The dawn of a new SUDA

I have been reflecting on the events of this week over the last few days and what it all means for our company. In a nutshell I think this week marks the dawning of a new SUDA.

It is crystal clear to me now what the strategy of the new management team is.
It is to pursue the current product range and supplement it with higher growth higher risk opportunities.

The current product range (with the exception of Anagrelide) are likely to bring on growing but relatively modest (in the scheme of things) royalty revenue. There is nothing wrong with this. With low overheads and royalty revenue this can be very lucrative for a company.

Hopper, Baker and Co have decided that this is all well and good but it can be ramped up even more.
And the way to do this is by plugging in assets that still have clinical trial work to complete, but if proven, can lead to substantial gains in valuation.

I like this approach. It focuses on stable royalty revenue on the one hand and high growth opportunities on the other.
Royalty revenue will keep the lights on but the high growth opportunities will lead to share price appreciation.

The signal was loud and clear to me with the proposed acquisition that didn’t get the nod of the ASX. I read it as ASX not being convinced of the merits of a $6m company acquiring a $25m asset.
I actually am flabbergasted by this as I can’t believe a stock exchange can have ultimate say in how a company is run and the strategic direction of that company. I would have thought it would be up to the management team of that company to do a deal and then have shareholders, as owners of the business, have the final say.

Anyway, I digress.

The events of this week signal to me that Hopper and Baker have excellent networks and more importantly negotiating skills. This to me is critical and is a huge tick for me. The fact that they almost got this proposed acquisition done is a testament to that.

But they have signalled to the market their intentions. They will look to bring in assets into the SUDA business that have the potential to deliver returns far larger than the existing product range (with the exception of Anagrelide).

I think it really is an exciting time for the company.

I think the lab would have continued to work throughout the suspension and I also expect that we will hear the results of the Anagrelide pk study very soon. It has been a month since the initial announcement and I think that report cant be far away now.

The message is loud and clear. SUDA management are about doing deals that they believe will increase shareholder value. The Chairman has a track record of delivering, so I see no reason why he wont be able to do it again.

Strap in for the ride.

Good luck all