Decided to sift through the sales figures for Arixtra and I really like what I'm seeing. Below are the last six quarters to get a snapshot of the growth and I have done a back of envelope working that I will use as a guide for myself and please feel free to add to this if I have missed something glaring, sorry this is a long post.
GSK Figures:
> 2nd Quarter 09 US$52m sales in USA US$35m sales in Europe US$8m sales in Rest of World
Total = US$95m total sales for quarter
> 1st Quarter 09 US$47m sales in USA US$32m sales in Europe US$6m sales in Rest of World
Total = US$85m total sales for quarter
> 4th Quarter 08 US$52m sales in USA US$35m sales in Europe US$4m sales in Rest of World
Total = US$91m total sales for quarter
> 3rd Quarter 08 US$42m sales in USA US$35m sales in Europe US$6m sales in Rest of World
Total = US$83m total sales for quarter
> 2nd Quarter 08 US$31m sales in USA US$34m sales in Europe US$6m sales in Rest of World
Total = US$71m total sales for quarter
> 1st Quarter 08 US$38m sales in USA US$28m sales in Europe US$4m sales in Rest of World
Total = US$70m total sales for quarter
It looks as though the credit crunch hit them finally in the 1st quarter this year but they sprang back in the second. As we are only to sell in the USA first up the total sales there over the last year were US$193m. Using the lowest guidance given in ACL's Investor Presentation in March I've scratched out the below:
40% market penetration (very low, I post something a while back that stated US generic uptake was more like 60 - 70% at present) = US$77.2m total sales
30% of total sales equals ACL's profit (see presentation, lower percentage chosen) = EBITDA US$23.16m = AU$28.5m (all approx and I gather by ACL stating the 30% profit, it's EBITDA??)
This is strictly back of envelope please remember. I decided to use 168m shares on issue (to include oppies) and came up with:
$0.169 eps, so heck let's lop off 30% tax and get $0.118 eps. Please choose your own PE ratio 8x, 10 x 15x ???
As I said this is rushed and obviously is solely dependant on FDA approval and DR Reddy's ability to get the market share stated. I have no problem at all about DR Reddy's ability and I believe that FDA should be a smooth sail also, we've had many years to get this right and Reddy's doesn't stuff around. Oh and I used everything I could to lower the outlook above:) Gluck all and remember we will be entering Europe in just over 2 years so those figures will come into play and help with higher PE's, not to mention everything else in the pipeline that could blow the above figures sky high. GO GROWTH STOCKS:)
ACL Price at posting:
33.8¢ Sentiment: LT Buy Disclosure: Held
(20min delay)