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From: BMiles0108@aol.com
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Date: Tue, 3 Jun 2008 15:33:08 EDT
Subject: AIDA Question
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I haven't gotten the e-mail back as undeliverable yet. Maybe it went through. If I don't get a response, I'll try calling again.
I am one step ahead of you on that one, I also sent an e-mail to that address yesterday and it came back as undeliverable???
Brad
I agree. It would be nice to know those phase II results. I just e-mailed LEA Capital (listed on the press release) regarding the results. I'll post if I get a reponse.
All the 100 share paints on the ASK for the last month must be costing someone a fortune in commissions to keep this stock looking like the volume is on the ASK side. Unfortunately, it seems this stock has lost all buying interest, it's going to take news to get anyone excited at this point. Missing the target date for release of the phase 2 clinical testing never sets well with investors, tends to make investors assume the worst.
Brad
Whereever that the share distribution was coming from the past month, it sure seems to have come to a sudden stop. You have to wonder if they still hold shares and if they are privy to information. If so then the release of the Phase 2 clinical results may be right around the corner???
Brad
The quiet before the storm? The rising trend channel still very well in tact while the MACD leading indicator prepares to cross over the centerline and the RSI remains in a very neutral position. Meanwhile, news is expected any day now on the results of Phase 2 clinical testing.
PP: Most of study locations for AMG 951 are outside of USA.
Does Amgen apply patent for Rh-Apo2l in international and Aida only in China ?
Thanks
Looks like Amgen is working through their phase II of Rh-Apo2L for non small cell lung cancer. Amgen's Rh-Apo2L is called AMG 951.
http://clinicaltrials.gov/ct2/show/NCT00508625
Primary results for Amgen's phase II for NSCLC estimated by February of next year. It will be interesting to see how all of this plays out.
There are a few studies out there for Rh-Apo2L and they all seem promising.
It's been a month since they stated in their PR they would release the phase 2 results within the next month. I wonder if they meant the next 30 days from the day they made that statement or did they mean the entire month of June. It appears at this point that they need to release it no later than tomorrow to keep from tarnishing their credibility.
Brad
I've updated the ibox with revenues and earnings numbers for the past eleven quarters.
If anyone has any factual information to add to the ibox, either good or bad, please let me know.
Thanks. It's helpful that you can read Chinese. I'm limited to the translator on Google.
I'm sure that Jiangsu was worth the $10 million but I'm hoping its more of an immediate return even if it's a lower return rather than looking too far out in the future. Aida has a good thing going but they can kill themselves if they add too much risk.
In the meantime, the 10Q seems to indicate that the Nanwang issue is greatly alleviated with assets of $7M of Nanwang's assets being sequestered. The news on Nanwang's default was obviously the reason for the drop in Aida's share price. However the price hasn't recovered much with Aida indicating they have control of those assets. It's possible investors aren't sure whether Aida can liquidate those assets for $7M.
Hopefully the phase II results for Rh-Apo2L will be out soon.
From Jiangsu Institute of Microbiology Co. Chinese website, she has a lot of products. Her revenues comes from state gov, local gov fundings, customer services and her products revenues. I don't think Aida need to fund Jiangsu's operations, maybe the new drug which Aida is interesting.
QFA, do you know anything about Jiangsu Institute of Microbiology Co.? For instance, do you know if Jiangsu has any revenues? Do you know if Aida will have to fund Jiangsu's operations for a while or whether Jiangsu can pay for its own operations?
Thanks.
American Bulls says we have a very reliable buy signal with three white soldiers pending confirmation with tomorrow trading.
http://www.americanbulls.com/StockPage.asp?CompanyTicker=AIDA&MarketTicker=OTC&TYP=S
Barcharts had a very negative bias recommendation over the last couple weeks, it is quickly changing its recommendations towards a positive bias.
http://quotes.barchart.com/texadv.asp?sym=aida
Seems the reversal is on with the important release of the results from Phase 2 Clinical Testing of Rh-Apo2L still expected between now and the 28th. I am hoping this news will have the meat to propel this puppy.... We already know the results are going to be very good from the release of the last PR.
