I was curious to see what you came up with Rev, but I think you are just spinning your wheels. We’re already in March so even if they were approved tomorrow, they probably wouldn’t contribute anything until the 4th quarter, and even that would be minimal. The revenues will depend on patient populations and services required, but the companies will face some of the same hurdles that Gilead and Novartis encountered, which will likely cause a slow ramp into 2019.
Most of the revenue last year was from biopharma clinical trials, and this should continue this year as well. Management confirmed that growth in the clinical trials continues to be strong and commercial revenues will not contribute the majority of growth this year. Commercial revenues from Gilead, Novartis, and the BP global cold chain logistics support will begin to contribute, some this quarter, but increasingly more towards the end of the year. Predicting THESE revenues seems more relevant to me at this point.
I’m guessing that the transition of the handling of the global biologics manufacturing projects for Big Pharma still has not been completed yet or Jerry would have mentioned something about it in his remarks last week, so I’m not modeling any revenue from this source for at least the first quarter.
We also have the information from Gilead last month that 28 centers are now certified, and by the middle of the year they will have enough centers certified to treat 80% of all eligible patients (which they estimate to be ~7,500). We also have a survey from the doctors at these centers who estimate that they will treat about 3 patients per month this year, but they have the capacity to treat 10 per month You can take it from there, and I have seen a wide range of estimates. If only 28 centers are used, that would be 84 patients treated each month x 12 months is about 1,000 patients. When I first attempted to calculate the revenue that these $8-$10 million contracts represent, I thought it was about $10k per patient because the patient population for the first Novartis indication was around 800. But then they announced the Kite contract was the same $8-10M for a patient population 10x larger, which would only be $1k per patient.
I look at the clinical trials, animal health and reproductive as the base-line revenue, which grew about 50% overall last year. . If this continues at this rate, that alone would be $18M for 2018. If it only grows at 40% then it would be $16.8M, and if it increases to 60% it would be $19.2M. To be conservative,I think it will be at the lower end of this range - say $17M. Then the question is: how much will commercial revenue add to this baseline? I’m being conservative and currently estimating only about $2M for the year, for total revenues in 2018 of $19M. I have lowered this estimate twice; from $23M to $21M after last quarter’s conference call and then from $21M to $19M after this last call. Right now my model shows these quarterly estimates for 2018: Q1 3.52 Q2 4.31 Q3 5.23 Q4 5.9 = 18.96. This represents my conservative estimate, and I have run a range of scenarios and hope to revise this estimate upward as we get further updates throughout the year
Interestingly, Larry Smith is estimating 18.73M for 2018 with commercial revenues from Gilead/Novartis of 1.6M and Big Pharma cold chain of 200k. I thought he was being overly conservative, but so far he has been pretty accurate
