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Hello CP;
Thanks for the info. I thought it very odd that there were no posts for several days. I thought that perhaps there was an issue with the IHub website. I don't post very often but, I read this board on a daily bases. I also noted that there were no posts on the HALO board for a week now. But there, that's not that unusual.
Regards
golfho
P.S. I should have listened to you WRT HGEN...I took quite a haircut...Grrrrr
I see no post after this one...
golfho
Hi CP…
I’ve not posted in a while because I’m going through some serious personal problems. However I’ve been tracking the construction progress via the City of Tustin citizens portal. Simply stated...We are behind schedule. Phase I is less than 50% complete, Phase II is moving along and is currently at ~45% complete. We will not have Phase I complete this quarter as scheduled. I’m sure that there will be revised timelines announced during the upcoming quarterly report. The all important backlog/new orders will be key.
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Good Luck to All.
Regards
golfho
Source...???
Let's see what tomorrow brings...
Good luck to all.
https://seekingalpha.com/news/3727134-halozyme-therapeutics-q2-2021-earnings-preview?mail_subject=halo-halozyme-therapeutics-q2-2021-earnings-preview&utm_campaign=rta-stock-news&utm_content=link-3&utm_medium=email&utm_source=seeking_alpha
Regards
golfho
I said that…
I was going to step away from my computer for a few days. Why…???
because nothing of significance will occur to effect the share price until the EUA is granted or not. In my view the result will have a binary reaction. We will sink like a rock or fly like an eagle. Watching the moment to moment price swings is not good for my fragile brain and emotional state.
Some people are good at looking at charts to determine were the stock price will go. I am still amazed at some peoples ability that have posted on boards over the vears. I have no such skills. As a retired engineer and as a person who spent a lifetime in science I cannot wrap my head around something that is, at best, a pseudo- science where there are more exception to the rules than there are rules.
Having said that...To your question...“In the meantime which stock might go to $50 first CDMO or HGEN?”
In some ways its the like the tortoise and the hare. CDMO is like the tortoise, slowly but steadily moving forward with their plan to increase revenue and exceeding stated goals. They are in the middle of a significant expansion of capacity. Going from a current max. revenue of ~ $120M to a projected ~ $250M. When will that happen you ask…??? Probably within the next 2 to 3 years. HGEN on the other hand is the hare, granted a EUA and it’s off to the races...NOT, and it’s a heart attack at the starting gate…!!!
What do I think will happen to HGEN if granted? I think that we will see the same market reaction that occurred when the PIII results were reported...And perhaps the same fade afterwards. When do I think that we will take off…??? Right after the 9/30 Third Quarterly Report issued around Nov.
Now back to your question…
If EUA is granted HGEN will be +$50 by the end of this calendar year.
CDMO will be +$50 within the next two years…
In any case I have them both...(Smiley face emoji here)
Hope we will have a lot to talk about on the 15th
Regards
golfho
More info on the MHRA rolling review…
I’m still doing research but from the following websites:
https://hvivo.com/wp-content/uploads/2021/04/Speder-Bruno-Rolling-Reviews-Feature-May-2021.pdf
And…
https://pink.pharmaintelligence.informa.com/-/media/supporting-documents/pink-sheet/2020/10/mhra-guidance-on-new-ma-procedures.pdf
It appears that the rolling review can take from 60 -100 days to approval from acceptance of request.
Maybe that’s why the meh market response right now…
So what’s going on?
Well we have double the average volume in half a day...and the price has barely move. I’ve seen this happen often with start-up biotechs before.
Oh...My opinion…??? The MM’s are helping their II friends get in on the cheap. There are only a few examples of retail putting it to the II’s most of the time it’s the other way around.
Sad but true. If this is a stealth accumulation by II’s (Not so stealth really) Then this will do us well in the long term. When their interests are aligned with ours we will ultimately do very well.
I think I’ll walk away from my computer for a few days…
Good luck to all.
Regards
golfho
Hi eb…
You wrote:
I second your sentiment eb…
As a newbie as well, I also appreciate their (And others) contribution to this board and my understanding of our investment in HGEN. As a victim of PPHM PTSD I’ve stayed away from biotech stock for quite a few years while focusing on capitol preservation. As it turns out, holding onto CMDO for all of these years has now turned into a very rewarding result.