Brad
Wow, stock is on the move - trending back up to the $1.20 trading range with higher highs and higher lows is the way to go.
Brad
Most of Chinese companys have shows in Spring and Autun. They get orders from the shows.
Stock seems to be trading well today, definitely seems to be some accumulation taking place with all the hits on the ASK. Shares are thin for this stock, doesn't take much buying to move it. I wonder if the buying is a result of their comments in the Q report about recovering the full amount of the $7 million or if it is an indication of results to be released on the Rh-Apo2L Phase 2 Clinical Testing???
Brad
I did some looking into that myself. It looks like hospitals stock up in preparation for the Chinese New Year holidays. Noteworthy is that this is a very good quarter compared to 1Q06 and 1Q07.
What and when are those two big orders per year that you're talking about?
Aida's products may get benefits from China quake.
Most of Chinese hospitals and retailers make plan and purchase order in Q4 for next year, so the following Q1 and Q2 are weaker;
Q3 and Q4 are stronger. the Q4 is strongest for most of Chinese Pharmaceuticals.
Aida receives big orders twice a year.
Yes, the first quarter has been weakest. I'm not sure exactly why that is. Looking over the past ten quarters, sales increase from the first to the fourth quarter and then drop off precipitously from the fourth quarter to the first quarter. I don't know why there would be that much seasonality with revenues.
As we have discussed, the $7 million will take a while to play out, I don't know how quickly China moves on this type of stuff in comparison to the US. I will agree with you that I may have been a little heavy on the optimistic side of seeing a full return of the $7 million but I guess for once my optimism seems as if it will pay off. The 10Q only spoke about the valuation of the building and recovering the $7 million from just that asset, keep in mind their were other assets siezed as well so I feel pretty good about fully recovering the $7 million.
Now perhaps this stock can get back up to the $1.20 trading range or higher quickly. News by the 28th about Rh-Apo2L should help, my guess is they probably could not put any information out on that until they filed their 10Q.
Brad
Q1 is Aida's weakest quarter, but we do see revenues increase 44.48%, gross profit increase 70% from Q107 to Q108.
No write off for $7m. I was waiting for that and put buy order at 0.52; try to load up more shares for that.
Well, not that lucky.
Now all bad news are gone and two good news are coming soon: Rh-Apo2L phase II result and phase III test approval by SFDA.
Yes. They also say, "According to the ruling of the local court dated April 22, 2008, assets of Nanwang with an estimated value of $6,995,516 have been seized and sequestered pending resolution of the said litigation proceeding."
That's definitely a positive. I didn't think they would get anywhere close. I would have thought Nanwang would have come up with that interest somehow if they had that much in assets.
For the earnings, they broke even for the quarter. I was hoping for a bit better.
Quarter over quarter Q407 to Q108, revenues continued to increase and the balance sheet is still in remarkably good shape.
More on the $7 million - In the 10Q filed today they stated they felt they would recover it all, read the last couple paragraphs -
Hangzhou Aida Pharmaceutical Co., Ltd. (“Hangzhou Aida”) is a wholly-owned subsidiary of Earjoy Group Limited, which is in turn a wholly-owned subsidiary of Aida Pharmaceutical, Inc.
Hangzhou Aida was a guarantor to Nanwang Information Industry Group Co., Ltd. (“Nanwang”) for certain bank loans and Nanwang was, in turn, a guarantor to Hangzhou Aida for some of its loans. The total amount of the mutual guarantee between Hangzhou Aida and Nanwang was RMB50 million (approximately, US$7,152,678 based on an exchange rate of 1US$ = RMB6.99).
