Analysis - DDT
Price($) 0.34
NTA ($) 0.09
P/NTA 3.8
Team 0
BurnPeriod -27.01
ProductPipe 0
ForeignMarket 5.8
Cash:Debt 3.82
DataDot Technology is a CSIRO spin-off company that commercializes hi-tech identification and authentication marker for products. It targets the automobile market as well as other high priced equipment. The company has subsidiary and business worldwide over several continents.
In terms of financials, the company is still a loss making company. However, the recent 2nd Qtr 2007 results is cash flow positive for operaions with highest operating receipts over the last 8 quarters analysed. Although it there was one other quarter (Q306) where it was operating cash flow positive, the cash at hand then was $2.17m compared to the recent quarter at $6.37m. Cash pattern indicates seasonality but recent business news would suggest increase in revenue going forward, possibly being profitable within the next 4 quarters. For such hi-tech business, first time profitablity make cause major re-rating of the stock.
Other financials include a modest debt to equity of about 20% and a healthy cash to debt ratio of 3.8 times. At Price/NTA of about 3.8 times, DDT is not expensive considering potential upside in acceptance of technology and beginning of penetration into world markets.
The stock has been trending down reaching just below 30c in the last few weeks before surging to 35c recently due to favourable reports on the technology.
Recommendation buy at 34c, expect reaching 60c within 2 years.
Tuesday, April 17, 2007
Monday, March 26, 2007
Company Brief Update - MBP - Metabolic
Company Brief Update - MBP - Metabolic
Team score of at least 4.0.
MBP has been severely (overly) punished for the failure of efficacy of its obesity drugs. For the company's point of view that the Ph IIB Options Study on the obesity drug has not shown commercial viability, is positive hence saving cost of Ph III and enable the company to focus on other drug candidates in the pipeline. The company notes that the trial of the obesity drug was "completed on time" and "within budget".
Recently, MBP shares were bought at much higher price in the capital raising - 14.6m shares for $0.72 each and 316,000 options for $0.55. Compare this with today's price of $0.15
Much of its assets are in cash - about $24m left in Feb 2007. Its Dec06 half year loss of $8.8m is high (due to extensive clinical trials) but not likely for the current half. Current cash levels can sustain at least 18 months. Price to NTA is currently about 2 times.
Products on the pipeline in include ACV1 for neuropathic pain, oral peptide delivery platform and animal studies of AOD9604 for osteoporosis. The most advanced in the pipeline is ACV1 with two Ph IIA studies commenced which targets sciatic, diabetic and post-herpetic neuralgia neuropathic pain. A successful Ph I Extension study has also shown ACV1 can be tolerated at higher doses.
Expect the first Ph IIA study of ACV1 to be compeleted soon (by mid year) and the second study to complete by early 2008.
Recommendation: Buy up to 20c. Expect 25c at successful Ph IIA study by June. Expect 30c on further positive news by Dec 07.
Team score of at least 4.0.
MBP has been severely (overly) punished for the failure of efficacy of its obesity drugs. For the company's point of view that the Ph IIB Options Study on the obesity drug has not shown commercial viability, is positive hence saving cost of Ph III and enable the company to focus on other drug candidates in the pipeline. The company notes that the trial of the obesity drug was "completed on time" and "within budget".
Recently, MBP shares were bought at much higher price in the capital raising - 14.6m shares for $0.72 each and 316,000 options for $0.55. Compare this with today's price of $0.15
Much of its assets are in cash - about $24m left in Feb 2007. Its Dec06 half year loss of $8.8m is high (due to extensive clinical trials) but not likely for the current half. Current cash levels can sustain at least 18 months. Price to NTA is currently about 2 times.
Products on the pipeline in include ACV1 for neuropathic pain, oral peptide delivery platform and animal studies of AOD9604 for osteoporosis. The most advanced in the pipeline is ACV1 with two Ph IIA studies commenced which targets sciatic, diabetic and post-herpetic neuralgia neuropathic pain. A successful Ph I Extension study has also shown ACV1 can be tolerated at higher doses.
Expect the first Ph IIA study of ACV1 to be compeleted soon (by mid year) and the second study to complete by early 2008.
Recommendation: Buy up to 20c. Expect 25c at successful Ph IIA study by June. Expect 30c on further positive news by Dec 07.