So why invest in HGEN now and take (For me) a very large position at 74…???
Here’s what I see:
1- The science: Lenzilumab appears to address a fundamental issue in a novel way much like Bavituximab did a decade ago. New science...not another version of something already invented.
2- The management team: Durrant, Chappell and Kilcoyne are top notch. Unlike the Three Stooges that ran PPHM.
3- Political connections: Durrant, Chappell and Kilcoyne come with an outstanding long term association with top tier companies and management teams. Those association can create pathway to success. And, also in some situations...Enemies.
4- Outside support: Several Gov’t agency's are actively supporting the company i.e. NIH, CRADA, BARDA, OWS and several renowned institutions are involved in Lenzilumab’s development, Mayo Clinic, Dartmouth, etc..
5- The all important EUA submitted on 5-28-21 and the UK MHRA submitted on 6-14-21: We are now 5+ weeks from the EUA submission. The time period of 6 to 8 weeks starts on 7-9-21 and goes to 7-22-21. So within the next 2+ weeks we will hear about the EUA. I have no idea how long that will take but, I agree that they have a greater need.
Here’s what I think: Political consideration aside, the science is compelling. In my view I think that the PIII data clearly points to an effective treatment for the cytokine storm that occurs in some hospitalized Covid-19 patients. There does not seem to be any significant adverse event associated with Lenzilumab. So simply put...It works very well, there is a crying need for treatment and it doesn’t hurt anyone...To me that says...Approval.
Why not…??? Well political influence by a competitor might be a factor...Political influence by anyone for any reason could effect the outcome.
But at the end of the day...It’s my opinion that approval is more likely that not.
When…???
I’ll SWAG (Scientific Wild Ass Guess) it at the end of the 6th week 7-15-21.
UK approval time frame...Unknown
Let’s not forget that management stated their intent to submit to other authorities soon. E.U.?
Good luck to all…
Regards
golfho
And some more good news...
https://finance.yahoo.com/news/halozyme-announces-janssen-receives-european-174800220.html
"Halozyme Announces Janssen Receives European Marketing Authorizations for DARZALEX® (daratumumab) Subcutaneous Formulation for Newly Diagnosed Systemic Light-chain Amyloidosis and Pre-Treated Multiple Myeloma"
Regards
golfho
FWIW and IMHO...
I think that the large purchase of HGEN at the close was part of the likely fund buying as part of the Russell inclusion. I've seen this type of thing happen before. As a matter of fact if memory serves me, it happened to us when PPHM was included in the Russell index. Big purchase with a drop in share price.
On the other hand the huge purchase of our stock right at the bell is eye popping to say the least.
Good news to come...???
Pinch me...
Oh...!!! I almost forgot...Happy Father's Day to all of the daddy's
Regards
golfho
About that Linkedin video…
I like time laps videos in general, it would be nice if they continue to update. I wrote to Stephanie yesterday and asked if it and others could posted on our Avid Investor Relation page. She said that she would look into that.
More importantly is the actual progress we are making. I posted a chart I created a while back that I use to track progress. Here’s the most recent version.
CHART:
Note:
The electrical permit EL-2021-00038 is now 100% complete, completed on Wed. I assume that that permit was for the rough out. More electrical permits will be needed to complete the projects. On that same day they added another fire permit FIRE-2021-00061 and another building permit COMBC-2021-00062. Well it seems that we are making slow but steady progress. The stated goal was to complete the expansion in this calendar year.
How are our biggest customers doing?
Comments on HGEN’s Annual meeting:
There does not appear to me that there is a production issue/shortage for Lenzilumab. Several posters on the HGEN board appear to be concerned, I am not. What dawned on me during the presentation are the plans for several PII/III trials that are set to start in the 3rd or 4th Quarters. Potentially several hundred patients. Part of that will go to our bottom line, orders must be placed in advance of a trial.
There is a need to produce a significant amount of Lenzilumab beyond the FDAs EAU. The clinical trials noted above, the potential for a CMA in the U.K. The EU request coming soon. And of course we all know that any or all of the requests for emergency use could be denied and being granted are months away. As a recovering PPHM owner we have first hand experience in dealing with unscrupulous players and nefarious deeds.
