Posted by Livas1, hope he doesn't mind me doing this.Hi...

Posted by Livas1, hope he doesn't mind me doing this.

Hi everyone

Im not sure what has been posted and frankly i don’t have the time atm to read what has... so here are some random thoughts on tonight.

The first thing for me is that I have a very strong inkling that pricing will be announced very soon. I would say the end of next week the latest. This wasn’t explicit in the meeting but just what I observed from a few throw away comments.

They need to get the corporate structure right before being able to sell into Russia. This involves setting up a corporate entity somewhere in Europe (probably within an EU country I would imagine). They, along with their advisors BDO, have selected a structure, and this will be implemented shortly (it will be done by the AGM at the end of Nov.. and IMO much sooner).

They commented on COGS as something that needed to be worked out before pricing was to be finalised. I don’t buy that at all. IMO they know what the COGS are and I would be concerned if they didn’t!

But yes, all of that is for illustrative purposes only biggrin.gif

The corporate structure is important bc tax in Russia can be up to 55%... and its very complex given the 85% shareholding in a Russian company, not to mention the SEZ benefits.

SibEX currently has 140 staff... more than I expected

The July 09 numbers.. of 40kg pm production are the base case we should be looking at.

The revenue that appeared in the 4E last week was due to the accounting treatment of the BPO shares they acquired. The auditors treated it as revenue whereas they think its an investment.
It will probably change come final report time.

They are unhappy with the progress BPO have made. They expected 5 trials to be complete by now, not the 2 that BPO have announced.

Charlie is leaving the SLA board to become a board member of SLA Russia. He will still be part of the management team.
Branco (didn’t get his surname) has been hired as COO.

There will be 250m SOI by the end of 2008.
Given there are about 210m SOI currently, I cant see them issuing 40m to the scientists... so Im not sure whether this is a worst case scenario, or maybe a production facility acquisition (which they mentioned is still on the cards) is part of this.

They have had interest from Japanese fund managers.. and recognise they are 20 years ahead of the competition.

The trial data was good.. and alot of it we knew already and given the fact that every sentence was translated it was tough going. .. some people even fell asleep tongue.gif
I thought the comments on the hormone imbalance and endocrine system problems were particularly interesting... and will be a key area of Ropren research and trials going forward.

With regard to SibEX, they past few months they have trialled using different raw materials to try and achieve the same purity in BioR production, and they have been successful in doing so.
All the testing is complete.

They are very confident of producing 240kg in calendar 2009.

Dr Dee gave a short but succinct update on Ropren and her experience. Cut a long story short.. to be available in NZ next month for around $3.8k per course. Accident/incident (didn’t get the right word) records need to be kept by practitioners that prescribe it in Russia.
A huge positive.

The doco looks terrific, and will be shown on the most popular TV station in Russia.

A question was asked about whether the demand that the company keeps on outlining is based on fact rather than S curves, and PS answered that it is, and that the heads of the various hospitals are ‘ready to take product as soon as it becomes available’.

As for Opes... SLA issued writs against ANZ today (and you internet super sleuths can have fun with that tomorrow!!!)

Tomsk upgrade. Charlie seemed to think it would cost 12-16m not the 21m that is on the Tomsk website.
As for how it would be funded, PS said they wouldn’t use debt but may use a SPP... and then Charlie said they would hope that Ropren revenues would cover it.

Supply of raw materials wont be an issue. Bc Solagran employ 140 ppl through SibEX, they get privileges. One of those is the access to the raw materials, including a 5000 hectare forest, not to mention another 5k hectare area that they will have exclusive access too if they help fund the plantation.

The shelf life of Ropren is 2 years... so no issues there.

As for scientist incentives, an MOU has been signed where the scientists consult to SLA for a min 3 years. There will be shares issued but they are subject to performance hurdles (so i read this as they wot get any straight away).

Charlie off to Russia at the end of September.

Solathera is the operating company. Solagran is the registered listed entity.

They are currently in discussions with another party regarding world-wide sales, but due to the various regulatory structures is a complex process.

They also had heaps of interest from other pharmas regarding the Solamind shareholding that came up for sale....


So thats it folks... all in all... a terrific shareholder update, and exactly what i expected.
IMO pricing is due in the next week or two, and then the commencement of sales shortly after.

Its all on track, and the SIbEX achievements cannot be overstated.
There aren’t too many pharmas that are vertically integrated... let alone biotechs.

Past my bedtime

Cheers
Livas1