26p-27p from memory. Certainly, this investment is paying off so far with the current share price around 76p. I am hopeful that the share price will continue to rise sharply from this point, particularly after today's news:-

http://uk.advfn.com/news/UKREG/2015/article/68629375

To summarise, this is a further example of  the  Parsortix system's far superior performance to the existing competition in providing a liquid biopsy for personalised medicine in prostate cancer.

Andrew Newland says, "This is the first peer-reviewed publication in a scientific journal in relation to the clinical use of ANGLE's Parsortix system. It adds to the growing body of published evidence of the system's performance as a liquid biopsy in a range of cancers including ovarian, prostate and breast cancers."

As the results of each independent study are released, I am getting more and more confident about my investment here. What particularly strikes me is the excitement from the medical community who specialise in the treatment of a number of cancers.

These comments from a news release in April this year clearly demonstrate the medical community's enthusiasm:-

http://uk.advfn.com/news/UKREG/2015/article/66496043

"Dr Eva Obermayr, Principal Investigator at the Medical University of Vienna, commented:

"The Parsortix technology contributes to the unprecedented specificity and sensitivity of the overall approach, by providing a high purity CTC sample. Parsortix is a label-free technology, and as such may become the gold standard for ovarian cancer diagnosis. By combining the Parsortix technology with qPCR analysis, we achieved an unprecedented high detection rate of cancer, even in early stage patients, where conventional diagnostic methods failed."

Professor Robert Zeillinger, Head of the Molecular Oncology Group at the Medical University of Vienna, commented:

 "It is now evident that the Parsortix system has wide application not just in ovarian cancer but in breast cancer and other gynaecological cancers as well. We are delighted to be working with ANGLE to bring this new capability to our patients as soon as possible."

A more extensive study into Parsortix's system is about to get underway with Ovarian cancer patients, and should the results be repeated then it opens up the clinical market in ovarian cancer with sales potential for the Parsortix system in Europe and the United States in excess of £300 million per annum. The whole market opportunity for all cancers is estimated to be worth in excess of £8bn.

Angle is currently valued at around £45m. Of course, it is almost impossible to value the company at this stage, but with luck and continued good progress then the company is potentially worth many multiples of this value if it can achieve both research and clinical sales in the future.

Funding is in place for the medium term.

My feeling is that given the increasingly positive results coming through from key opinion leaders, Angle will be snapped up by a predator in the not too distant future at a significant premium to it's current market cap.

I continue to hold the shares with increasing confidence.

Eckoh's of my own investing strategy

In my very earliest investing days I remember receiving a circular from a company whose name escapes me now. However, I do remember that in the circular there was a raft of information about micro-caps which were listed or about to be listed on the LSE. I don't remember too many of the companies that were mentioned, apart from one called Eckoh. I tended to concentrate my efforts on medium and large cap. shares at that time, and certainly never entertained purchasing any of Eckoh's shares. Times have changed of course, and now I like to focus my attention on the micro-cap sector of the market. Yes, it can be perceived as more risky and there will be inevitable disappointments, but the rewards can be phenomenal. With a little bit of luck and judgement  the winners will dwarf your losers, and even one or two multi-baggers will enable you too easily outstrip the indices year in and year out even if the others are duds. Anyway, I digress.

Eckoh plc caught my attention today because they have just released a positive sounding trading statement.

http://uk.advfn.com/news/UKREG/2015/article/68611575

The key summary line is:- "We remain confident that the high levels of growth seen in previous years will continue through the new financial year and beyond with current trading remaining in line with market expectations."

Today I am not looking at the current investment case for Eckoh, but the parallels between it's fundamentals and the type of companies I try to identify.

Firstly, a look at Eckoh's chart will tell you that the company hit the market towards the end of the 90s on a far too heady valuation. This is far too often the case, and I would argue that nobody is ever going to get rich by buying into IPOs. By the early 2000s the share price has plummeted, and then went nowhere for several years. However, look at 2009 onwards. A multi-bagger. Timing is crucial. These are the situations that I often look for. Interesting businesses where investors have lost patience, but where the company looks like it is about to turn the corner.

What else though? Well for me, sufficient cash on the balance sheet and a company that is capable of producing good cash generation. Little or no debt. High gross margins. Securing contracts with blue-chip and/or reputable companies/household names. A bullish outlook statement.

Now take a peek at Eckoh's final results from 31 March 2010.

http://uk.advfn.com/news/UKREG/2010/article/43300791

The share price chart from this point tells it's own story.

Will the story continue from here? Certainly the trading statement is encouraging. I haven't re-examined the most recent fundamentals so I've no idea if the current valuation is cheap, expensive or about right? I'll leave that to your own further research, but investors who bought shares at Eckoh's lows will have done very well indeed.

Will we have to wait until the 22nd Century......?

I last wrote about 21st Century Technology in January 2014, and since they released their half-yearly results yesterday, I thought I would take a look and see if the new management team had made any progress. In my last report, I mentioned that over the years C21 had been somewhat of a serial disappointer:-

http://michae1mouse.blogspot.co.uk/2014/01/21st-century-technology-plc.html

A quick glance at today's share price would appear to suggest that despite a change in the management team, it remains a poor performer.

So what did yesterday's interims look like? Well not entirely impressive or convincing in my opinion. Firstly, underlying profit was down to just £30,000 from £250,000 in the comparable period last year. Gross profits were £2m on reported revenues of £4.7m. Net cash had fallen to £1.3m from £2.6m and the basic and diluted loss was 0.38p per share.

If you strip out goodwill and intangibles on the balance sheet then NAV is zero.

The company usually generates good operating cash flow, but at the interim stage, there was an outflow of £362,000.

Russ Singleton, CEO of 21st Century plc did provide some positives for shareholders with the following statement:-

"We have made good progress in the first half of the year as we continue to implement our strategy to become a broadly-based systems Integrator in the transport industry. In line with our strategy the acquisition of RSL is serving to diversify earnings, add software capability and move the Group beyond providing individual solutions to our customers.

"First half trading encountered delays in the delivery of a rail contract which is now due to be delivered in in H2. As a result revenue for the second half is due to grow significantly and is underpinned by a GBP4.5m order book. We are currently undertaking a planned retendering for a major bus contract and therefore continued to be exposed to some risk. However we believe our strategy is sound and therefore look forward with cautious optimism."

Whilst there are positives to draw on going forward, they do operate in a highly competitive arena and given their past performance, I can't see anything attractive enough to make me want to invest at the moment. Current management have skin in the game and therefore have plenty of incentive to turn things around, however it may take longer than anticipated.

In many ways, the current situation at C21 reminds me of the task facing Belgravium (mentioned in yesterday's blog). Turnaround situations are unpredictable by their nature with no guarantee of eventual success. I am happy to have sold my shares and deployed my money elsewhere for the time being. The market always presents other opportunities.