Despite a probable SPP or rights issue on the near term horizon, BDM is looking very oversold. Current market cap is only around $13mill ($3.8mill in cash), so there is room for massive upside (100%+), even in the short to medium term.
The BDM/Nobilon flu vaccine is, arguably, the most promising flu vaccine currently under development anywhere in the world since it is currently the only mammalian-cell-derived intranasal LAIV. (Flumist will be cell-culture manufactured at some time in the future, but most likely a few years after BDM's vaccine is market ready). For this reason, if BDM's vaccine gets through clinical trials, it is likely to capture a large share of the market. While, statisically, only 8% of preclinical compounds make it to market, BDM's vaccine has a much lower risk of failure than most since 100mill doses have already been used safely and effectively in Russia. Nobilon have said the vaccine could be market ready in 2010. I think 2011 sounds more realistic.
Here are a few numbers to consider:
In 2010 the expected size of the global flu vaccine market will be at least 600mill doses per annum (currently size is 350mill doses, and growing quickly). Currently, the average price govts are paying per dose is US$7.50. BDM is not yet permitted to disclose its royalty percentage on the vaccine, but I have reason to believe it is in the region of 8%. If BDM's vaccine captures 20% of a 600mill dose market (a realistic scenario), then, assuming $US7.50 per dose (and prices could well rise), and assuming an 8% royalty, BDM would receive US$72mill in licencing revenue per annum. In other words, by 2011-12, BDM could realistically be generating annual revenue in the region of A$100mill from this vaccine.
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