Good morning, Armchair Army,
Welcome to today's edition of The Armchair Analyst, a 5-minute daily update on the ASX life-sciences sector.
Something a bit different today.
We’re talking Firums.
The largest ASX IPO since Telstra in 1997.
A valuation so big that it would immediately put it amongst the ASX’s 20 largest companies.
Larger than Coles…
Larger than Sigma…
Larger than Santos… Pro Medicus… and a host of other ASX darlings.
So what the heck is a Firmus?
Firmus builds and operates AI data centres, selling access to computing capacity to the major AI companies.
My LinkedIn has been wall-to-wall.
Firmus this… Firmus that.
Alright, algorithm…
I’ll pay attention.
calls broker
What’s this Firmus thing?
“Armchair… this company could be the next BHP”
(I kid you not… that is literally what my broker told me on the phone)
Alright, broker.
I’ll pay attention.
“The next BHP is broker speak for = this is a hot deal”
(Still, you have to divide by 10 with whatever they say…)
Since that conversation, and since the bankers opened its IPO offering, it’s been very interesting to see how the world has reacted.
Three letters.
F - U - D.
Fear, Uncertainty, Doubt.
“Short-sellers circle”... “Major warning”... “Should resist the hype”.
That’s the headlines since the IPO offer opened:
… even AI is getting amongst the FUD.
Normally, you’d see this kind of FUD from HotCopper.
But this is the second-largest IPO in Australia ever.
Stakes are higher.
It’s mainstream media FUD time.
Because oh yeah… it gets attention.
Australian tall poppy syndrome at its best.
(Look, I know that’s rich from me talking about tall poppy syndrome, given that I just roasted the CSL-Alentis deal. Still, I stand by what I said; that was a trash deal.)
Right now you can drive a truck through the Bulls and the Bears for the Firmus IPO.
So let’s do a quick take...
(This is specifically a Bull/Bear case scenario on the IPO trade, NOT Firmus itself as a company)
Bull Case
Strong demand for the IPO: Indications of interest reportedly exceed the shares available.
Passive buying: Inclusion in major ASX indices could bring buying from funds that track those indices.
Best “AI” leverage on the ASX: For investors who see Firmus as the best way to play the AI boom locally, it could become the go-to stock for that trade.
(Plus a bunch of other stuff about the AI bottleneck being the data centres themselves and other reasons to own the stock long term)
Bear Case
Exit liquidity: Any pre-IPO shares outside escrow could become selling pressure.
Valuation uplift in a short space of time: The IPO values Firmus at close to three times its August valuation, and earlier investors who aren’t locked up may want to cash in.
FUD overwhelms: Negative headlines could scare off retail investors, and the buyers don’t show up to the listing party.
(Plus a bunch of other stuff about the business model, debt, competition and execution risk)
My gut feel (and this is purely speculation and nothing else)... the media beat-up on this has been so overwhelming that the market trading on the IPO will go the opposite direction.
Just like the SpaceX IPO.
(before it falls, and then finds a nice base).
Just a feeling… (not financial advice, obviously)
Firmus is expected to list on October 23rd.
… so let’s see how this one will play out.
If you want the best take that I have read on how the Firmus IPO trades, my good friend Dr Lachlann Tierney posted about it yesterday.
Alright… that’s enough non-healthcare stuff for one day.
Let’s dive in…
The Pulse Check
ECS Botanics Holdings Ltd (ASX: ECS) signs a Distribution and Manufacturing Agreement with Curaleaf Laboratories to launch ECS-branded cannabis products in the UK. (ECS)
🪑 Nice deal, let’s see how this launch goes.
I had lunch with the Managing Director, Nan-Maree, last week, and the company's growth strategy centres around European and UK expansion.
Entropy Neurodynamics (ASX: ENP) begins dosing its first patient in Cohort 2 of its Phase 2 study on TRP-8803 for Binge Eating Disorder. (ENP)
🪑 … and we’re off.
The next question - will they be able to get a “psychedelic trip” successfully down to 60 minutes?
Microba Life Sciences (ASX: MAP) launches GI Navigator, a gut health test in Australia and the UK. (MAP)
🪑 Very nice. This is the company’s new marquee product.
Imugene (ASX: IMU) appoints Dr John Le Gall as Chief Medical Officer.
🪑 Good luck!
Cyclopharm (ASX: CYC) announces that Chinese medical societies have named Technegas® the preferred ventilation agent for pulmonary embolism imaging. (CYC)
🪑 This follows changes to US and international guidelines labelling Technegas as “generally preferred” earlier this year.
Key question. Will this now drive sales?
Adherium Limited (ASX: ADR) secures a A$700,000 unsecured loan from Barvest Ventures. (ADR)
🪑 Barvest Ventures is a related entity of Trudell.
Looks like they are determined to keep this thing alive.
Syntara Limited (ASX: SNT) reports new Phase 2 trial results in isolated REM sleep behaviour disorder with secondary endpoints met in “clinician-assessed motor signs”. (SNT)
🪑 Why these results matter (and are good), is that the Phase 2 trial not only showed that the treatment could reduced brain inflamation (and isolated REM Sleep Behaviour Disorder…
BUT that this also led to improvements in motor signs (which is potentially caused by iRSBD)
PYC Therapeutics (ASX: PYC) presents efficacy data for its PKD drug candidate PYC-003, showing a 46% increase in urinary PC1 protein levels at the ASN conference. (PYC)
🪑 PKD (or Polycystic Kidney Disease) is the “Marlin”. The major market indication PYC is targeting.
This data shows improvements in exploratory endpoints.
Larger study to come.
Arovella Therapeutics (ASX: ALA) has manufactured and released a second clinical batch of ALA-101 for its Phase 1 cancer cell therapy trial. (ALA)
🪑 Milestone ticked.
Rhythm Biosciences (ASX: RHY) shows in an independent economic study that its ColoSTAT blood test could save $72 million annually by reducing public hospital colonoscopies by 36%. (RHY)
🪑 Nice. This study helps with reimbursement, a key unlock for any diagnostics device.
GE HealthCare acquires Sofie Biosciences for $945M to expand U.S. radiopharmaceutical manufacturing reach. (MedTech Dive)
🪑 Even more consolidation in radiopharmaceuticals.
See you all tomorrow,
The Armchair Analyst
