Share Price Moving too slow? I think if we look at this company in a different way we may be able to appreciate what the potential is here.
The market that Absorica is chasing in the US is worth $500 million annually and growing close to 10% per year. Every 2% of market share is worth $10 million in gross sales and about $1.5 million in royalties to Cipher. $1.5 million / 24.4 million shares out = $0.06 per share. I would assume that most of that $0.06 would drop to the bottom line before tax. Better yet, assume that the growth in sales for the other products covers the cost of generating the royalties from Ranbaxy. Applying a tax rate of 33% gives us about $0.04 in eps after tax. Therefore in my opinion the $0.04 per share profit should be valued at 20 times earnings so that every 2% incremental increase in market share should be worth $0.80 in additional share price. They were at 2% at the end of December and 4% market share at the end of January. What's their market share now?