Because Nanwang over-invested in real estate, Nanwang defaulted on two of its loans and as guarantor for the loans, Hangzhou Aida had to repay the loan amounting to RMB49,123,913.65 (approximately, US$7,027,340) to Nanwang’s lenders under the current “tight” monetary policy of the People’s Bank of China.
Hangzhou Aida, in turn, commenced a litigation proceeding against Nanwang in the middle level court of Hangzhou, the People’s Republic of China on April 18, 2008 to recover the guaranteed loan amount that Hangzhou Aida had paid. The litigation application has been accepted by the Hangzhou middle level court. Hangzhou Aida had also requested that the court sequester Nanwang’s assets and such order was granted by the court. The sequestered assets include the Xinhuo Technology Building located in Bejing, some land use rights and 80% shareholding interest in Fengyuan Building Co.,Ltd.
We believe that we will be able to recover the amounts paid over on behalf of Nanwang based on the fair value of the sequestered assets. For example, the Xinghuo Technology Building located in Bejing alone has been valued by a certified agent to be worth more than RMB 300 million. There is presently a claim by three other creditors for about RMB205 million. Based on the fair appraised value of the Xinghuo Technology Building, even if the other creditors were to be successful in their claims, we would still be able to recover our claims fully.
Well.... Any day now within the next three days we will have those financial's, I'm looking forward to the results.
Brad
Well, you have to think next week will be out week with the release of the financial's and if Phase 2 clinical testing is not released next week then you have to think they will be released by Wednesday the following week, I believe they did say within the month in their last PR.
Brad
If phase II results are very compelling, it would bode well for phase III.
QFA2008 - I like the way you think. Phase 3 results are still a bit down the road but if it passes Phase 3 testing which means it could then go into production then I think the stock hits $10 in only a day or two.
JMO,
Brad
I am waiting for results of the Phase 2 testing for Rh-Apo2L too.
The results will send this stock to all time high.
Interesting..... L2 shows that all the MM's have moved up to $1.01 or higher now except for NITE at .84 and HDSN at .87. Appears ready to move back above $1.00.
I know. I was looking forward to the report too.
Yeah, would be nice to see them file tomorrow so I have more time this weekend to comb through it.
Brad
NT-10QSB filed today. Looks like the quarterly report will be a few days late.
Informative post made by another poster last week on another board, good summary information for any new lurkers out there -
Posted by: Knowledge is King
In reply to: None Date:5/5/2008 2:12:18 PM
Post #of 101463
I'm a buyer of AIDA in the $.60s
I really like the risk/reward on this one. The stock has been battered the past two weeks because the company guaranteed $7M in debt of an affiliate; affiliate couldn't pay and AIDA had to shell out the $7M. Obviously not good. It appears that AIDA will recover some of the money through the assumption of some of the affiliates assets (a building, land use rights, and an unrelated investment). It's in the courts already.
What's to like? A buy of AIDA at current prices gets you a company trading at a P/E of less than 7, with the kicker of a cancer drug entering Phase III trials in China. More immediately, the Q1 comp could be dramatically favorable for the company. Check out revenues for 2007: Q1 $5.3M, Q2 $6.4M, Q3 $7.4M, Q4 $10.1M. Pre-tax income for 2007: Q1 ($177K), Q2 $349K, Q3 $929K, Q4 $2.6M (before a $1M extra credit). I look for the greatly-improved second-half 2007 results to continue into 2008, suggesting that AIDA could post Q1 EPS of $.07+ vs nil. Management says:
There are several reasons why the latter part of 2007 was so much stronger than the previous quarters. First, the rules for tendering of pharmaceutical purchases are more widely carried out in the PRC than before, and these rules are beneficial for patented drugs such as ours as they help build strong distribution channels. Next, after several years continuous marketing, more and more clients in China are inclined and ready to accept patented drugs. By having a stronger and more reputable name brand due to etimicin sulfate's status as a patented drug, we are better able to have our drug in hospitals instead of non-patented drugs from competitors."
