AGM PerspectivesI wasn't able to access the slides yesterday but managed to do so this morning. Frankly, I was impressed with the amount of detail provided re: clinical, production and financial milestones. I also believe that the timeframe of the various milestones seem realistic, although it is clear that some trials like diabetic ulcers are going to take much longer than we were led to believe at last year's AGM. However, I would rather PLI takes its time to get it right to ensure market domination in this huge application.
The Pg related material provided a glimpse into the Pg franchise. It is going to be massive and based on the Omnio patent what we see is only the tip of the iceberg. in addition, PLI is developing other apps of Pg not covered by the Omnio patent such as acute lung injury. Indeed, I also get a sense that Pg and 4050 combo will be a winning one in addressing fibrosis related diseases. Pierre put a value of $8 Billion on Pg based on the applications presented which equates to almost $12/share. As clinical trial results are reported in 2018 on acquired deficiency and wound healing, there is no doubt that the sp is going to respond and respond strongly.
Similarly on 4050, 2018 is going to be chock full of clinical trial results from the various placebo contolled studies. If positive these should drive the sp and help spawn partnership deals. With 4547 and 4525 moving to clinical trials, the SMT pipeline is very full, offering enormous potential.
A bit sobering was the roll out plan for the PPPS division and the related revenue picture. If I remember correctly, based on 400 000/l/yr capacity the company will have the ability to produce around $700M annually by 2021. While we can expect an improving revenue picture each year, it is only by 2019 that PLI will become cash flow positive on a year on year basis, although it looks like revenue could exceed costs for Q4 2018.
As everyone expected, PLI will need to raise money to cover its cash spend in 2017/2018 and ensure a strong balance sheet. Pierre indicated that partnership discussions were being held with some 20 companies and hopefully a couple of these will get across the line. There is scope for a pediatric voucher but let's see if PLI actually scores on this one. What impressed me is that Pierre clearly said there will not be a public offering at today's low sp (too bad for the shorts) and that efforts would be taken to get the sp back up to where it should be. Let's hope he delivers and delivers soon. But based on the fundamentals so clearly presented, the size of the markets being targeted, the success of the clinical trials to date and the infrastructure that is in place, there is no doubt in my mind that the future is golden.
Given that Canadian institutional investors do not seem interested in healthcare sector, I certainly hope that the sp can get up to the $US3-4 soon so that, PLI can initiate a NASDAQ listing. I've always been against a reverse split but I now believe that PLI should proceed with one, if the conditions are right and the window of opportunity presents itself for a NASDAQ listing.