Replies to post #226162 on Elite Pharmaceuticals Inc (ELTP)

[mrwrn2010]

I always love these types of conversations because they completely ignore about 99.9% of all other R&D companies that burn cash like crazy and have ZERO revenues, yet some trade at a market cap in several hundred million to billions. Good stuff.

[Couch]

Gee the company just sounds so worried about the increase in generic revenues while they cut into R&D costs.

Moving over to the cash flow statement, we had a net cash burn from operations of little less than $800,000 but that includes almost $450,000 in inventory buildup. Our volumes are growing, we have to buy more materials, we have greater inventories, so this is just a normal buildup to support the growing manufacturing volumes. So the operating burn was really not material.

Looking further down the cash flow statement, it also shows that we invested another $300,000 in facility and equipment during the quarter. These are investments in our facility expansion that will enable us to support our growing volumes and business. It’s important to be proactive in this area and we are. Not enough to forecast increased volumes, we also need to ensure that sufficient resources are in place to service these volumes.

[jour_trader]

Time to take the blinders off. There are so many levers that can be pulled here to manage cashflow appropriately. You do just realize they just signed a development partner to share in the costs of development. Sharing isn't defined as Elite owning 100% of the costs without any revenue benefit. Their manufacturing revenue continues to grow. As Elite develops their own pipeline it will only be icing on the cake.