Ilika plc (LON:IKA) is the topic of conversation when Baden Hill’s Partner Dr Tom McColm, a Clean Tech Equity Specialist, caught up with DirectorsTalk for an exclusive interview.
Q1: Ilika have provided today their half-year report, is it fair to say that they have has completed the transition from a materials development company to an organisation focussed on solid state batteries?
A1: Pretty much, I wouldn’t say completely, I think it would be fair to say that it’s about 90% of the way there. That’s reflected in what the management has said about the allocation now of their capital resources where 90% of the resources are allocated to the commercialisation of solid state batteries and still 10% on the materials discovery. So, about 90% of the way, almost there for a full transition.
Q2: Do you think the medical or the industrial opportunities are the most promising for Stereax?
A2: I’d say they’re both promising. What I’d also say is that the industrial is probably closer as they’ve already got the product there, the P180 prototype with people testing it, I think the chances of a licencing deal is that sector are higher than in the medical sector.
I think the medical sector is potentially a lot larger, just a little bit further out, there’s still a bit of development required to get the finalised, miniaturised product out there.
Q3: Now, in Q4 of 2018 the company announced breakthroughs in Stereax power capability, energy density and miniaturisation. Which of these parameters do you think will have the biggest commercial impact?
A3: Again, I think they will all have a commercial impact, obviously they’re all good things but I think, overall, the miniaturisation is probably going to have the largest. What it does, as we’ve said in the previous question, it unlocks this medical implant market which is potentially huge and there’s no real competition for solid state batteries there. It’s a must-have rather than a ‘we’ll choose to use it’ because there’s no other device that could power these things safely.
Q4: Does the market understand the value of their ‘Goliath’ offering?
A4: I think the market fully understands the scale of the automotive opportunity, what it may not understand in Ilika’s case is what they have to do to take advantage of this huge opportunity.
The ‘Goliath’ programme is a real new front, if you like, for the company, it’s a completely new processing methodologies that are required for these large format ‘Goliath’ cells. It’s a complete move away from what they’ve done before unlike the other range of products.
So, I think the market understands the scale of the opportunity, it may not understand what the company needs to go through to get there.
Q5: I think we know the answer to this already but which part of the Stereax portfolio do you think will market first, miniature or ‘Goliath’ batteries?
A5: I think that ties in with my last answer, I think it’ll be the miniature that will get there before the ‘Goliath’ batteries mainly because the miniature batteries are basically what Ilika already have with its other Stereax products. They’ve just got to do the same type of processing, just a smaller format, and I think they’re quite far down that road already. ‘Goliath’ can be done but it’s a new front, it’s further out and a new processing, IP and development is required.
So, I think between those two, I think that the miniature medical stock would come first.