Sunday, March 11, 2007
Analysis - PEP - Peplin
Peplin - PEP
Price($) 0.8
NTA ($) 0.23
P/NTA 3.45
Team 7.2
BurnPeriod 9.54
ProductPipe 6.9
ForeignMarket 1.1
Cash:Debt DebtFree
PEP's goal is to develop and commercialize cancer therapeutics – especially Skin Cancer. Its lead compound PE Topical "works by killing most cancer cells and then recruiting and activating local immune system to clean up and kill any remaining dead cancer cells." The compound is based on "a single molecular entity isolated and purified from a rapidly growing non-indigenous plant. It is not botanical and extract for regulatory purposes."
Its lead product PEP005 Topical is targeted for skin cancer. It has two applications in Phase IIb trials which are expected to complete by mid 2007. These two lead applications are against actinic keratosis (pre-cancerous lesions) and basal cell carcinoma (a common form of skin cancer). PEP is also developing PEP005 for leukemia and bladder cancer. It is also developing a host of compounds EPUFAs which it purchased recently. Pipeline looks healthy, giving the company various products to develop.
Several years ago PEP secured a major deal with US based Allergen to develop its lead anti skin cancer product. This deal terminated in Oct 2004 with the developing rights returning back to PEP. The reason given by Allergen was that it did not have the resources to pursue PEP's drug development and they emphasised that the termination was not due to the quality, safety or efficacy of the PEP compound.
Management team - The team score for PEP is above average - showing the team has got very high scientific expertise (PhD, MBBS, etc). This score does not even include the scientific advisory board, which when included will raise the score to probably 15. The board has been quite stable with Cherrell Hirst AO as the Chairman since at least 2002, and possibly earlier. She was a director since 2000 or earlier. Her plan to step down in the near future is expected from a biotech which is moving from scientific exploration to commercialization. Through the last 7 years PEP may have a few as 2 CEOs.
Market exposure of PEP has a low score of 1.1. Although PEP is focussing on the US market and has opened a subsidiary in the US, its presence or networking in other markets appear to be weak. Given that its lead drug is against skin cancer, the fact that PEP is not targeting the Asian market may not have a significant impact on its business. Nevertheless, PEP acknowledged the challenge in breaking the US market and its narrow exposure is a weakness to consider.
Financially, PEP has been debt free for over 3 years. Over the years, PEP was successful in gaining several government grants as well as licensing its compound to Allergen. In the last 3 quarters, it raised over $35m equity based finance. We need to expect that current funds are sufficient for present clinical trials, as further equity raising would dilute existing shareholdings. Assuming the current cash burn rate continues, there is enough funds to last between 8 to 9 quarters.
The current price to NTA is about 3.5 which is acceptable. A more desirable P/NTA is 3.0 which implies a price of 69c. Over the last year, PEP's price has varied between 63c to 88c. Positive trial results has contributed to the price rise while investors are sensitive to the point of punishing the stock for employee share options. Given its volatility, a negative Ph IIb results may push the stock below 20c. On the other hand, a positive result can easily push it beyond $1.10. Most factors considered, a fair price would be 72c over the next 2 months.
Recommendation: Buy at 72c over next 2 months, sell at 1.05 on news of Ph IIb completion (before results are released).
Price($) 0.8
NTA ($) 0.23
P/NTA 3.45
Team 7.2
BurnPeriod 9.54
ProductPipe 6.9
ForeignMarket 1.1
Cash:Debt DebtFree
PEP's goal is to develop and commercialize cancer therapeutics – especially Skin Cancer. Its lead compound PE Topical "works by killing most cancer cells and then recruiting and activating local immune system to clean up and kill any remaining dead cancer cells." The compound is based on "a single molecular entity isolated and purified from a rapidly growing non-indigenous plant. It is not botanical and extract for regulatory purposes."
Its lead product PEP005 Topical is targeted for skin cancer. It has two applications in Phase IIb trials which are expected to complete by mid 2007. These two lead applications are against actinic keratosis (pre-cancerous lesions) and basal cell carcinoma (a common form of skin cancer). PEP is also developing PEP005 for leukemia and bladder cancer. It is also developing a host of compounds EPUFAs which it purchased recently. Pipeline looks healthy, giving the company various products to develop.
Several years ago PEP secured a major deal with US based Allergen to develop its lead anti skin cancer product. This deal terminated in Oct 2004 with the developing rights returning back to PEP. The reason given by Allergen was that it did not have the resources to pursue PEP's drug development and they emphasised that the termination was not due to the quality, safety or efficacy of the PEP compound.
Management team - The team score for PEP is above average - showing the team has got very high scientific expertise (PhD, MBBS, etc). This score does not even include the scientific advisory board, which when included will raise the score to probably 15. The board has been quite stable with Cherrell Hirst AO as the Chairman since at least 2002, and possibly earlier. She was a director since 2000 or earlier. Her plan to step down in the near future is expected from a biotech which is moving from scientific exploration to commercialization. Through the last 7 years PEP may have a few as 2 CEOs.
