I estimate they would need 3-4 grams per clinical test which at current market would cost them $600k - $800k. The lab would pay for itself after about 3 clinical trials. What would happen is we get the production contracts from the Big Pharma's and charge them & make a profit on the front end and and collect royalties on the final sales (around 6%). We would need a whole lot of Plasmid for a World-wide production of our product (40% in India-PRC alone). Many many grams, so there would be a whole lot of money being exchanged, which equals gross. A big gross, here is some simple math:
20,000 grams X discounted price based on volume of $50,000 a gram (charged) = $1 Billion gross on just one drug for the lab.
Even if we netted only 5%, it would equal a $50,000,000.00 income per year, ON ONLY ONE DRUG!!!!!!
Let's say we have 10 drugs to market in the next 5 years, not unreasonable by any stretch, that's $10 Billion gross / $500,000,000.00 net profit and that doesn't include any royalties on the final sale. Which at at least 6% of the gross times at least $30 Billion in worldwide sales = $1.8 billion. Total is $2.3 BILLION PER YEAR NET INCOME!!! That is alot of money, a country load. You show me how many companies can generate that. One I know:
AMGEN generated $2.3 billion in net earnings (we be at $10 Billion revenue and Amgen's at $8.4 Billion, but that's splitting hairs):
This Qtr Next Qtr
Mean Est. 0.55 0.59
High Est. 0.60 0.62
Low Est. 0.51 0.57
# of Est. 27 26
2003 2002
Revenue $ 8.4 B $ 5.5 B
Total Net Income $ 2.3 B $ -1.4 B
Earnings Per Share $ 1.69 $ -1.21
EBITDA N/A n/a $ -205.6 M
Long Term Debt N/A n/a $ 3.0 B
That translates with current shares outstanding to about $800.00 per share at 100 million shares outstanding and AMGEN current closing price of $66.23.
THE BOTTOM LINE: Does $800.00 Price per share interest anyone in the next 5 years?
I'm in.
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