Analysis - BDM - Biodiem

Analysis - BDM - Biodiem

Price($) 0.125
NTA ($) 0.11
P/NTA 1.156
Team 10.4
BurnPeriod 4.02
ProductPipe 6.9
ForeignMarket 1.4
Cash:Debt DebtFree

Biodiem is a pharmaceutical company with 3 main apparently distinct products. It is developing a live attenuated influenza vaccine (LAIV) and is collaborating with international bodies, Nobilon and CDC in the US. LAIV is also licensed to Nobilon and is in pre-clinical development. Another product BDM-E for retinal eye disease has completed Ph I/II and shown no toxic effects although no significant improvement at those dosage levels. It third product BDM-I, a substitute for anti-biotics in animal feed, has been commercialized. The latter has a great influence on the high product score, but one should be cautious that in this case, the most advanced product may not be that profitable.

The Team score is quite high, reflecting strong scientific expertise. The Foreign Market score is low but BDM has strong collaboration with research bodies in the US.

As for the last 3 years, Q2 is the quarter BDM receives significant receipts, 08Q2 continues this trend. Also capital raising occurred in 08Q2 of about $7m at $0.30 which is a huge premium relative to current price. Projecting the cash burn rate, BDM can last about 4 quarters - which is risky but not overly so.

Financially, BDM is debt free and has almost no intangible assets. It has managed to raise capital via equity yet maintaining a low volume of shares. The share price is one third of last years, yet with no adverse fundamental reasons, apart for the waiting time of product development. At the last price of 12.5cents, its Price/NTA is about 1.156 which is extremely cheap, indicating there is no price premium for any of the products.

Suggestion: Buy at 12c or below.