Intellipharmaceutics International Inc. (IPCI)

[grill4thrills]

I like sitting silent and reading others posts, but I must beg to differ here guys. I know some of you like to be conservative, but $ 20M/ yr in net revenue for IPCI means that Focalin, a generic copycat in a price war to get market share with lots of competition, is more profitable per market size than Rexista, best in class with what we know so far (no food effect, bioequivalent to Oxy, and the most abuse deterrent properties – no competitor can say all 3 which is why competition won’t hold down the profitability of this drug). The math doesn't hold up...

We are selling into 1/3 of the Focalin market with our 2 strengths, so roughly a $ 250M market, and we receive roughly $ 3.5M in annual revenue AFTER splitting with Par. If Rexista (which may change the scope of the market entirely) were merely as profitable as this generic, with roughly 10X the market size of what we are selling into for Focalin, that would be $ 35M revenue/year for Rexista under the same agreement structure/profitability as Focalin, so your estimate of $ 20M revenue/year for Rexista suggests Focalin is even more profitable than Rexista? Really, half as profitable, really? There is manufacturing, sales force, distribution etc. etc. with Focalin… so none of that can support a reasonable case for lower profitability since they will have to partner/license in a similar structure. An increase in R&D on the next products should be offset with a higher P/E ratio to recognize future growth, plus IPCI openly said they will be looking to partner for R&D on Regabatin so it probably won’t even come out of pocket. Even build in a big bump in expense, you have to admit the top line you’re all using doesn’t seem reasonable.

Bottom line, Rexista is a market disruptor and it will be much more profitable no matter how they get it to market, end of story.