Looking at the Bell Potter's report on what pediatric GVHD can generate when FDA approval is obtained, the following is the projection for 2020 based on 50% of 300 patients, although I would think that it be earlier:
Cost of treatment $250K (BP estimate cost) x 150=US$37.5M
Cost of treatment $300K (SI estimate cost) x 150= US$45.0M
hence the quarterly revenue is anywhere between $9.4 -11.3M, then adding the Japanese market, where the Jan-March 18 revenue was 990K, you will have a fair idea of the revenue generated. The revenue excludes any other royalties to be received which could up the revenue further.
This is certainly not a big source of revenue and one still has to factor in the provision for repayment of the interest/loans. The Hercules loan is based on a floating interest rate, at time of the agreement the rate was 9.45%, however with the rate increase in US, the rate as at 22/3/18 is 9.7%. The principal repayments for the first drawdown commences in October 2019 and interest payments on the $35M drawdown have commenced in March 18.
GVHD was never thought to be the big ticket item, the FDA approval will certainly serve as an impetus to partnerships and following that with the approval of the CHF, CBP, RA etc which are the $Billion revenue earners we can see the full potential of revenue and profits.
Volumes have remained low in both the US and Australian markets and understandably because fund managers are a bit cautious. In Australia, there is usually a bit of window dressing prior to the end of the financial year and the switches could take place in the coming months. Looking at the price range it would appear that the lows have been around the $1.45+ for a few months now and this is as bottom as it can get. I am not really concerned about the shorters as the low volumes. narrow price ranges and the positive news we have had with more to come make it risky to short.
There is a lot happening and I am sure that the long term holders will have reason to smile by the end of this year.
MSB Price at posting:
$1.56 Sentiment: Buy Disclosure: Held
(20min delay)