RE:RE:A valuation update.Wow Scott! Once in a while you remind me why I value your contribution here so much. Next time I'll just have you proof read me. ;-) So answering point by point before I integrate this to my own version.
1) I stated that the 1 Ml will only be available by late 2017 early 2018. And that there's going to be 400kl of plasma fract capacity until then. Hematech may not have broken ground but as you know things could go pretty fast in Asia. If I recall correctly, it took WIBP/CNBG about a year to build it up and making it all operational from scratch. I've been told it takes Hematech more time because they have to adapt the CNBG plans to the verticality of their Taiwanese situation! :-) But that it could go pretty fast once the plans are done. I don't worry a lot about pre 2018, since most protein-indications will not be approved yet... Yeah Pg-T1PD will pay all the bills, and more, on its own by late 2016. But it's just a preview of when Pg-Wound @ 1Ml will be OKed.
By the way I may be wrong but I expect Laval to be use as a small batch lab for all other proteins development, and as a showcase, as soon as Winnipeg Taiwan and Russia are up and running. That was the plan when they launched it anyway...
2) A slide from last AGM and Q3 CC suggest that AAT, IVIG and Fg-API should be ready for the 2017-18 time frame. We will see. I suspect FDA should be quicker to anser for AAT and C1-INH as the US market seems to be undersupplied , which is not the case at all with IVIG. Anyway, the bulk of the 2018 6B$ is the 5B$ Pg-Wound. And I got that feeling that the FDA will really want this to save pateints from amputation really fast. (Especially considering their already very favorable help with regard to Pg-T1PD). And you're right the target for these proteins approved and plant up and running is 2018, that's why I focused on that. Yeah we may be late a few Qs. Beau dommage! I'll put a 20% discount on that 40$ figure then! ;-)
3) Especially for the case of Pg-Wound I really REALLY doubt that there will be a slow sales rampup. I mean,this is the US market man! No doctor will risk getting sued for an avoidable amputation the moment Pg-Wound is around. This treatment is not for that obscure condition, it is pretty spectacular. It will get known overnight me think. For all other protein-indications I expect a 2 years ramp-up. It might get better than that for really under-supplied market. Which are most orphan ones, right ? So no or few competition and dire need, right ?
4) CMO margins. Well... I've once heard Pierre say that Pg margins were above 99%, my guess is that the cost per protein is about 10-30$ per litre. (Large part of these cost being our own resin by the way). CMOs margins are on the *cost* not on the sales price. And supposed to be about 30%. So, say, between 3$ and 10$ /l. So between 1 and 3% for the lowest priced proteins at 300$/l, and totally insignificant for Pg and C1-INH class proteins priced at above 3000$/l. I already planned for average gross margins in the 75-80% area (including ARC 12% royalties and OMNIO ~5% one). I guess that should be more than enough...
And *anyway* all my numbers are based on 20% net margins (and 30% free cash flow). After cost of management, sales, R&D, interest, tax , depreciation and amortization, which is a "good player of the industry" average. I have received comments from more enlightened fellows that my numbers might be conservative. They are! That's the purpose of the exercice, to find a floor SP target..
We will see! :-)
FD