Hi Guys
With reference to my last post, now I get permission to post the whole email reply from Wayne. I hope it can help clarify things and also help avoid any misunderstanding. Cheers.
Nihao Tommy
Thanks for you email , I lived in Shanghai (Pudong) from 1998-2000 and was there for Roche, I love the city and the country and have a lot of good friends in Shanghai and Beijing.
I would like to reassure you that we are reviewing all costs and strategy, and I intend to report to the market in the near future with regards to your specific questions.At the moment as new Chairman I am taking the required time to review with the board all aspects of our business model and cost structures. As some of these are price sensitive I cannot comment on them at the moment. Certainly we will take a very strict and measured view to our cash utilization moving forward. However the current resource utilization must be seen within the context of the companies commercial lifecycle. As an investor myself I expect/demand and place shareholder value front and center to anything else. The only way to achieve this is through diligent management and well considered investments and decisions as well strict controls and metrics to manage resources.
I can say that Admedus has amazing potential , with a lot of opportunity across its different businesses.Admedus is very early in its lifecycle, and as such is in investment mode. Having said that Management have built a very lean and efficient global footprint. We are competitive within the market on what I would consider is the minimum investment to ensure commercial success.I have worked in Global Pharmaceutical companies for 25 years and I have not seen a more efficient global structure in terms of sales teams. Management have done a very good job to date - they have built a global footprint with limited resources (relative to major companies ) and have ensured that Admedus has many legs to the chair. We are not dependent on any one business for success and have muliutple “shots on goal” within the more speculative areas of our business.
I appreciate that there might be concern , however the cash utilization must be seen in the context of the overall business potential in the years ahead.At the same time we need to ensure that we have enough resources to be competitive within the market.As I mentioned our overall structure is very lean, and appropriate. In my observation many of the staff are working far more hours than their pay checks would otherwise warrant,such is the level of motivation within the organization. I am sure you can relate to that from your own working life (what level of motivation is required to go above and beyond what is expected). I see this quality consistently across the organization and across the world in our company. Its one of the most critical factors to success , and speaks to the company culture as well as the validity of the commercial opportunity.
I have invested in many ASX health care companies over the years and have often felt the frustration of poor management and poor communications. This will not be the case with Admedus. As for cash burn , again I have seen other companies collapse through ever decreasing capital rounds on the ASX with no prospects of revenues and even been caught myself as an investor in those situations. Admedus is not that company - we raise and invest to generate revenue, support development and build our capacity. Our commercial path forward is clear and obviously we already have ever increasing revenue streams. Capital increases must be seen in the context of the ROI , the key question is always for every dollar invested what is the future return on that dollar. Some companies on the ASX have not been good at this in the past and as such I appreciate the concern of investors. Be assured I have spent my whole career managing ROI , and with the CEO and board we look at Admedus through his lense. Any potential capital raisings will add future value to the company and your investment. Building a global business in a sustainable and fiscally responsible way however is a marathon , not a sprint. Dilution is always the concern of any investor, which I understand, but this must be put in the context of the longer term value proposition. If one has an investment window of 6 months , that is probably not the right approach for a company like AHZ (or many public companies that are early stage for that matter).
Admedus was a small Australian company with big potential globally. To achieve that ambition we must take calculated steps, and manage our resources responsibly. The balance is that if we invest too little , then it will take a long time to scale up. There is also a limit to where investment becomes redundant (i.e. additional investment will not accelerate our progress or add incremental benefit). I have spent my whole career managing resources around the world in this type of scenario and am confident that we have the right level of investment to get the job done.
My ambition and that of the board and management is to build a world class and scalable healthcare company many times bigger than what we have today, that is sustainable and profitable. We have some way to go but the fundamental building blocks are in place.The current scale and revenue is only the start of what the portfolio is capable of yielding for the future. On top of that of course we have and continue to build further revenue generating assets through our portfolio development.
In spite of share price fluctuations in the current environment (which must be viewed in the context of the problems in the global markets especially the NASDAQ which have a negative affect on stocks like AHZ) we are in a solid position to capitalize on the multiple revenue opportunities ahead of us. One thing you can be sure of is that nothing is “random” with regards to how our resources are managed, and we have very strict metrics in place to monitor performance, and resource utilization.
I look forward to earning your trust and support in the future.
Best regards,
Wayne
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