"Hey guys,
Just wondering any projections when msb will start making a net profit ? Is it a long term thing ? Just a bit worried there Hopefully they can get some solid revenue in."
Kashmira,
For the valuation of the company - which surprisingly very few people talk about - revenue and profit generation is very important, so your question is very valid and prescient, and it is somewhat surprising that it has so far met with no response from any followers of MSB.
I, myself, am somewhat uncertain when MSB might become profitable and, if so, what the quantum of that profitability might look like; this issue is still a work-in-progress for me, so I cannot be of immediate or direct assistance to you.
But what I did come across today, coincidentally, was some research published last week - which may help answer your question - by Goldman Sachs' Melbourne-based MSB analyst, wherein the view is expressed that "MSB's earliest commercialisation opportunity to be in Japan for the treatment of graft vs. host disease(GvHD); potential market launch in late CY2015 on our estimates."
The analyst goes on to qualify the Japanese situation: "The revenue opportunity from this is small however, $A2.5m in royalties in FY17 rising to $5m in FY20, or c. A$0.10/share on 100% probability. Our focus remains on Heart Failure and Back Pain, which together compromise c. 75% of our risked DCF valuation. Based on clinical evidence to date, we assess the probability of commercialisation success to be low at this stage."
What I have also done below, however, for your edification, is summarise what various analysts are forecasting in terms of Revenue and Profitability over FY16 and FY17, based on most-recently published research, and I have also taken the liberty of summarising some other salient financial points, such as expected equity raisings over the foreseeable future, and target prices for MSB.
REVENUE
FY2016
Credit-Suisse (CS) = $18m
Deutsche Bank (DB) = $19m
Macquarie (MB) = $17m
Goldman Sachs (GS) = $16m
Baillieu (BL) = $823m
FY2017
CS = $81m
DB = $21m
MB = $17m
GS = $15m
BL = $659m
NET PROFIT (LOSS)
FY2016
CS = ($78m)
DB = ($98m)
MB = ($99m)
GS = ($82m)
BL = $581m
FY2017
CS = ($58m)
DB = ($114m)
MB = ($105m)
GS = ($51m)
BL = $408m
EQUITY RAISING REQUIRED
CS = $125m
DB = $NIL (Forecasts $140m debt raising over FY16 and FY17)
MB = $100m
GS = $100m
BL = $62m
TARGET PRICE
CS = $5.15
DB = $5.00
MB = $3.50
GS = $3.20
BL = $9.50
I need to add the caveat that I personally pay little attention to broking analysts at the best of times, but I am aware that, in the absence of an alternative information source, some people do derive a degree of value from published figures and opinions analyst from analysts.
So hopefully, this may be of some benefit to answering your question about the extent of potential revenues and the timing of profitability over the next 2.5 years. If not, apologies for the inconvenience.
Adam
(PS. The reason that FY16 and FY17 have been used for this exercise is that is the extent of analyst forecast horizons on each case. Had forecasts further out in time have been available, these would have been included for completeness.)
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