"...when times get tough projects get priorities or cut, MSB has...

"...when times get tough projects get priorities or cut, MSB has many projects going at the same time don't you honestly think they will turn the tap on and off if required."


@figures,

This is a very interesting point you raise, and one that I suspect is likely to greatly inform the narrative around MSB in coming weeks/months.

Whenever I look at buying shares in a company, I usually try to put myself in the shoes of the company's board and management, asking myself questions like,

"How easy (or difficult) would it be to manage this kind of business?"

And then, following on from that, the next question is:

"If someone magically gave me the company as a birthday present on the condition that I had to take on the role of Executive Chairman, what is there that I would be able to do with the company which would have a degree of probability of creating shareholder value, or which would be able to address any major concerns that exist in the market about the company?"

In that context, the issue you have raised about scope and potential for capital rationing is a highly relevant one, I think.

Indeed, it warrants noting that management appears to have already been thinking along these very lines for a while given the announcement, at the time of the release of the FY2014 full-year result, of the prioritisation of certain products, and the de-prioritisation of others as part of a preferential allocation of resources at the time. (Although, it must be said, to date this has not brought about any noticeable reduction in cash outgoings.

Problem is, because the US$120m pa MSB is currently spending is not itemised by product development stream, it is difficult to form a view on what savings are able to be derived from the suspending of certain programs.

The NASDAQ IPO Prospectus provides some proxy clues from the mandatory disclosure around the application of the funds being raised, and that is that the company's capital is already being deployed to a relatively targeted set of products (aGVHD, CLBP and rheumatoid arthritis/diabetic kidney disease), so where cost savings are likely to emanate from, is not clear


Do you have any thoughts what for project(s) it would make sense to - as you put it, "turn off the tap"?