HALO:
Their share price has taken a beating recently...For no apparent reason. In their most recent CC they reported very good uptake of ENHANZE. That should imply additional orders from them.
ADCT...TBD
Regards
golfho
Seems like we're having some audio issues...
Trying to calculate things that are not calculable…
What will be reported in the upcoming annual report:
Total Revenue for the FY.
The all important backlog.
Our FY ends on 4/30 and will be reported soon. (My best guess is 7/6, 7/12 or 6/28...Why? Because good news is often reported on the first business day of the week...more on that later.) What can we conclude with whats been reported by our most important customers?
HALO
From the latest 10-Q (First Q ending 3-31-21 reported last month)
Cost of product sales $18.22M
From the annual (Ending 12-31-20 reported in Feb.) Cost of Product Sales(CPS) –Cost of product sales were $43.4 million in 2020
From the 3rd quarter Cost of Product Sales for the 9 months was $17.095M
Calculated 4th quarter CPS was $36.3M
So for the 6 months from 9-30-20 to 3-31-21 the CPS was $54.52M
Now our Quarters are timed differently. From 9-30-20 to 3-31-21 HALO spent ~$36.3M on CPS. The CPS has some other costs beyond purchase of ENHANZE but my SWAG is 90% for production. I arbitrarily assign a 50-50 split between AVID & Catalent. So...$36.3 X .9 / 2 = $16.34M. Those purchases would appear in our 3rd Quarter report. In addition our 3rd Quarter ended on 1-31-21. So it’s possible that some of HALO’s CPS for their 1st Quarter (12-31-20 to 3-31-21) of $18.22M could be added to their order.
HGEN
From their latest 10-Q released last month.
“The increase in net loss for the first quarter 2021 as compared to the first quarter 2020 was largely due to an increase in total expenses, mainly Research and Development expense (“R&D”) of $59.2 million from $0.7 million for the three months ended March 31, 2020 to $59.9 million for the three months ended March 31, 2021. The increase in R&D is primarily due to an increase of $51.4 million of expense in lenzilumab manufacturing costs”
And:
“In the second quarter of 2021 the company anticipates the amount of spending on lenzilumab production will be at least the same level as the first quarter of 2021. If an EUA or CMA for lenzilumab is not received by mid-2021, the company will seek to decrease or eliminate spending on the production of lenzilumab for commercial use.”
So HGEN SPENT $51.4M from 12-31-20 to 3-31-21 and plans to spend the equivalent amount from 3-31-21 to 6-30-21.
How much of that was reflected in our 3rd Quarter? And how much of that will be reflected in our 4th Quarter?
On 5/25/21 we announced a manufacturing contract with ADCT, too late for the 4th quarter report but is it possible that at the CC Nick states something like…“Our backlog at the end of the 4th quarter was XXX and is now +XXX”
About 6 weeks ago I posted some speculations (Post #338403)
“In about 2 months we will get the annual report. If we hit the mark of between $88M - $91M we will have increased our annual revenue from $59.7M to ~$88M - $91M...That’s an increase of nearly 50%. At this point (End of 3rd quarter) we booked ~$68M in revenue, which implies that we need to only meet the quarterly average of the last 3 quarters (~$22M) to arrive at the revenue guidance of $88M - $91M. Management has stated several time that the capacity of our current facility is ~$120M. Implied is that we can produce ~$30M quarterly. Hmmmm….We do have the backlog ($74M). Will we get another upside beat…??? I think it’s possible.”
I no longer think it's possible...I think it’s very likely.
If I were at a casino today with that proposition I would be shoving all of my chips in the pot and declaring “All In”
Some other thoughts…
The margin per product is not uniform. Each produce has its own process, some require more effort to produce some less. There are economies of scale to be considered. Competitors pricing, idle time. But at the end of the day...When we are nearing max. capacity we generally near max. margin...Not a bad thing.
OK...Now for some totally silly stuff…You know...Like Johnny Carson’s Carnak holding an envelop to his forehead and answering the question within.
Carnak predicts...