Market exposure of PEP has a low score of 1.1. Although PEP is focussing on the US market and has opened a subsidiary in the US, its presence or networking in other markets appear to be weak. Given that its lead drug is against skin cancer, the fact that PEP is not targeting the Asian market may not have a significant impact on its business. Nevertheless, PEP acknowledged the challenge in breaking the US market and its narrow exposure is a weakness to consider.
Financially, PEP has been debt free for over 3 years. Over the years, PEP was successful in gaining several government grants as well as licensing its compound to Allergen. In the last 3 quarters, it raised over $35m equity based finance. We need to expect that current funds are sufficient for present clinical trials, as further equity raising would dilute existing shareholdings. Assuming the current cash burn rate continues, there is enough funds to last between 8 to 9 quarters.
The current price to NTA is about 3.5 which is acceptable. A more desirable P/NTA is 3.0 which implies a price of 69c. Over the last year, PEP's price has varied between 63c to 88c. Positive trial results has contributed to the price rise while investors are sensitive to the point of punishing the stock for employee share options. Given its volatility, a negative Ph IIb results may push the stock below 20c. On the other hand, a positive result can easily push it beyond $1.10. Most factors considered, a fair price would be 72c over the next 2 months.
Recommendation: Buy at 72c over next 2 months, sell at 1.05 on news of Ph IIb completion (before results are released).
Tuesday, February 27, 2007
Company Brief - MBP - Metabolic
Company Brief - MBP - Metabolic
Recent failure (lack of efficacy) at PhII trial sent the share diving to 20c. It was 40c for the past year but spiked at $1.10 early 2007 after news of PhII completion (note though PhII was completed then, the result was not known until now).
Cash about $25m
Shares about 300m
NTA based on cash is about 8.3c per share.
Current price is 2.4 times NTA - still too high.
Watch this stock when price falls below 9c.
Recent failure (lack of efficacy) at PhII trial sent the share diving to 20c. It was 40c for the past year but spiked at $1.10 early 2007 after news of PhII completion (note though PhII was completed then, the result was not known until now).
Cash about $25m
Shares about 300m
NTA based on cash is about 8.3c per share.
Current price is 2.4 times NTA - still too high.
Watch this stock when price falls below 9c.
Monday, February 26, 2007
Company Brief - AGX - Agenix
AGX - Agenix
- Undergone refocus in priorty since Dec 2005 when failed to find partnership deal for its development product Thromboview.
- Thromboview is a technology that uses radio-labelled antibodies to find blood clot in bodies. The market is the digital imaging market.
- Technologically, Thromboview is a significant product in its field - does not appear to have direct competitor. More importantly it has shown efficacy (positive results) in Phase II trials for Deep Vein Thrombosis DVT.
- It had previously shown to be successful in Phase Ib trial in Pulmonary Emboli PE.
- It is now in a better position to seek partnership deals. Successful future trails may more like increase the share price significantly, although current success are not reflected in the share price.
- Currently AGX has focussed completely on Thromboview. It has divested its other businesses: "Animal Health" and "Human Health". This focus developing a single product present great risk - if Thromboview is successful, AGX price wil shoot up, on the other hand if the trials fail, that may be the end for AGX.
- Financially, the company may survive for quite a while, it has $6m cash, $7m from divestments, another $3-$5m for sale of diagnostic test business. Cash burn is about $3.6 p.a. Optimistically, it can survive 4-5 years at current burn-rate. Price / NTA = 1.264 is very favaourable compared to other biotechs.
- It has an incredible team in its scientific advisory board. Team score is roughly 7.
- Recently one of its strategy to mitigate the one-product risk is that it acquired a Chinese company that has developed an anti-Hepapititis drug to successful Phase III trial. The company has a GMP manufacturing facility, connections with major Chinese medical universities and may provide a platform for AGX into the Chinese and Asian market.
- Major risks identified here. The AGX announcement indicated AGX's board and advisors have experience in doing business in China. However, there is no clear indication from the public information on the directors that indicate any of them had any associations with any biomedical business with China.
- The Chairman Ravi Govindan is also Managing Director of MatrixView - a software company with data compression technology focussed on the medical sector. He is an entrepreneur in Singapore and may have some limited experience with China. However, in an overall sense, I do not believe AGX as a whole has shown that it is able to understand and deal successfully in China. As a result - its planned acquisition is a significant risk.
