Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
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Adding Thermo Fisher to the mix, 100,000 US, 100,000 Europe.
200,000 treatments per month x 12 months, x 1,300 (65% profit margin) x 10 (forward multiple)
÷200,000,000 shares in issue = £156 per share without licensing agreements
Big one is phase 3 approval.
The 100k per month was when we had manufacturing only with Catalent, but we’ve also signed a manufacturing deal with Thermo Fisher in US, so we’re good to go when that approval comes through. Aerogen who manufactures nebuliser also scaled up.
The company then changes from a science / trials venture into a commercial operation and will need to evolve accordingly. To maximise shareholder value this will be critical.
1. The trial has to be a success, the bar has been set pretty low here so 50% effective will be great.
2. We have to be able to manufacture in high volume at low cost to protect margin.
3. We need approvals and orders.
Get those 3 and we are quids in.
So what are the possible sticking points ? I believe we have cleared them all but I am seeking your opinion
If everything came good, US approval and use, stockpiling to level of Tamiflu etc you can build a case to £160 per share or £32 billion, but we will have partnered and licences out long before then- RM has confirmed he’s already having those meetings
So... if the margin is say 50% then we're talking £1.2bn pa profit, or £6 per share dividend. If that is the case, and it is sustainable, then we really could be talking about an SP north of the £50 bull valuation by Numis... Nice!!
Think the is slightly wrong here. 100,000 treatments and £200M revenue is PER MONTH. P/E ratio is based on the annual figures ie 200M x 12 = 2.4B. But p/e is also based on the profits, not just the revenue. So maybe not quite 20 x the full 2.4B as we will have expenses. But whichever way you look at it the figures are huge.
What’s your figure ?
Question ... and I have researched this avidly on all levels, but do you think it has s as my chance of failure ? And is so what ?
I wanted to put some figures to our possible future sales here:
100 000 treatments at £2000 per treatment is £200 million (while current market cap is £370ish million). Then the share has to go up by a Price Earnings multiple, currently in pharma 20 times p/e is normal. So company should be valued at £4 billion after just one sale. The price should therefore go up around 11 times, from the current 174p.
Takeover:
Anyone in this industry including the American government can see that buying the whole company, even at 300-400p per share is the best way to get value, over just buying our product/drug.
Realistically:
If the price holds up, so that we can realise double or more, from current price. (2 to 4 times current)
If we get lucky:
It goes up 10x on the first sale, then get taken over for around double that. So 20x current value.
Practically:
I think the U.K. government has a secret stake 15-30% because this drug buy a U.K. company is too important for the NHS to allow a foreign company to takeover. This company did raise something like £80 million in one day, right!? Interesting that this shareholder is not listed in the majority shareholders, because £80 million didn’t come from 80 million individuals, in one day. I speculate that they have enough to prevent/block a takeover, so that they can buy the company themselves or agree a future supply deal in advance of them allowing the takeover.
Conclusion:
We should make anywhere from double current share price to 20x current price. There is no way we are getting bought out above 20x - there is too much money to be made in this product/drug and pharma has too much cash on their books, not bother. (Have a look at how much cash the top 4 pharma companies have laying around making 1% interest in a bank account). It makes no sense to have £1-9 billion just laying there, when there is so much future value in our company. 20 years of patent protected value and a global pandemic with daily new variants on a rampage.