Total Revenue for the FY: ~$95M - $96M
The all important backlog: ~$70M - $100M
I’m off to hear HGEN’s shareholders virtual…
Good luck...Stay safe.
Regards
golfho
YEP...
That made my eye's pop...
I'm off to play golf. I'll check back this afternoon.
Good luck to all
Regards
golfho
FYI...
"Humanigen to Present at Jefferies Healthcare Conference"
https://ir.humanigen.com/news/news-details/2021/Humanigen-to-Present-at-Jefferies-Healthcare-Conference/default.aspx
"Management will discuss its lead product, lenzilumab, which recently completed a Phase 3 clinical trial of in patients hospitalized with COVID-19, including the publication of the results of the trial and the status of the Company’s submission for Emergency Use Authorization (EUA) to the U.S. Food and Drug Administration, in addition to providing an update on the Company’s commercial preparation efforts for lenzilumab, and an overview of the Company’s other development programs."
Should be interesting.
Regards
golfho
Well now that it’s raining…
And I can’t play golf...I decided to do some reading...And writing
WRT:
Interesting times…
Last quarter was amazing. A giant increase in backlog ($74M) and an increase in projected revenue ($88M - $91M). See chart below. In about 2 months we will get the annual report. If we hit the mark of between $88M - $91M we will have increased our annual revenue from $59.7M to ~$88M - $91M...That’s an increase of nearly 50%. At this point (End of 3rd quarter) we booked ~$68M in revenue, which implies that we need to only meet the quarterly average of the last 3 quarters (~$22M) to arrive at the revenue guidance of $88M - $91M. Management has stated several time that the capacity of our current facility is ~$120M. Implied is that we can produce ~$30M quarterly. Hmmmm….We do have the backlog ($74M). Will we get another upside beat…??? I think it’s possible.
Chart:
How is the expansion of the manufacturing facilities coming along…???
Will we be able to complete the expansion by the end of calendar year 2021 as management stated?
Well here is what I could dig up with reference to building permits in Tustin.
Chart:
What about the all important equipment? Did we order in a timely fashion…??? Can the manufacturers deliver on time…???
What about future income.
Well HALO will be reporting their first quarter report next week. We will get a glimpse into the SC uptake. More revenue for them implies added orders for us. How much and when is hard to say.
Soon HGEN will be requesting an EUA for their Lenzilumab. I think that they have a better that 50-50 chance of getting it. This could be a blockbuster. Again more revenue for them implies added orders for us. Again how much and when is hard to say.
ADCT another customer stated:
“ZYNLONTA™ (loncastuximab tesirine-lpyl) granted accelerated FDA approval...”
and
“Commercial launch progressing well; orders shipped”
This coming fiscal year could finally be the one…
Pinch me…!!!
Regards
golfho
Hi all;
I'm trying to post 2 spreadsheets to a post. I tried to screanshot copy & paste...Not to successful.
Any ideas...???
Thanks
golfho
Excuse me...
I looked at Humanigen's website under "Financials" and "annual reports" for their SEC documents:
https://ir.humanigen.com/financials/annual-reports/default.aspx
You'll note that they only provide 2018 & 2019 Annual reports, hence my confusion. One would reasonably thing that, that information would be their...No...???
Thanks cheynew, epcjmc, PreciousLife and cowtown jay
FWIW I'm relatively new to this board and am invested in HGEN with several thousand shares. Via my significant and painfully long CDMO/PPHM experience.
Regards
golfho (He)
HELP…
I’m trying to read up on the Annual and Quarterly reports.
The end of the fiscal year for HGEN is 12-31-20.
Typically the report is issued at the end of Feb.
This is now the end of April...No report…???
Isn’t there SEC requirements to report within 60 days…???
Even the 90 day max requirement is way past due.
I fully understand that whatever happened in the last quarter will have absolutely no impact on the future of our company...It’s all about the EUA. FWIW I believe that...Baring any covert crap, that the FDA will grant a EUA…
Bad stuff has happened before…
Good luck to all.
Regards
golfho
Well Yes stockaxe there is information...
In her response.
