The baby and the bathwater

The restucturing has saved the company from the abyss. The US direct to consumer launch was always an insane proposition for a company of ADR’s size.

What’s left is a massively reduced cost base, the Astra Zeneca relationship which is going to see big volume increases, and the direct to payer market where they are already up and running with Vitalus. Plus an unrivalled knowledge and database.

Reading the Q2 quarterly outlook carefully, there should be a good rebound in revenue in Q3 . They could end the quarter with $2m cash. The real cost savings then flow through. It’s entirely possible that they could be running at breakeven in Q4.

The medical adherence market is highly valued. Just look at ADR’s rival Propeller. It was barely a year or two ago that ADR was being talked of in the same terms as propeller. Yet ADR now has a market cap of $4m, while Propeller has recently been sold to Resmed for $225m !

Ultimately, I expect ADR to be sold. It may not be for $225m, but it sure won’t be for $4m either.