AIDA's Chairman Biao continued, "We have also intensified our marketing program and have made significant strides in penetrating new geographic markets such as Fujian, Sichuan and Chongqing. We used to have minimal sales in those markets but are now showing increased sales and revenue there. We expect to begin penetrating rural areas in the PRC especially with the implementation of the PRC's "Overall National Medical Insurance" policy. We've also made concerted efforts to maintain and grow sales in major areas that presently account for large percentages of our sales, such as Zhejiang, Beijing and Guangdong. Lastly, we have taken strong patent infringement legal actions against manufacturers who have been counterfeiting our products. We believe that, for these reasons, we are able to maintain our healthy growth rate through 2008."
The cancer drug kicker is Rh-Apo2L, which testing results have shown strong efficacy in treating non-small cell lung cancer, non-Hodgkins lymphoma, stomach cancer, pancreatic cancer and kidney cancer. Management estimates that this drug has the potential to eventually help 8 million Chinese. Phase 2 results are expected to be finalized this month, and AIDA "anticipates that the Chinese government will then allow for the commencement of Phase 3 testing within two to three months after the Phase 2 results are published. Phase 3 testing will entail large-volume tests on over 300 patients and is the last step before it may be commercially sold in the People's Republic of China."
A final positive in the AIDA story is the company's recent acquisition of a "controlling interest in Jiangsu Institute of Microbiology Co., Ltd. ("JSIM"), one of the leading microbiology research institutes in the People's Republic of China. JSIM has several drugs currently undergoing clinical testing and has new products in its development pipeline. This acquisition is expected to add several new products to Aida Pharmaceutical Inc.'s existing line of products, thus diversifying its product mix and enabling the Company to increase its market share in the PRC pharmaceutical market." JSIM has been in existence for 30 years.
Summing up, I believe the debt-guarantee fiasco has unfairly served to put this Chinese biotech in the discount rack. I see the stock at least doubling in 2008...
http://investorshub.advfn.com/boards/read_msg.asp?message_id=29038221&txt2find=aida+
Bmiles: so far so good and the entry was good so thanks much.
I knew it was just a matter of days until it headed back to the $1.20 range. I have been saying for the past week that the balance sheet on this stock just made it too easy to double your money with an entry in the 60 cent range. Oscillators are looking real good, I think it should continue moving up the rest of the week. Lets hope that the earnings release tomorrow insures that happens. They had a net profit of $2.4 million last quarter so I look forward to seeing what the results are tomorrow.
Brad
Thanks, guys. My concern is: can they survive? I like AIDA--that's why I bought it. But what worries me is that they are investing too many on something will not profitable in a short while. That's why they need to go for this risky mutual guarantee business. And they lost $7M now. They will get something back, but it will take long time. Also they will have no problem to find a new mutual guarantee company. But since AIDA is now involving in this sleazy Nanwang bankrupt thing, they might not find a good company, which means higher risk to do mutual guarantee business.
And it makes me very nervous that they are not mentioning the main board for 2 years.
I hope they can recover. my AIDA has lost more than 40%. :(
AIDA had a net profit of $2.4 million for the fourth quarter of 2007. Any thoughts on what to expect on the release of the first quarter results this Thursday?
Brad
wave00, in reference to your question #1, it will be recorded as a one time loss, I don't think you will see it on the financial's to be released this week but on the one to come three months from now. As we have all been discussing in previous posts this last week, our subsidiary Hangzhou Aida Pharmaceutical had the government freeze the assets of Nanwang Information Industry Group Co. in an attempt to recover that $7 million dollars. How much of that $7 million will be recovered through the assets of Nanwang is yet to be determined but whatever does get recovered will be seen as a one time gain at some point in time.
As for your question #2, the purchase of JiangSu is not recorded as a loss. Cash in a financial statement is recorded as an asset. The value of a subsidiary is also recorded as an asset. The purchase of a company with cash is offset on the financial statement by the value of that assets, thus a wash. If the purchase of the asset was done so through financing then the added value of the asset is offset by the amount financed and recorded as a liability. In other words, the purchase of JiangSu has no negative effect on the financial statement.