The process of fill & finish was originally addressed by previous management and therefore could have been abandoned by the current. I was wondering if this is still part of the two new expansions. I agree that her answer was an implied yes. But my point was that a simple yes would be more direct less vague.
We will all find out in the fullness of time.
Stay safe
Regards
golfho
Well…
It looks like we are moving up nicely again. The assumption is that we will be garnering more and more manufacturing business and that was confirmed by the significant increase in back orders reported in the most recent CC. To date though...We have only 1 commercial manufacturing contract and that’s with HALO. Everything else is manufacturing for clinical trials or Process Development. The recently signed manufacturing contract with HGEN would be our second such contract. But...They are first going to submit an EUR “Soon” and may receive one within the next month or two after submission.
Here is the list of CMO’s they have contracts with:
Catalent Pharma Solutions Bulk drug substance manufacture, fill and finish, clinical packaging
Lonza Sales Bulk drug substance manufacture
Patheon Biologics Bulk drug substance manufacture
Avid BioServices, Bulk drug substance manufacture
Emergent BioSolutions, Fill and finish
Ajinomoto Bio-Pharma Services Fill and finish
Bryllan Fill and finish
PCI Pharma Services Commercial packaging
Catalent is the big cheese that does everything from soup to nuts. Lonza, Patheon are our competitors for bulk manufacturing. Fill & finish is also done by Catalent and three others. By the way...Weren’t we told a few years ago that we were looking into getting into F & F...Does anyone know the status on that…???
NOTE: I started to write this post over the weekend and decided to ask Stephanie yesterday…
Here is her answer:
“Hello Mr. Gxxxx,
Avid continues to evaluate relevant expansion opportunities. Having said that, we do not have anything to report at this time.
Best regards,
Stephanie”
God forbid she should provide a simple yes or no...
Both HALO and HGEN raised a significant amount of money recently. I don’t know why HALO did. The royalties from ENHANZE should start to increase rapidly and that’s great for us and them but why the extra cash? (Full disclosure: I’m long both) HGEN’s needs are obvious, they will need to purchase barrels full of lenzilumab rapidly if they get the EUA.
About...Supplying barrels full of stuff...(lenzilumab, Enhanze and other clinical trial candidates).
So...Where are we in the expansion phase…???
Nick stated clearly that they expect to have Phase I completed by the end of this calendar year. So...Where are we…???
Well digging into The City of Tustin’s “Citizens Self Help Portal” I discovered the following:
Fire Permits:
https://tustinca-energovpub.tylerhost.net/Apps/SelfService#/permit/86f3285a-4f9a-48e0-b46c-b8e17bd56c84
https://tustinca-energovpub.tylerhost.net/Apps/SelfService#/permit/1d9828b4-8da5-4f48-bbe0-8ad3df7102f2
Building Code:
https://tustinca-energovpub.tylerhost.net/Apps/SelfService#/permit/26b4f3a2-ccc4-4f2e-b465-1001c9f15cde
Electrical:
https://tustinca-energovpub.tylerhost.net/Apps/SelfService#/permit/3810ce1f-bca7-4496-be14-6defc4e1fb70
I’m not quite sure what the COMBC prefix includes but it appears to be an overall construction permit request. There are 2:
https://tustinca-energovpub.tylerhost.net/Apps/SelfService#/permit/cf7fda8d-d49b-443b-b303-dc104246040f
And
https://tustinca-energovpub.tylerhost.net/Apps/SelfService#/permit/07b5e797-c4e2-4c43-b29f-dc13badd626a
So...In conclusion...We are on the move.
As always...Good luck to all.
Regards
golfho
P.S. I'm off to play golf. I'll check back in after the market closes
Thanks for the info...
I wish us all good luck. I think that the science is spot on...
It's the politics in the FDA and the incredible power of big pharma that keeps me up all night...!!!
Stay well
golfho
Hi All...
I have a few quick questions.
1- Does anyone know the dosing amount? How many mL per dose? How often are the doses administered. Is there a limit on the number of doses allowed?
2- To my knowledge the company has not set a price per dose. I remember a poster recently suggested $50K. Dose anyone have an opinion on this?
Thanks in advance
Regards
golfho
Great news and congratulation to ALL...
EUA by early June...???
