RE:RE:RE:RE:Presentation is a good signI wouldn't take the employee count as something that would get immediately reflected. It's definitely going to be a lagging indicator. But according to the Dec notes, that cost cutting was going to happen. Only way to do what they say they're doing. If he's saying EBITDA positive by year end and profitable beyond, he can only do it with a healthy dose of RD cuts and SGA cuts, plus revenue growth.
That model I threw up had an average of $4mil cuts to RD a quarter, average of $1.5mil cuts to Gen/Admin and flat selling costs (which you could probably cut if you wanted to). RD's around $36mil and SGA around $50mil so plenty to cut without having revenue effects and having plenty of people there to do what needs to get done. More of that could be back-end in the year as opposed to front-end, those are just averages. That gets them to breakeven. It's already known that the 2022 numbers have two large non-cash writeoffs in there that will make it look worse, but are one-off non-cash losses that will save them cash this year (Euro shutdown and the EGRIFTA inventory write-off. Total around $10mil for both which won't repeat this year).
I think what SPCEOs been saying about them using 2022 to writeoff or front-end charge whatever they see needs writing off - other RD, some of the "redundancy" charges even though they'll be paid over a longer period, etc... , so that 2023 and beyond isn't affected will be done too. The majority of all that will be non-cash and just clear out the balance sheet so various asset charges don't drag down future earnings. Typical kitchen-sinking to make for cleaner and better future years. Some will have a cash effect, but they can deal with it as long as ongoing costs are cut, which they will have to do.
Analysts will probably applaud all that like they basically have so far and it's the path forward to helping the market value it like any other $90-100mil revenue 15% grower. That's Pauls object to get to $1.50 ASAP and the $2-$3 level next year. He's not, nor should he, count on any pipeline assets. Those will be managed in low cost way and play out based on whatever they see in the data. He won't hope to be lucky with it, just try to execute it without affecting the financial path to get to $2 and beyond based on numbers.
SPCEO1 wrote: Since they are not making a formal presentation to the conference, they would not PR it. But almost all Healthcare companies are there every year - it is where deals get done.
SABBOBCAT wrote: Did they announce they are going?
SPCEO1 wrote: The timing of the enw presentation is almost certainly related totheir going to the JP Morgan Healthcare conference this week and meeting investors there.
SABBOBCAT wrote: The fact they actually put up a new presentation very quickly into the new year vs. waiting to use the post earnings presentation is a healthy sign. Typically management would have likely sat on their hands and waited. This uncharacteristic effort tells me they are not only planning for the future but also are going to get out there and try to sell a story. The question is what are they trying to sell? An OO #2? Partnership? The whole enchilada? Only time will tell, but they are likely on a bit of a fishing expedition to see what they can get.
I'd like to think the shift was driven by a tap on the shoulder from large investors (Soleus?) and the BoD saying "enough is enough, time to drive value or we will find someone that can". And I don't think this is uniquely aimed at Paul. He is growing sales, but there is no flow through from any work to the share price. My guess is that if no value enhancing deal comes between now and May, Dubuc will be the one sent packing.