Well, one thing is very clear to me, and that is that you are very negative on this deal. I for one think a number of your concerns are unwarranted.
Like many of us on HC I had never heard of ITF Pharma, or even their parent company Italfarmaco. Unlike you though, a brief investigation into who they are and what they do reassured me that they are probably a good match for us. I really do not understand why you think they are unable to market vivagel effectively.
"Women’s Choice Pharmaceuticals – a division of ITF Pharma – is focused on delivering the highest-quality products within the Women’s Health Care and Urology Markets."
So not only do they already specialise in women's health products, but also urology. Sounds a pretty good fit... Why are people worried they won't have the ability to market our products??
Digging a little deeper, some people have mentioned that they don't have enough experience in the prescriptive medicine space, and that selling "vitamins" is not an appropriate background for selling our product....
And so given the concern that is being aired over ITF Pharma's ability to effectively market and sell our product, I can only assume that the above products are not well represented in the major pharmacies...
I seem to recognise a few of the names there... I wont searchsIthe remaining products as I think I have made my point.
I have no problem with the choice of a smaller pharma company to do business with. As other posters have mentioned, rather than dealing with a massive international big pharma corporation for whom Vivagel's revenue would be a drop in the ocean, we have instead partnered with a small company for whom the outlays mentioned are a big deal. They will be much more motivated to make this partnership work, and need to maximise their return on investment. If vivagel was to fail for them, that would seriously impact their business. If vivagel was to fail for a big pharma company pulling in billions in revenue per quarter, it would still sting a bit, however it is not going to be critical to their future. IMHO ITF Pharma will be looking to launch ASAP, they have already indicated they intend to hire more sales staff to expedite the process, they have an existing sales force experienced in not only women's health but urology products as well...
Well the proof of the pudding will be in the eating as they say. I have seen no reason to believe that ITF don't have the potential to be a good partner going forward, and I personally am just as happy with them as with Mundipharma.
I also disagree with your assessment of the revenue we will receive, however my memory of what JF told us in this regard is a little hazy (was it at last year's AGM she was talking about the high margins we could expect on vivagel?) and so I will leave it to other HC posters to comment there (AB do you remember?). So we know from the announcement that we will initially be providing the Vivagel to them (and this is where I seem to remember JF saying that there is a very healthy margin on the initial sale?!) and then on top of that we get tiered double digit royalties on sales (and yes I would imagine this is on ITF Pharma's sales not the "final product sales" as you put it. IMHO the price the pharmacies choose to sell at is largely irrelevant to us. Some will choose to sell it cheaper and rely on high turnover and others will choose to sell it with a higher margin and they are not likely to turn over as much volume. All that matters is how much revenue ITF Pharma pulls in, as that is what our royalties are tied to. So with our margin on the product (or what would be a licencing fee or similar if ITF get FDA approval to manufacture I would imagine) added to a double digit royalty, I doubt very much we would be getting as low as 4% of the average retail price.
SPL Price at posting:
$1.36 Sentiment: Buy Disclosure: Held
(20min delay)