Today, I added FRE to my portfolio. It’s been a while since I’ve invested in pharmaceuticals or bio—around 15 years, in fact—but I’ve decided to take the plunge with Firebrick, alongside my other holding in Botanix. I’ve been following this business for a while and probably should’ve jumped in sooner, but it is what it is. I took my first position at 8 cents a share.
After doing some research and reading through the long threads filled with shareholder opinions and the rare insights from the founders and management, I really believe this company is on the brink of some long-term growth. I'm currently in Southeast Asia for a few months, and I must say, the product looks impressive on the shelves.
I’m attracted to this business for several reasons. The founders have skin in the game and run the company with integrity, showing they're not overly greedy with their pay. They maintain conservative financial practices, and the gross margins are a healthy 70%. Plus, having a product ready to sell is a big advantage—there’s no long wait for something to hit the market. With a small share registry and not too dilutive to date.
It’s a smaller venture than I’m typically used to, and sure, it has negative earnings right now, but I’m optimistic about its long-term potential and the enthusiasm of the current team. One aspect I’m closely monitoring is how the company navigates the strict marketing regulations in the U.S. Other countries likely impose similar restrictions on making claims without adhering to FDA requirements, which could slow growth and limit options to online sales.
That said, the product should perform well online in the Southeast Asian market. I receive a lot of products sent to me, and this market is primed for e-commerce growth. Culturally, people here are more accustomed to shopping online for practically everything. I find that many prescriptions I used in Australia aren’t needed in most Southeast Asian countries and India, where I’ve spent many years.
I'm curious about how well the product would fare in the Indian market. It’s an incredibly competitive landscape rife with red tape, but the market size presents a huge opportunity, uniquely combining established online delivery infrastructure. I believe Nasodine will continue to do well. The world is experiencing a travel boom—I’ve been traveling around Asia with my family for the past 12 months, and the excitement is palpable. Vietnam, India, Malaysia, Thailand, and Singapore are all thriving, with packed flights and an increase in tourism. People are more conscious than ever about catching colds or other bugs; face masks and hand sanitizers are everywhere. Covid has fundamentally changed our public interactions; it’s almost the norm now to be a germaphobe, and I always ensure I boost my immune system before and after every flight.
I see this as a product positioned perfectly for the right market at the right time. However, it does require a stronger marketing strategy to capitalise on its potential. With a hands-on sales approach and better connections with pharmacies and small clinics across Southeast Asia, there’s a significant runway for growth ahead and a very large total addressable market.
It is under the radar and more of a micro-cap but at 8 cents a share I feel the asymmetry is worth the patience. Revenue is trickling in, and with the constant deals and push for market penetration it can only increase. Sure it is a micro-cap and cash is crucial here, and there are a lot of risks but it just warrants a lot more attention than other holdings where they have passed this “Maintenance monitoring” stage for me.
GLTAH and DYOR
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