Market's view on Life Science
Published on April 2024
- There is significant unmet demand for lab space, creating a favourable situation for LABS, though concerns about future competition and the quality of converted labs persist.
- LABS is perceived to be selling off due to doubts about mid-term demand for lab space and its significant percentage of office space, though these offices are intended for conversion.
- There are worries about the company’s liquidity rather than value, with management’s lack of share purchasing seen as a red flag.
- The Ironstone Asset Management earns substantial fees, while the actual directors of the firm make considerably less, raising concerns about the financial structure.
- Government incentives to convert empty office spaces in Canary Wharf into labs could pose a competitive threat.
- The company’s future funding liabilities, especially regarding forward funding commitments, are unclear, which could be a potential risk for investors.
- Despite a significant drop in share price, there is no evidence of insider buying, which could indicate internal concerns about the company’s future prospects.
- There are discussions about the viability of converting existing office spaces into labs, with an acknowledgement that such conversions may result in inferior lab spaces compared to purpose-built facilities.
- A deal is in negotiation that could potentially double the top rent for the company, which could improve financial metrics significantly if it materialises.