ACR must be the standout pick among biotechs on the ASX. Current market cap around $370 million significantly undervalues the company. 1. This financial year likely to receive milestone payment from Eli Lily of $87 million for FDA marketing approval of Axirom 2. Testoserone replacement market currently around a billion dollars per year and growing at 20% a year. Not sure what royalty percentage is but based on Biota's Relenza probably around 7%. Axiron likely to capture significant percent of market based on trial results and easy application compared to other delivery mechanism (e.g. injection)with likely patent protection till 2026 3. Research indicates potential application to other conditions (obesity, type 2 diabetes, metablic syndrome) 4. Deal with Eli Lily to market companion animal products another source of revenue 5. Anticipating royalites from Ellavie (menopause treatment) of 15 million a year. 6. Other drugs in pipeline e.g. Testoserone MDTS treatment for low libido in women already in Phase 2 trial 7. No debt and anticiapting payment of dividends this financial year based on FDA marketing approval for Axiron
Management seem on the ball, especially compared to Biota. I managed to ride the Biota wave from around $1.30, and got out most around $2.50. Failure of Biota management to strike a deal with Big Pharma for LANI (influenza treatment) during the recent influenza scare,indicative of their incompetence especially when compared with ACR
ACR Price at posting:
$2.35 Sentiment: Buy Disclosure: Held
