UMD - Welcome aboard! It's tough to tell what Q1 and Q2 will bring, as the company is in the middle of an impressive transformation. I expect many "wow" announcements over the next two quarters, each adding more support for the fundamentalists, technicians, and hybrids. Below is a slightly-revised version of something I posted earlier this month.
In less than a year we will know much more about where this company is heading. Indeed, I expect the PPS to hit $5 if the company fully succeeds on ALL of the following longterm goals:
1. Builds best-in-breed mini-McKesson business for the 20K-plus independent pharmacies and small retailers. This may include up to 6 sales reps selling for WholesaleRX and PIMD, each entity with class 2 licenses (minimum with 6 fully-functioning sales reps is about $2M monthly, $24M minimum annual run rate, $36M if all sales reps are rock stars and average $500K monthly.
2. Acquires more drug supply chain businesses and/or a larger ownership interest in WholesaleRX, thus further increasing the bottom line (presently 20%)(remember, we own 90% of PIMD, which is likely where Scrips will be focusing its sales staff as they continue to ramp up this low-risk business model.
3. Secures strong foothold in China with Children's RapiMed (only 6 days, 3 hours, and 28 minutes before regulatory approval), launches an improved RapiMed formula with IP protection, and expands its sales to many more formulations of RapiMed drug and vitamin products. Considering Children's RapiMed alone would generate about $27.5M annually with merely a quarter percent of the $11B Chinese pediatric OTC market in 2015, the potential for an expanded RapiMed brand maturing in the broader Chinese OTC, Rx and vitamin markets is immense.
4. Expands RapiMed brand to other large foreign markets (e.g., Europe, Latin America, Canada, South Africa, India). With the revenues from RapiMed China, Scrips will have vast resources to fund RapiMed launches elsewhere.
5. Successful RapiMed launch in the $1.4B U.S. pediatric OTC market with similar product improvements (of course, the same expansion opportunities of the RapiMed brand in exists in the U.S. market).
6. Per the Q&A...Enters compounding pharmacies business. (Guts has posted good info on this type of business.)
If Scrips hits a home run on just #1, we longs would have much to celebrate!
Good luck to all the current and future longs. More savvy investors like you are recognizing this amazing opportunity and adding SCRC to their portfolios.
BSAV
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