You also question if AIDA will have the money to finish Phase 3 clinical testing. If you look at AIDA's balance sheet then you will see that their cash position continued to grow quarter after quarter despite Rh-Apo2L going through Phase 1 and Phase 2 clinical testing. For instance, AIDA's cash on hand was $8.1 million at the end of 2006 and grew to $19.8 million by the end of 2007. Despite the cost of Phase 1 and Phase 2 clinical testing, AIDA continued to generate enough cash through operations to cover these costs and still grow their cash position while also continuing to record a real nice profit $2.7 million for the year 2007. I don't see cash being a problem at this point in time.
Brad
I think it's a very good potential return for the risk. The $0.50 drop may have been a little more than it deserved but money in hand is more valuable than money from other sources and it probably showed investors that there is risk.
I'm looking forward to the quarterly report and the phase II results.
The 7M loss is true loss, it may take years to get some recovery, not very helpful. But I view it as one time hit(26 cents/share). Now price down 50+ cents.
The current business worths .70, even more, considering the growth.
The cancer drug will make aida a 10 bagger if it got approved, which has big chance.
The liquidity is a big issue. But considering this company has strong gov support, 70 cent entry gives us good reward/risk ratio.
Regarding the Jiangsu purchase, they put down a $10M deposit in 2007 for that. They still had over $8M in cash/equivalents at year end which may have been used for the Nanwang fiasco. To your point, that cash spent and lost is certainly a legitimate concern. Hopefully the quarterly report coming out will give some good information as to their situation. They were strong before. I suspect they still are. Hopefully we'll see good earnings in addition to that.
I believe they previously mentioned that it costs about $10M to go through phases I - III. Generally phase III is the most expensive (at least that's the case here in the U.S.). If they have to ease into phase III due to the $7M lost, it may not be the worst situation. Hopefully earnings will cover the rest. At some point they also have to go into production and that will cost money.
I'm definitely a shareholder and I am optimistic. I was just noting that you seemed much more optimistic than I am. For instance, I don't think they will get anywhere close to $7M back from Nanwang. I hope I'm wrong.
It may be that I usually look for all the potential pitfalls in companies first. That may not be the most optimistic way to invest but it's served me very well so far. I scoured a lot of companies before settling on Aida. Aida has a lot of qualities (and lack of negative qualities) for which I look in a company.
As far as Rh-Apo-2L, I'm more of a realist. Obviously their guess of $150M per year with 40% margins would be an obscene amount of money for a stock with only a $20M market cap. Imagine a $0.70 stock earning $2.00 per share per year. If a dozen or so people had confidence in those numbers, the stock wouldn't be anywhere near $0.70. Obviously the validity of those numbers is a question. There are two hurdles that need to be overcome to get there. The first is the effectiveness of Rh-Apo2L and the second is the sales.
For the effectiveness, there are a few clinical trials on Rh-Apo2L which show it seems to be well-tolerated (up to 15mg/kg?) and very effective, especially in conjunction with Rituxan. That bodes well for phase II and III. While I would anticipate the phase II results coming out in a few weeks to be very good, I'm not going to count the chickens before they've hatched.
From there, the sales come into play. That depends on how good the trials say it is and should allow investors to make better guess at the market.
For now I'm taking the 'a bird in the hand...' approach. If Etimicin sales continue to do well, that alone seems to be well worth the $0.70 share price. There's less risk with that. I have a good number of shares--I like lower risk. I would prefer they didn't do anything to jeopardize that. Although if it takes off due to Rh-Apo2L, I won't complain.
I bought some AIDA a few months ago. After recent deep drop in price, I went through the sec filings and news and I am deeply concerned about this company's future. Hope somebody will explain a little bit for me.
