Replies to post #3888 on Rock Creek Pharmaceuticals Inc. (fka RCPIQ)

[nsomniyak]

I will jump in here with a guess though your post was not directed to me.

When RAI had its most recent conference call, one of the analysts asking questions made it clear that he was aware of CIGX's claims and IP position and recent developments in that regard. He basically suggested that he thought it would be advantageous for RAI management to move towards a settlement and secure some kind of "first-mover" rights by settling with CIGX for a substantial sum (with an assumption that Phillip Morris and Lorrilard would subsequently have to settle on far less favorable terms).

I think if you browse back through the posts here, or on YMB, around the time of that RAI call you will find a pretty exact transcript of the exchange between that analyst and RAI management on the actual call.

[NukeJohn]

I'll take your questions one at a time

Do you think they're going to a secondary at the cc? Also, any idea how much rev they will report? Also, was reading yahoo and someone said RAI CC convinced them. Do you know what this is referrring to?

First, they don't do Conference calls (at least they haven't done any thus far, but I hope they will change that policy). Second, no, I don't think they will ever now need to do a secondary. They got enough money from the recent execution of warrants to last them until they are cashflow positive, which I think will be in Q2 2012.

As far as revenue goes, here's what I think they will do for Q4 2011, Q1 2012, and Q2 2012 (along with a couple of recent past quarters).

Q2 2011 - 262K (actual Revenues)
Q3 2011 - 401K (actual Revenues)
Q4 2011 - 960K (my estimated revenue)
Q1 2012 - 2,420K (my estimated revenue assumes ~50 GNC retail stores have stocked in March 2012)
Q2 2012 - 8,450K (my estimated revenue assumes ~500 GNC retail stores stocked in Q2)

Of course the above revenues don't have any tobacco licensing revenues....but they do include about 220K each quarter for CIGRx and Stonewall/Ariva sales.

If you don't like my numbers....run your own. I used $80/bottle for Star's direct sales and $45/bottle for GNC sales (which I think are slightly conservative). I used 1.6 bottles per order for orders on Star's website (which I believe is very conservative), as I believe over 6% of Star's website orders are for cases and ~20% of Star's website orders are for multiple bottles.

FWIW, I think by Q3 2012, Star will be selling >5000 bottles per day with an ASP to Star of ~$60. That assumes about 3000 bottles being sold daily in GNC retail stores, about 200 bottles/day from GNC's website and about 1200 orders per day on Star's website (~1.6 bottles/order). But it does not assume any expanded distribution to pharmacies like CVS or RiteAid. I think these estimates are extremely conservative.

Regarding RAI, on their last conference call the Oppenheimer analyst essentially asked the question "don't you think it would be advantageous to be the first tobacco company to sign a license with Star Scientific?" and the answer by anyone with any knowledge of the litigation history is...."Yes".

JMHO,

NJ