The company has timed the last couple of capital raisings to occur around significant events that boosted the share price. The Dec 2010 raising happened with the CPT reimbursement code to take effect from Jan 2011. The April 2010 raising happened after the CPT was assigned the prior month.
The next raising would ideally take place with a similarly strong share price, but the question is what will make that happen? The Dec 2011 quarterly receipts were low and the quarter on quarter growth is indeed anaemic. Realistically I think the next two quarters of the financial year are going to be about building and consolidation on this front.
From a news flow perspective the focus has been on "covered lives" with the next significant milestones being 20 million and then 50 million covered lives. It's my belief the original intention would have been to do a raising later this year against a backdrop of rising sales and news of 50 million covered lives being announced to the market. With the last quarterly making it clear that obtaining "covered lives" status is harder than envisaged and the company considering a new metric there is a feeling of being in limbo at the moment about what the milestones are.
I'm sure we're going to see some clarity emerge on the news flow milestone front with an investor update by March (the sooner the better). The last one was in July 2011 so we're about due for one.
The company is on the back foot at the moment, but personally I am confident that Greg Brown will get things on the front foot again before too long.
IPD Price at posting:
54.5¢ Sentiment: Hold Disclosure: Held