My major concern is:
1. AIDA lost $7M recently. I won't be worried if it is just onetime lose. What worried me is that why the company will find a company like this to do this mutual guarantee business. They can't find a better company to do this?
2. They just paid $9,492,709 in cash to acquire JiangSu Institute of Microbiology Co., Ltd. This JiangSu Institute of Microbiology Co., Ltd most likely will not generate any profit in near future. So in addition to the $7M loss, it's $16.5M in total. It's a huge money for AIDA. Can they still find enough money for Phase III test? If they can, at what price? (From SEC filing---On March 26, 2008, the Company, through its subsidiaries, HAPC and Fangyuan, entered into share transfer agreements with Jin’ou Medicine Co., Ltd. and Jiangyin Hi-Tech Group to acquire an aggregate of 98% interest in JiangSu Institute of Microbiology Co., Ltd. for cash of $9,492,709.)
3. It looks like they are trying to get into a main board since 2006. Now it looks they never mentioned it again. Is it so difficult for them to get into a main boeard?
PaperProphet, I find your post a bit confusing. You previously posted you are a holder of the stock but with this post you seem to indicate your are not so optimistic about this stock. I find that confusing because most people won't buy a stock if they are not optimistic about that stocks potential, that type of investment strategy just doesn't make sense to me.
Second, I am confused as to why you say my post mapped out the most optimistic scenario. My post was not intended to map out anything at all. The post I made clearly states it's intention to correct a misleading post I made last week about revenue guidance, I felt I was doing something admirable. With this post, I also provided the link from where I had gathered that information. The revenue guidance came from the company and not me.
Yes I am optimistic about the stock and I believe the stock has double digit potential as long as Rh-Apo2L successfully completes this last stage of clinical testing it is about to enter. So far we have no reason to believe it won't as it flew right through the previous clinical tests with high ratings. Though I am optimistic about the stock, I don't feel I need to map out an optimistic slant in my posts, this stock has a lot of potential in the near future that sells itself.
Below is a copy of my previous post you referenced -
Posted by: BMiles
In reply to: None Date:5/11/2008 3:36:49 PM
Post #of 68
Correction to Revenue Projection I posted last week -
I previously stated projected revenue from Rh-Apo2L to be $1.2 billion annually, I had mixed up the currency. The annual projection is $150 million the first full year while in production and $225 million the second full year with a projected margin of 40%. Below is a link to a Q & A the company did which discusses this on the third and fourth items from the bottom of page two. This Q & A is a little old as we now know they have completed Pase 2 Clinicle Trials. I think they may also be a little behind schedule as it pertains to production of this drug. The were initialy looking at some point during 2008 but I think projections are now early 2009.
http://www.equityperformancegroup.com/aida_einvestor_kit/QiaerBiotechFAQ.pdf
Q. How much does Aida anticipate generating in revenues from Rh-Apo2L in its first year of commercialization in
2008? How about its second or third year?
A. Aida estimates the revenues of Rh-Apo2L may reach approximately 600 million RMB (US $75 million) in 2008 if the
commercialization is performed as planned and all necessary approvals are received by the SFDA. In 2009 and 2010,
revenues have the potential to reach 1.2 billion RMB (US $150 million) and 1.8 billion RMB (US $225 million)
respectively.
Q. Based on the revenue projections (above), what type of net margins does AIDA anticipate that Rh-Apo2L will
generate?
A. Aida anticipates, if all necessary approvals are received from the SFDA and Rh-Apo2L is brought to market as the plan
outlined above stipulates, net profit margins of Rh-Apo2L could approach 40%.
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This is the board for Aida Pharmaceuticals, a company based in Hangzhou, China. Aida's primary revenue-producing product is an antibiotic named Etimicin but Aida is currently developing other drugs as well. Earnings (late 2007) may be somewhat depressed as there is a new mandate in China which requires hospitals to purchase drugs only from pharmaceutical manufacturers and this has hurt results somewhat as distributors returned sales to Aida. Aida expects that this issue is resolved. Aida's earnings, similar to other Chinese pharmaceutical companies, appear to be highly seasonal with most of the revenues occuring during the fourth quarter.