Any thoughts
Regards
golfho
WOW...
The cost of webcasting was prohibitive...
You mean like...
Maybe...
$100...
WOW...That'll break the bank...
WTF
Regards
golfho
Nice find...
Things are looking better and better on the clinical trial front.
To bad the share price is not reflecting it yet...
Grrrrrr....
Regards
golfho
Got it thanks
golfho
Hi All;
Simple question...How do I add a new board to my favorites?
Thanks
golfho
This does not look like...
A good thing for the share price...Short term...
Any thoughts?
http://www.halozyme.com/investors/news-releases/news-release-details/2021/Halozyme-Therapeutics-Inc.-Announces-Proposed-Offering-of-500-Million-of-Convertible-Senior-Notes-due-2027/default.aspx
The 10K looks good...
No...???
Regards
golfho
Brilliant...
What a wonderful group of people we have here...
2021 could be the turning point.
Good luck to all.
Regards
golfho
FYI...
More investors...
https://ir.avidbio.com/sec-filings/sec-filing/sc-13ga/0001319244-21-000021
1%
People want in...That is...People with money want in.
A double from here would heal a lot of wounds...
Good luck to all
Regards
golfho
I have the same plan....
I hope to live that long to see it come true...!!!
Good luck to all.
Stay safe
Regards
golfho
Let's hope...
That stockaxe's prediction of $30-35 happens...
Sooner that later...
I'm 73
Regards
golfho
Your last two posts…
That you addressed to me...I agree...The rosy-er scenario is well within the realm of possibilities.
However, these days I take a more circumspect approach. Why? Because on EOB Friday 9/21/12, I had $534,000 dollars worth of PPHM stock. On Monday morning 9/24/12, I lost ~$434,000 of it. A pure act to sabotage. I compounded that by, sticking around for over +2 years and periodically calculating and posting, the potential outcome of the PIII trial. Another wrong rosy scenario and another kick in the groin.
Now to the point of this post:
In your post #33673 you stated:
“I think the thing you're missing is that the expansion facilities may not be sequential. I think a reason for doing an equity raise despite plenty of cash on hand was to give the flexibility to build the second expansion even before the first is complete. If that happens, the $270mm revenue opportunity will come well before 2026/2027”
I think that there is a strong possibility that you may be right WRT revenue growth and the sequence of the build-out.
Per the following Tustin Ca.websites:
https://tustinca-energovpub.tylerhost.net/Apps/SelfService#/permit/3862a04a-595b-430c-b60a-7632cc184958
And:
https://tustinca-energovpub.tylerhost.net/Apps/SelfService#/permit/365adc09-ddf6-4504-a305-04acbcf33def
All of the rough-out work is complete. The next phase (Defining the specific pieces of equipment, location and final hook-ups) will require customer input and possible down-payments.
Why the sudden rocket move…???
Maybe...Some people got wind of this…???
What’s this…??? A firm commitment for expansion…
I can still dream.
Good luck to all.
Stay well and stay safe.
Regards
golfho
P. S. My little sad story was in no way a solicitation for pity...I have my big boy pants on and can handle adversity.
What in the world...
Is making this rocket take off...???
Somebody knows something...
I don't...
BUT...BOY AM I HAPPY.
Good luck to all.
golfho
Yes...
It's starting to feel like fun.
Regards
golfho
I like your projections better...
I was being conservative...And a little tongue & cheek...
Regards
golfho
To all of the old timers…
It’s heart warming to see some of the old timers pop up from time to time.
I don’t post frequently because there isn’t much I can add to the conversation. When we were PPHM it was about the potential of Bavituximab. But nefarious deeds set us back and we never recovered. I jokingly said that I was spending my days under my bed sucking my thumb.
The transition from PPHM to the mab-ufacturing company CDMO has taken longer than I liked...With several disappointing hiccups.
But I do fill that we have turned the corner...
Some things to unpack.
Let’s examine the expansion.
What we have learned from public records is the following:
The Myford facility is 84K sq. ft.
42K leased in ‘14
42K leased in ‘17
Current active projects:
0047: 13,060 sq feet - Description:T.I. consisting of 13,060 sq ft. "Avid Bioservices"; new partition walls, doors, roof equipment, foundation for future equipment.
