Q2: No real surprisesQ2 results held no real surprises for me. Cash burn rate was signalled and revenues were supposed to track those of 2016. On the cash burn rate, we have to be realistic that PLI is preparing for commercial launch of Pg followed closely by that of IVIG. Consequently, major investments are required at both at the Laval facility and out in Winnipeg. I am also guessing that the belleville operation is being converted to a fill/finish operation. So either we get ready to launch these plasma proteins or we don't. In my mind, there is no regulatory risk. Both Pg and IVIG will be approved (IVIG only has to prove bio-equivalency). Once IVIG is approved probably in H1 2019, PLI will be cashflow positive and in the black.
I was a bit surprised to see only $14M in cash and accounts payable much larger than accounts receivable. nevertheless, the recent financing and closure of the SRAM deal have improved the B/S. PLI should have sufficient cash for the next 6-9 months.
The challenge for PLI is clear. How to finance operations and the cash burn rate until IVIG is on the market (the famous wall of revenue). Clearly growing resin sales and the build up of Pg related revenues are going to be welcome but still there will be a funding deficit. In my mind, the only way to address this deficit will be to sign 4050 partnership deals. In this respect, I am waiting to learn from today's conference call what partnerships SRAM will deliver in China and the cash PLI can expect from them in terms of upfront and milestone payments.. In addition, as Stockbuphoon said, I am hoping that PLI will finally get a deal across the line with a major pharma in North America and/or Europe, probably on IPF.
Clearly, the pressure is on PL and the business development team. I'm confident that he will deliver a deal or deals. Time will tell. One thing is clear. I don't ever want to see another financing at current price levels.