RE:Projected Sales of $148 million for US assetsYes, these projections do look rather far fetched but their recent changes in marketing and detailing should improve their commercial execution quite a bit with fewer salesmen.
You may wish to review slides 11 and 12 in their Aug 2016 presentation, at which time they were beginning to implement some of the recommended changes in their marketing strategy..
https://ir.cipherpharma.com/phoenix.zhtml?c=176724&p=irol-presentations
As is obvious, by revamping their stales and marketing strategy, substantial latent value can be unlocked from drugs that have seemingly underperformed.
My own example is P2 sold by HZNP.
Annual sales in 2016 will exceed $200 million versus $15 million by Mallingcrodt in 2015.
Its all in the execution and correct marketing.
Lets take their cold sore medication sitavig.
There are four broad customer groups that drive the U.S. market for the usage of prescription cold sore medications.
Currently, sitavig is only sold to Dermatologists which are the most concentrated prescribers but represent the lowest volume.
Dentists and obstetricians/gynecologists are high prescribers with big volume groups. General practitioners are also high prescribers.
Focussed exclusively on dermatologists in the U.S., Sitavig generated $2M in revenues in 2016.
Cipher has been targetting $110M by 2020.
Refocussing their detail salesmen towards dentists, gynecologists and GPs, all with high volume prescribers ( about 15 times higher ), it becomes apparent that sitavig sales could reach $30 million by a simple extension of the sales practises to enclude ALL prescribing physicians.
Likewise, this revamped sales strategy is being applied to Nuvail which was one of the growth drivers in the portfolio bought from Innocutis.
Current revenues for Nuvail are around $3M but Cipher is forecastinge more than $30M US in annual sales over the next five years.
Cipher has 9 commercial drugs in its US asset pipeline plus two drugs pending approval.
A quick analyses of the US operations shows that, in the absence of interest and finance charges, those would have a net margin of about 15 % on $10 million US in sales ( current level ).
Already the number of salesmen have been reduced to 28 fom 33 and the new revamped sales strategy is in force.
Further, going forward, interest charges will be reduced to about $4.4 million US/year from $6.3 million US just for the first 9 months of 2016 ( $60 million of available but unused debt lapsed in June 2016 ).
If US sales can be boosted to $15 million US in 2017, the US assets will make a profit and at $20 million will make a very robust profit.
Will they be sold ?
Remember, they have good potential and will be sold without debt.
So, they should be able to get at least $25 million US and perhaps $30 million US for those assets.
With the Loonie forecast to go to $0.70 and with Trump having a favorable view of covering all Americans in a revised version of Obamacare, and the US healthcare indices at last moving upwards, they should have no problem getting these sold at a decent price
With all debt extenguished and perhaps $1/share in cash, the Canadian assets should be worth at least $15.
Buy when the blood is running