Giaconda has announced the sale of Myoconda, Heliconda, and...

Giaconda has announced the sale of Myoconda, Heliconda, and Picoconda to Red Hill Biopharma Ltd of Israel. The three drugs have been sold for a total $US $500,000 plus a 7% of net sales received.

To say that the deal is great for Giaconda shareholders is a bit, yes great and not so great. Im not in high spirits with the three drugs being sold for such a discounted price. I was expecting much more than $US 500,000. Beggars can not be choosey considering Giaconda financial position.

Red Hill Biopharma
I have been trying to find some background on Red Hill Biopharma Ltd of Israel. Not much shows up in a quick Google search. It would appear that Red Hill will be listed on the Israel stock exchange at the end of the year. *1

News about the Myoconda sale to Red Hill was from an Israel website

RedHill Biopharma buys digestive system drugs rights *2

AMTI
In some ways this deal with Red Hill is better than the FAILED AMTI deal. I have no idea why the current CEO has been dealing with is un-reliable, and my I add unknown company. AMTI wanted to invest in Giaconda on 18th July 2008 and failed to come up with the funds. AMTI failed again to raise funds in June 2010.

*3
The last deal would have seen AMTI with 17,000,000 Giaconda shares purchased at $00.06.5c per share and a royalty payment of only 5% of net sales received. This would have seen AMTI holding approx %25 to %30 of Giaconda shares. The new deal with Red Hill Biopharma Ltd has no share issued and no options pending. This will not dilute the shares of Giaconda.


Projected Estimate Sales from Red Hill Biopharma
Here is an estimate of projected sales of the 3 drugs sold to Red Hill Biopharma. Im taking the sales figures from an old AGM Power Point presentation which was presented in late November 2008. All the below drugs have not been approved by the FDA and will naturally need approval before going on sale. According to the CEO Myoconda will take 12 months to be approved.

*4
Myoconda Estimate sales $US $2B x 7% Sales =140
Heliconda Estimate sales $US $150M x 7% Sales =10.5
Picoconda Estimate sales $US $245M x 7% Sales =17
Total=$US $167.5M

The 167 million will need to be converted to $AU dollars this will be $AU190M at current exchange rate of .087. Remember this is an extremely optimistic future sales guide from a Power Point presentation years ago. (I have nothing else to work with!)


Future Share Prices
Giaconda is one of the most tightly held shares in the ASX. I believe it to be in the top 5 of the ASX tightly held stock, the top 20 share holders have 85.2% of stock. Giaconda has only 77,436,005 shares listed. To prove how tightly held this stock is only $117,288 has been traded or 2,001,886 shares in 12 Months as of 22 June, 2010. *5.
The current value of this stock is $00.03 per share. With a Market Capitalisation of $2,323,080 this stock is way under valued but to future potential sales as stated in future sales.

At the moment Giaconda has little or no money and soon as this sale has gone threw to Red Hill we should see an improvement in the share price immediately. In my last post I stated that Giaconda last drug not to be sold to Red Hill is Ibaconda (treatment of irritable bowel syndrome) with an estimate sales of +$US500.

In a quick summing up Giaconda has a brighter future and looks like the Red Hill deal is great for shareholders.

Wally



Source
*1
http://www.thepharmaletter.com/file/94819/ahead-of-an-ipo-israels-redhill-biopharma-likely-to-raise-5-million-privately-says-globes.html

*2
http://www.globes.co.il/serveen/globes/docview.asp?did=1000568581&fid=942

*3
http://www.asx.com.au/asxpdf/20100309/pdf/31p4yxsd6wj7p0.pdf

*4
http://www.giacondalimited.com/pdfs/AGM%20presentation.pdf

*5
http://www.tradingroom.com.au/apps/qt/quote.ac?section=tradesum&sy=tpl&code=GIA#tabs