Crescita Therapeutics Inc T.CTX

Alternate Symbol(s): CRRTF

Healthcare Biotechnology

Crescita Therapeutics Inc. is a commercial dermatology company with in-house research and development (R&D) and manufacturing capabilities. It offers a portfolio of science-based non-prescription skincare products and early to commercial stage prescription products. It operates in three segments: Commercial Skincare, Licensing and Royalties, and Manufacturing and Services. The Commercial Skincare segment manufactures and sells branded non-prescription skincare products for the Canadian and international markets. It also commercializes Pliaglis, NCTF Boost 135 HA, ART FILLER, and Obagi Medical in Canada. The Licensing and Royalties segment engaged in licensing the intellectual property related to Pliaglis or its transdermal delivery technologies. Manufacturing and Services segment engaged in the sale of topical products manufactured to client specifications under the Company’s contract development and manufacturing organization infrastructure, and product development services.

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Crescita Therapeutics Inc

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Comment by TheRock07on Sep 11, 2016 9:20am

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Post# 25225970

RE:Estimated North American Pliagalis Sales

Lets finalize debate here on Pliaglis.

In 2013, Pliaglis was distributed in the U.S. without a sales force to actively promote it.
Distribution and manufacturing were by a third party.

Annual royalties in 2013 for Pliaglis were $118,000 representing about $9.5 million US in sales @ royalty of 1.25 %.

In early 2014, Galderma started promoting Pliaglis in the US with a small sales force.

Sales peaked in 2015 when Pliaglis royalties amounted to $228,000 or annual sales of about $18.5 million US.

Royalties in Q1/16 were $42,000 representing annual runrate sales of about $13 million US.

By Q2/16, royalties had dropped to just $9,000 representing annual runrate sales of about $ 3 million US.

Obviously, subsequent to Q4/15 when CTX reacquired N American rights to Pliaglis, Galderma stopped active selling of Pliaglis.

Based on Galderma sales statistics, and adding Mexico and Canada and assuming a limited sales effort, Pliaglis sales through a second party distributor should be in the $10 to $15 million US range.

If CTX were to actively sell Pliaglis through a small sales force a la Galderma, net sales would be above $20 million US but probably not above $25 million US.

Options for Pliaglis sales in US, Mexico and Canada

1.....manufacture Pliaglis in its newly acquired plant, and distribute through a second party. Manufacturing should boost revenues by about 40 % , which would impute net sales increasing to the $15 million - $18 million range in CAD.

2...Manufacture Pliaglis but license to a senior pharma and receive royalties, upfront cash and maunfacturing fees ( the same as Nuvo has for P2 ).

In the latter case, annual sales/ revenues would depend critically on selecting the right pharma to out license.

As we saw with P2 , Mallingcrod did a very poor job.

HZNP acquired P2 rights in late 2014 and US sales of P2 have increased 4 fold to a run rate in excess of $200 million US.

I suspect that CTX will adopt a version of the P2 model ( option 2 ) which Nuvo has with Horizon.

If a partner with a strong sales force is selected, I suspect that Pliaglis sales in North America could reach $ 40 to $50 million US.

With a robust royalty rate of say 5 to 10 %, $5 million in cash upfront and a maunfacturing contract, annual revenues would be leaner but with much higher margins than second party distributorships.

Valuation wise, both sales models, if judiciouly outlicensed, could see fair values above $5 per share.