Revenues/Earnings are as follows (some data is derived from other filings) ($):
Qtr: | Rev: | COGS: | Gr Pft | SG&A | Other | NI: | CompNI | Shs: | per sh. |
3Q05 | $6,249,343 | $1,543,179 | $4,706,164 | $3,210,978 | _ | $730,540 | $817,007 | 23,375,000 | $0.035 |
4Q05 | 8,445,457 | 4,163,018 | 4,282,439 | 4,903,129 | _ | -30,452 | -20,372 | 23,481,849 | -0.001 |
1Q06 | 5,331,827 | 2,983,114 | 2,348,713 | 2,327,879 | _ | 14,536 | 58,237 | 25,000,000 | 0.002 |
2Q06 | 7,284,888 | 3,579,700 | 3,705,188 | 2,803,043 | _ | 398,888 | 414,243 | 25,000,000 | 0.017 |
3Q06 | 7,023,891 | 3,103,516 | 3,920,375 | 2,481,226 | _ | 919,285 | 968,626 | 25,000,000 | 0.039 |
4Q06 | 10,002,497 | 4,414,710 | 5,587,787 | 3,688,802 | _ | 120,875 | 296,941 | 27,000,000 | 0.011 |
1Q07 | 5,296,176 | 2,972,516 | 2,323,660 | 2,164,150 | _ | -160,204 | 42,574 | 27,000,000 | 0.002 |
2Q07 | 6,419,476 | 3,605,286 | 2,814,190 | 1,965,568 | _ | -16,315 | 367,603 | 27,000,000 | 0.014 |
3Q07 | 7,373,770 | 3,557,685 | 3,816,085 | 2,379,034 | _ | 519,061 | 541,213 | 27,000,000 | 0.020 |
4Q07 | 10,114,364 | 4,375,195 | 5,739,169 | 2,454,876 | _ | 2,397,283 | 2,193,730 | 27,000,000 | 0.081 |
1Q08 | 7,652,017 | 3,700,057 | 3,951,960 | 2,984,642 | _ | -18,980 | 56,193 | 27,000,000 | 0.002 |
2Q08 | 10,899,924 | 4,731,941 | 6,167,983 | 4,211,180 | -8,077,264* | -6,771,364 | -6,960,862 | 27,000,000 | -0.26 |
3Q08 | 11,885,458 | 4,958,239 | 6,927,219 | 4,069,538 | _ | 2,289,681 | 2,361,682 | 27,000,000 | 0.08 |
* During the second quarter of 2008, a company called Nanwang Information Industry Group Co. defaulted on its loans. Aida was the guarantor of Nanwang's loan and had to repay around 50M RMB (about $7,000,000) to make good on Nanwang's default. This resulted in the extraordinary loss per share during the second quarter of 2008. In addition, $1,032,141 was paid out as a consulting fee for previous business development work.
Aida has also won several patent infringement suits against other Chinese companies which were counterfeiting Aida's products. This, combined with the Chinese government's mandate to only purchase pharmaceuticals directly from the manufacturers, could positively impact Aida's bottom line.
While the Etimicin sales seem promising, Aida Pharmaceuticals is really interesting because of the situation regarding their anti-cancer drug under development called Rh-Apo2L. This is being produced by subsidiary of Aida's called Shanghai Qiaer Bio-technology Co., Ltd which is 77.5% owned by Aida. The drug works by triggering apoptosis (programmed cell death) in cancer cells. Phase II testing has shown strong efficacy with fewer side effects than other anti-cancer drugs.