This is about a third of the 42K sq ft. space leased in ‘17. It is overwhelmingly likely that this space will be used for manufacturing. I think that there is some decisions that still need to be made as to what size bioreactors are need to be purchased, 500L, 1000L or 2000L. That decision must be based on the type/quantity of production needs of our customers.
0062: 1400 sq feet - Description:Existing building with open warehouse, Convert approximately 1400 SQFT from floor storage into a mechanical room. This space will be enclosed with new lighting, new water distribution piping, & HVAC for the mechanical room. Water purification equipment will be added into the room and water storage tanks.
Simple...They need additional purified water capacity for the new bioreactors. The initial Franklin facility water purification system apparently cannot meet demand.
From the recent C. C.
"the first phase of expansion, which we estimate will take approximately 12 to 15 months to complete at an estimated cost of approximately $15 million. We expect that the first phase of expansion could increase our annual revenue generating capacity by up to $50 million, bringing the combined annual revenue generating capacity of our Franklin and Myford North facilities up to $170 million.”
It seems obvious that about one half of the money raised will go to the completion of the phase 1 expansion. That will potentially generate an additional $50M in revenue. They stated that the combined capacity could produce a “combined annual revenue generating capacity of our Franklin and Myford North facilities up to $170 million.” I estimated a few months back that between product development and manufacturing, the current facility was capable of generating revenue of ~$120M. The current revenue guidance is ~$84M - $88M that implies that we are operating at ~ 70% - 73% of max. capacity. We can generate an additional ~$34M before the need for additional capacity.
“The decision to commence the second phase of expansion will be dictated by revenue growth and projected customer demand. Based on preliminary conceptual plans, we estimate that the Myford South expansion will take 18 to 24 months to complete at a cost of approximately $45 million to $55 million. We estimate that the addition of the future Myford South facility will increase our annual revenue generating capacity by up to $100 million. "
Now the fun part…
According to this:
http://pages.stern.nyu.edu/~adamodar/New_Home_Page/datafile/psdata.html
The average Drug (Biotechnology) P/S is 6.88...
So…
Currently at the projected average revenue(sales) of ~$86M X 6.88 our market cap. should be $591.68M….It’s at $689.17M...That means that our P/S is ~8.63...
What that implies is that the MM’s are giving CDMO an above average P/S...Period.
Going forward…
The first phase of expansion will take ~ 12 -15 months. That puts us at around Dec. ‘21 to around May ‘22.
Grrrrr….
We will not be able to produce revenue above ~$120M MAX. until after 12/21 to around 5/22.
OK…
With increasing margins our P/S should; at the minimum remain at ~8.63…
I’ll assume that we will not get to max. potential revenue but, we might get to 90% so. $120M X 90% = $108M
$108M X 8.63 = $932.4M market Cap. Baring any further dilution...At 60.56M shares outstanding our share price could be $15.36...Between now and the next 12 to 15 months.
Not great but not crappy either.
After the completion of phase one expansion and using the same max. utilization of 90% we could be...$170M X 90% = $153M X 8.63 = $1320.39M (I’ll assume some additional dilution...Say 10% so our outstanding shares grows to 66M) $1320.39M / 66M = ~$20.00
A factor that is unknown is the potential of having advanced orders for the future added production capacity with firm commitments and deposits.
What about the Phase 2 expansion? More importantly when…???
Well this is were I go from a SWAG to pure science fiction...
I can still dream...Can’t I…???
Let’s just say that by mid year 2021 we start the phase 2 expansion. We have ~$15M available from the recent offering. That means that we will need to raise about $30M to $40M to complete the project. I have no idea how that will happen or what mechanism will be used.
But let’s just use some simple math...Another offering at $10 a share, and let’s use the higher number of $40M needed means that the dilution will be ~4M shares
But by mid 2024 we could have the added capacity that can generate an additional $100M...When will we get there…??? A year or two…??? That’s 2025 -2026
$270M X 8.63 / 70M shares = $33.29 per share by 2027
Good grief...I’ll be 80 when I break even...
Stay safe and Happy Holidays to all
Regards
golfho