the dream machine, page-16

NT made me howl with laughter.. Well done.

Dhukkie, you dont come round that often but when you do its always memorable, a couple of weeks ago i got someone in the states to run the nmbers on the 1B oXy Ann, here is the post for you so that it will help in understanding whats going on

Starts
"POH have never put a number on it. They have done some digging this week and this is what they have come back to me with.

This is not financial advice and DYOR.

Quote

"As per Dr. Esra Ogrus comments in the announcement on Monday, POH believe they have a reliable way to deliver this opioid pain medicine in a safe and effective way (and for that matter other opioids as well).

The branded product in the US (Oxycontin by Purdue) is an extended release oral form of oxycodone. It is approved for use in chronic pain and is given either 2 or 3 times daily (that is every 8 or 12 hours). It currently sells approximately $1.5 billion dollars in the US market, but its use has peaks and troughs in pain mitigation and has had issues with abuse.

Sales outside the US even add more, and by some estimations predict the total product sales as high as $2.5 to $3 billion US dollars. It is very hard to estimate with great accuracy because Purdue is a privately held company and do not always release figures. In any event it is a large product and an attractive market to compete in.

As has been seen in the Oxy 1B announcement on Monday, POH think the patch they have developed, can successfully compete in the market because based on the data seen thus far, it renders a slow release and a steady delivery over time. This may mean less euphoria and potentially, it will be less likely to be abused because it is much harder to get the drug out of this matrix patch (for abuse purposes) without advanced chemistry (compared to the ease of an oral tablet).

To address your response of what POH can expect in the way of royalties and potential cash milestone payments, if this oxycodone patch makes it to market, we have to consider when they partner it to a marketing company. Ie Timing is critical.

The earlier they partner it, the less they get. That is because there is still risk left in the development and the partner pays less when they assume more risk. However, partnering earlier helps takes the cash burn of development out of POHs responsibility and puts it in the hands of the partner. With a small bio like POH they would want to partner early to free up cash flow.

Therefore, it may be beneficial to partner earlier, if they can find the partner with the right expertise and commitment, who is willing to partner at this stage.

Based on other benchmarked deals in the pharmaceutical industry and the development stage of Phase II, one could envision an arrangement with a tiered royalty of 5-15 % based on total annual sales plus cash milestones in the range of about $100 million dollars in total, these cash milestones that POH always talks about would be paid in increments on completion of a development event such as phase II, phase III, or a filing, or upon approval etc and so on.

The upfront payment on contract signature could range from about $3-10 million dollars (estimate about middle of those two figures). These figures and deal structure would all be part of the negotiation of the agreement and may vary based on perceived risk and how much is paid in cash vs. royalty. So in essence the more they get up front the lower the ongoing royalty.

The actual sales of the product could range between about $500 million to well over $1 billion dollars or more per year (this is also dependent on the indication and label given by the Regulatory authorities, and the marketing program put behind it. )

So what does this mean ? It means that if the oxycodone patch is partnered and successfully developed, POH should be rewarded well. However, there are no guarantees as they have just completed 1b, albeit the results seemed to be exceptional according to Professor Guy Ludbrook who said The ability to reach therapeutic oxycodone plasma concentrations from a transdermal patch is a major achievement, and the sustained blood levels of this drug appear very suitable for
chronic pain management, That said this program looks extremely positive at this point.

Based on a successful launch of the Oxycodene product in the US, Europe and Asia, the value per share should be 0.75c to $1.00 on a normal PE ratio in Australia. Should POH redomicile itself onto the Nasdaq in the future it could be double that, as PE ratios used in North America are much higher, and the access to the US instos alone would bring about considerable multiples for each share as well as liquidity. Note: other Australian companies in the medical sector are doing this already.

There still will be both development and regulatory hurdles to overcome, but they have created a potential product that will have benefits in the marketplace, if successfully developed.

Please note we have only looked at it from the point of view of Oxycodene.

Beyond this product POH has the TPM base technology platform that they have begun to apply elsewhere with positive results. There are other pharmaceutical applications that they are now pursuing as well. I feel that POH has a positive outlook and that compared to other companies they are very undervalued in the marketplace, as they are dealing with Drugs that have been widely used for many years.

I am very positive and bullish on POH, but only you know if your financial position allows you to take the risk and invest more or not."

Ends

So Dhukkie, thats for OXY and TPM

Now i am sure you know the rest of the pipeline


And in regard to the value, nobody really knows the OXY market, but when the Duragesic Transdermal patch came out sales of the patch went from $0 to $2 billion in 5 years just for the patch, so as with every revolution (think sliced bread) it can be $0 sales one year, and billions years later, i wouldnt mind owning Tip Top bakeries would you??????????

DYOR

WL