Hi everyone ...
After belatedly reading the questions and answers following the briefing
[see them here] it seems to me Next Science is about to be renaissanced - a new start!
...Even better, a new start along the lines of the
first start many were expecting after the IPO.
(If you look at the price chart you can see there was a big jump off the ASX diving board then a painful belly flop).
To give a little background for anyone new out there (based on personal observations after loosely following the company from around the time of the IPO)
WHAT IT IS:NXS products are based on Xbio - a natural, multi-patented ‘ingredient’ that offers a solid alternative to antibiotics in treating bacteria and fungus (including golden staph and plenty of other antibiotic-resistant bugs ).
I understand there are no competing products with the same efficacy
and the same approvals currently in the market.
You can use it in sprays, on acne, in surgery, on burns, ulcers etc and it has this *kapow* ability to even break through ‘biofilm’ - the resistant bacterial ‘scab’ that forms on many wounds and makes them difficult to treat.
PAST HISTORY TO IPO :The tech is US-based but Next Science was listed in Australia because around a decade or so ago Sydney rich lister, Lang Walker, became a patron of the company. ( He and his investment advisor Bruce Hancox, are well connected public-company ‘smooth operators’ )
(This 12 minute Qantas ‘Talking Business’ interview with CEO Judith Mitchell, from May 1, 2019, usefully describes the background of Next Science as well as giving clear description of biofilm and more
https://omny.fm/shows/talking-business/judith-mitchell-ceo-of-next-science.
It partly explains Morningstar
[updating its valuation] on May 10, 2019 to $2.67 when all looked bright and new.)
Not bad eh?
NXS had even launched crowned with an exclusive five year global sales agreement with Big Pharma’s 3M for a FDA approved hospital grade wound treatment - BlastX.
WHAT HAPPENED NEXT?What could go wrong?
-A great line of products with more to come, and great mentors passing one great product into the caring hands of a global giant giving NXS a US$1 million prepayment head start as it launched on the Australian market?
......Murphy’s Law kicked in with a vengeance (despite that I think that is Irish and 3M’s tartan motif denotes a Scottish heritage).
3M turned out to be in the throes of buying another global giant with a silver-based ‘alternative’ to BlastX, and as soon as the nine-strong NXS handover sales team left*, 3M seems to have unfortunately ‘mislaid’ the 24 key customers who were buying BlastX.**
(*NXS had already let go of 18 direct sales staff once the 3M agreement was signed -at a saving of around US$2.6M according to the IPO information {this number is of relevance to the 200 sales folk now retained to impel the renaissance of NXS via the returning BlastX, new product Xperience, and more })
... So, soon after the IPO, things started being not-so-good at NXS..
Some larger early investors seem (retrospectively) to have been looked after with pumps before their escrowed shares were released but sales plummeted ..... and, all up, that which had belly flopped had lead weights added to its’ bathing suit especially after Covid came along to close down all elective surgeries.
Anyway as a potted history the above obviously leaves gaps and may not be very objective, but it also leads directly into why the questions and answers after the briefing were so exciting (for me at least);
3MIt turns out that 3M had firstly blocked BlastX except to outpatient clinics, then, from April through to December last year it had ‘sequestered’ the relevant sales people at home due to CoVid19. (Elective surgery in the US had been closed down which was a reasonable excuse for the sequestering I guess).
So NXS recently formally stepped out of the 3M contract, and will regain control of BlastX this Aprl.
What then?
Two hundred (hopefully well motivated) sales people have been marshalled ready to act!
From the Q & A
[here’s the link again];
(Judith to Martyn Jacobs of Cannacord) “The first thing we're actually going to do next month is actually lift and shift the existing business lines that have been through 3M.
So all of the VA customers ( we talk to them from our original business in 2018 ) all come back to us, all still doing business with us.
So first line into the revenue shift is that revenue, obviously, moving from .... back from wholesale price that we were with 3M to retail revenue values......
Elyse Miriam Shapiro, Bell Potter;......just on to BlastX, building out that internal sales force, will that sales force be up and running by April when you get BlastX back into your hands? Or do you think there's going to be a lag there? ...Just to get an idea of when we can expect to start to see that coming back? Judith Mitchell;...No, I expect we'll be able to deal with it from April.
These are customers that we already know. They're already in our system.More importantly, we're already in their system, the majority of which are VA hospitals.Probably 85% of the customer base that 3M handled were the customers we gave them and the VA customers.We've already talked to some of them.They're happy to come back, and we've lined up kind of the back-office processes to be able to go forward.Our letters all go out to the customers in the next 2 weeks to bring them back into next science.The VP of Wound Care, our new appointee, starts on Monday.
He'll be in the Jacksonville office on Monday, along with 3 additional new area sales directors for the surgical business.
So we're expanding our sales footprint across second quarter, particularly, to be ready to build out that revenue for the second half....”
Anyhow based on thinking about that the base value for BlastX sales without the 3M prepayment seemed to be just under $400,00 PA
(is this right please
@SimonGr ?)
spoiler: Charts of earlier sales figures for NXS products
Beyond freeing BlastX from 3M constraints and having a clear plant forward, there is much more of interest in this presentation and the Q & A but that’s a start
Cheers
cheers
(20min delay)