Despite the potential, the share price is possibly depressed since Rh-Apo2L is also being developed separately by Genentech and Amgen in the United States. The basis for Rh-Apo2L appears to be a public research paper published in the U.S.. In China, Qiaer (Aida) began work on the drug while in the U.S., Genentech and Amgen began work on the drug. Genentech and Amgen are obviously much bigger than Aida. Patent situations in China are fledgling and uncertain but this could certainly be an issue. Aida currently has patents on the drug in China while Genetech and Amgen undoubtedly have patents in the U.S.. If Genentech and Amgen feel they have claims over Aida's intellectual property, the dispute could hurt Aida.
The R&D landscape in China is that China can finish clinical trials much faster than the United States due to delays in the U.S. due to FDA approvals. This makes it seem probable that Aida will begin marketing the drug before Genentech and Amgen. Other issues are the lack of or reduced patent protection and enforcement. Chinese companies often manufacture U.S. drugs despite patent protection in the U.S.. Pfizer recently won a landmark suit in China against a Chinese company which was producing Viagra.
However, unlike the Pfizer case, theft of intellectual property doesn't seem to be the issue with Aida. Aida went through all the development of Rh-Apo2L themselves. While the Pfizer case was against a company which copied even the name "Viagra," Aida hasn't taken any intellectual property as far as is known. The coincidence of the name of the drug being co-developed, Rh-Apo2L (recombinant Apo2L), refers to the type of protein and not any trademarked name.
If all goes well with commercialization, the current share price is undoubtedly cheap. If commercialization doesn't go well, the company still has its profitable Etimicin sales as well as other drugs in the pipeline and this may limit the downside risk. Given the current profitable business and the large potential, Aida seems like a very attractive play.
Company's website: http://en.aidapharma.com
Press Releases (abbreviated from full press releases):
3/27/08 Aida Acquires High-Level Research Institute in China (Jiangsu Institute of Microbiology Co.) "The acquisition is expected to yield multiple new products for Aida, including several that are already in clinical trials by China's State Food and Drug Administration."
4/9/2008: Aida Pharmaceuticals, Inc. Announces New Antibiotic Drug Under Development "...its recently-acquired research institute in the Jiangsu Province, the Jiangsu Institute of Microbiology Co., Ltd or "JSIM", is developing a new wide-spectrum antibiotic, Wetimicin, in the People's Republic of China. Wetimicin is from the newest generation of amino-glycoside family of antibiotics and is being tested for the treatment of various inflammations, such as respiratory infection, urinogenital infection, soft skin tissue infection as well as infections from trauma and operations, etc. JSIM's scientists believe that it might be safer and more reliable for children and elderly patients than current drug offerings in the marketplace."
4/18/08 Aida Announces New Anti-Cancer Drug Under Development "...it is developing a potential cancer drug that seeks to trigger cell death in certain types of cancer. Vasostatin-Apo2L, a pre-clinical product being developed by Aida's Shanghai Qiaer subsidiary, is a recombinant fusion protein that integrates the function of extracted fragments of Vasostatin, an inhibitor of angiogenesis and tumor growth, with the function of Rh-Apo2L, which induces the apoptosis of cancer cells."
4/22/08 Aida Pharmaceuticals, Inc. Announces Availability of Downloadable Corporate Synopsis on its Website http://en.aidapharma.com
4/24/08: Aida Pharmaceuticals, Inc. Announces Completion of Research Institute Acquisition "...it has completed the acquisition of a controlling interest in Jiangsu Institute of Microbiology Co., Ltd. ("JSIM"), one of the leading microbiology research institutes in the People's Republic of China."
4/28/08 Aida Pharmaceuticals, Inc. Announces Update on Progress of Rh-Apo2L Testing "...the Company is compiling data for its Phase 2 testing results of Rh-Apo2L and expects to announce the findings within the next month. The Company previously announced that the target cancers for the drug have been determined and initial results are extremely positive."
12/03/08 Aida Pharmaceutials files 15-12G, certification of notices of termination of registration, with the SEC. This will mean that Aida's shares will move to the pink sheets.
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