back of the envelope valuation., page-5

Assuming:

Max current production is 10,000 units per day.
Future production to 100,000 units per day?

Oraline is US$7ea rrp
Distributor gets 40%
Retailer gets 30%
SB gets gets 30% or US$2.10ea
@production cost is US$0.50ea => SB Profit is $US1.60.
PE = 10
#shares = 184m (not counting options!)
MC (6/12/2007) = A$18M


CURRENT PRODUCTION/Share Price:

10,000/day for 240 days/year = 2.4m units produced x US$1.60
==> profit = $US3.84m/an

@PE of 10 => MC = US$38.4m

sp = US$38.4/0.9(FX) = A$42.7m (for Oraline only)
==> sp = A$42.7/184m = 23.2c



NEW PRODUCTION (given 6 - 12 months to build new prod cap):

@100,000/day for 240 days/year = 24m produced x US$1.60
==> profit = $US38.4m/an

@PE of 10 => MC = US$384m

sp = US$384/0.9(FX) = A$426.7m (for Oraline only)
==> sp = A$426.7/184m = A$2.31c


So, even with some conservative numbers, the sp is A$0.23c TODAY and A$2.31c in 6 to 12 months.

NB: This assumes FDA approval, sales to China, Mexico, Europe and in the US and production is still in the US. However, this kind of production would be more profitable in China, so there is plenty of upside potential too.

IMO of course.