I thought in Japan they are already selling their products. There is no real cash coming from that?
@Lukasz ,
Remember that JCR only launched the product in Japan in late February, 2016.
So it has only been in the market place for a little over a year, so sales are probably still ramping up. But one thing I think can be safely said, and that is that royalties from Japan aren't going to be the solution to MSB's funding needs.
(Certainly not at levels of $50m pa to $90m pa any time soon, which is what some posters were bandying about on this forum some 12 months ago.)
As for the case balance being good fr 6 months, be careful to not assume that the company can run its cash balance down to zero; in the absence of any new partnership capital, MSB would need to raise capital once its cash balance approaches a level equal to its current liabilities (which typically sits at around US$25m). [*]
So, to work out how many months' of cash MSB has, you need to subtract about US$25m from the March 31 cash balance of US$69m.
Also, don't forget to add the US$3m equivalent which MSB as an R&D payment from the Australian government.
So, by reckoning, the maths looks something like this:
Balance @ 31 March = US$69
Add: US$3m (R&D receipt)
Less: US$9m (cash consumed during April)
=> Current Balance (@ 30 April) = US$63m
Less: US$25m (Prudential buffer to cover current Liabilities)
=> Net available Cash = US$38m
@ Cash consumption run rate of US$9m per month, that leaves 38 divided by 9 months,
i.e., a little over 4 months' worth of cash
By the time MSB reports its full year results, it will probably need to raise capital again
(unless, of course, it secures a partnership agreement between now and then)
[*] Evidence of this is management stating in July last year that the company's cash balance - of US$80m at the time - was enough to provide operational runway for 12 to 15 months. Yet they raised capital less than 9 months later (and that was even after they placed some $23m in new stock to Mallinkrodt in the intervening period.
(20min delay)