RE:Stifel I had some time to scan the MD&A today. Let me know if I'm missing anything major, but my key takeaways were:
- Natroba strongly boosted product revenue. It only has 22% of the US market and that number should grow substantially from here. Licensing deals in other countries should follow.
- Natroba revenue was $5.5M for the quarter. They paid about $90M for ParaPRO, which comes out to roughly 4x revenue for the business. The ParaPRO founder is continuing as a business partner for Cipher and is now the second largest shareholder.
- As expected, a large chunk of the SG&A increase was due to one-off acquisition related costs (page 11).
- Licensing revenue from Absorica fell off a cliff (page 8).
- They still have $50M undrawn on the credit facility for more acquisitions (page 6).
- MOB-015 topline results are due in January 2025, although it's not looking good after they reported that the clinical cure in the blinded subset of patients was lower than their expectations (page 21).
- CF-101 isn't going anywhere without more capital.
- I'm trying to understand the drop in share price after earnings. It seems to be stabilizing around CAD$13. Maybe short term investors don't want to stick around for Natroba growth or additional acquisitions. Maybe long term investors are locking in gains now that they're transitioning to growth mode and taking on debt. The drop in September after the negative MOB-015 seemed overdone, in my opinion. Cipher's future prospects look favorable now with Natroba and more acquisitions via the remaining credit facility, but the growth will probably take longer than some shareholders are willing to wait.