Very interesting Bluetiger I had no idea there would be a revenue stream from the chip and recurring!.The next year should be very interesting if CE approval comes through . I'll try and top up today.
john looks like you have answered the question about why Proxima is an obvious requirement in hospitals, critical care etc with your own experiences. in terms of valuation my own thoughts of £100m are not so much based on multiples of revenue/profit at the time, but more about cost of development and sustained revenue potential. Sphere has invested circa £50million to develop Proxima, maybe they could have done it £10 million cheaper, who knows, however I have heard that larger medical device companies have invested more to achieve less and have failed. So if Sphere achieve CE mark, hospital acceptance and confirmed first sales, a larger medical company may decide to spend £100m on Sphere just to save themselves spending the same amount and failing. Secondly Proxima is not just about selling the monitoring devices, it's about selling the reusable chips. Every new patient will need at least one chip and possibly more. Once sales of the monitoring device has ramped up, the chips ramp up multiple times as recurring revenue. That recurring revenue is very attractive. I think we can assume patient numbers will not decrease so annual revenues should grow consistently. Once the critical care has been covered Proxima may well find itself in local health centres rather than having to send blood away for analysis. Imagine how many blood tests occur every week across all health centres. and that's a chip for everyone. Obviously it would have to be cost effective and less extensive than the hospital version, but still an attractive proposition. And then there may be other uses. I know they are already thinking about developing sensors for additional chemicals. However they must deliver the CE mark first. I think all management and investors will take a big sigh of relief when that happens. Will it effect the share price? It should, but i doubt many investors are watching that closely. They'll have to do some PR to get the message out. Perhaps they may wait for Hospital verification before big PR who knows. Well I hope you have managed to buy some more shares. As you can see the potential is huge and 26p or current£15m market cap is very cheap compared to the investment made and the potential.
Sphere at 500p realistic or fancifu..
My back of a fag pckt calcs are all guesstimates and rounded down.I have factored in no change to shares outstanding no foreseeable competition and all future funding will be via bank borrowing as share holders would be reluctant to stump up more cash.So by 2020 t/o could hit Â£350m giving an ebita of Â£60m and an eps of 100p and a 5X pe share price of 500p.As we well know what can go wrong probably will so for cockups glitches delays and over optimism knocking 50% off the above would still give us an sp of 200p more in line with Blue Tigers 170p.
and probably hasnt been improved in 50years or more surely this is a no brainer multiply this by every doctors surgery in the UK imagine the benefits to patients!.
Surely this is a market Sphere should be targeting the current procedure is stone age
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