- In summary, AGX is a company to watch. If there are further trial success with Thromboview, it may be too late to buy into, since the price would have rocketed. Its planned acquistion of the Chinese company is also something to watch for.
Recommendation: Extreme speculative buy at 10c within the next 3 month, given no significant news or events.
- Undergone refocus in priorty since Dec 2005 when failed to find partnership deal for its development product Thromboview.
- Thromboview is a technology that uses radio-labelled antibodies to find blood clot in bodies. The market is the digital imaging market.
- Technologically, Thromboview is a significant product in its field - does not appear to have direct competitor. More importantly it has shown efficacy (positive results) in Phase II trials for Deep Vein Thrombosis DVT.
- It had previously shown to be successful in Phase Ib trial in Pulmonary Emboli PE.
- It is now in a better position to seek partnership deals. Successful future trails may more like increase the share price significantly, although current success are not reflected in the share price.
- Currently AGX has focussed completely on Thromboview. It has divested its other businesses: "Animal Health" and "Human Health". This focus developing a single product present great risk - if Thromboview is successful, AGX price wil shoot up, on the other hand if the trials fail, that may be the end for AGX.
- Financially, the company may survive for quite a while, it has $6m cash, $7m from divestments, another $3-$5m for sale of diagnostic test business. Cash burn is about $3.6 p.a. Optimistically, it can survive 4-5 years at current burn-rate. Price / NTA = 1.264 is very favaourable compared to other biotechs.
- It has an incredible team in its scientific advisory board. Team score is roughly 7.
- Recently one of its strategy to mitigate the one-product risk is that it acquired a Chinese company that has developed an anti-Hepapititis drug to successful Phase III trial. The company has a GMP manufacturing facility, connections with major Chinese medical universities and may provide a platform for AGX into the Chinese and Asian market.
- Major risks identified here. The AGX announcement indicated AGX's board and advisors have experience in doing business in China. However, there is no clear indication from the public information on the directors that indicate any of them had any associations with any biomedical business with China.
- The Chairman Ravi Govindan is also Managing Director of MatrixView - a software company with data compression technology focussed on the medical sector. He is an entrepreneur in Singapore and may have some limited experience with China. However, in an overall sense, I do not believe AGX as a whole has shown that it is able to understand and deal successfully in China. As a result - its planned acquisition is a significant risk.
- In summary, AGX is a company to watch. If there are further trial success with Thromboview, it may be too late to buy into, since the price would have rocketed. Its planned acquistion of the Chinese company is also something to watch for.
Recommendation: Extreme speculative buy at 10c within the next 3 month, given no significant news or events.
Saturday, February 24, 2007
Analysis - ACG - Atcor Medical
ACG - Atcor Medical
AtCor is the "Central Blood Pressure" Company – whose flagship product is the SphygmoCor Systems that measures central blood pressure non-invasively. SphygmoCor system is the only FDA-approved non-invasive tool for measuring blood pressure at the heart.
Price($) 0.17
NTA ($) 0.15
P/NTA 1.16
Team 4.1
BurnPeriod 8.53
ProductPipe 5.3
ForeignMarket 5.2
Cash:Debt DebtFree
SphygmoCor is a suite of products and is composed of:
- SphygmoCor Px Aortic BP Waveform Analysis System
- SphygmoCor Vx Pulse Wave Velocity System
- SphygmoCor Mx Aortic BP Monitoring System
- Heart Rate Variability System
The company explains its product as:
"The SphygmoCor family of products provides tools for non-invasive assessment of the cardiovascular system and autonomic function. The technology that powers these products is centred on a transfer function that derives the pressure wave at the ascending aorta. The transfer function is a patented mathematical model of the properties of the brachial artery and provides important central data through a non-invasive recording of the pressure wave at the radial artery. SphygmoCor allows the physician to see the cardiovascular state of the patient, where it really matters – at the heart."
According to AtCor it is the only FDA approved product of its kind. The positive factors include: being a market leader, patented advanced product. The negative factors include: obsolescence if competitors develop better products, company depended on this one platform product.
Financially, AtCor is quite desirable, with the most attractive being its Price to NTA of 1.16. Good values of this ratio is considered to be up to 3.0 for a biotech company - the lower the better. In addition, it can survive over 8 quarters (2 years) given present cash burn rate. This is a company that has significant and increasing revenue streams unlike drug development companies. Expect the revenue to increase in the next year by 100% due to recently developed distributor channels in Asia and Europe. AtCor is also debt free.
The market targeted is not only medical practitioners and hospitals, but also include academic research organisations and big research pharmaceuticals in particular in the US. There is a risk of a superior product developed by competitors, and the risk being amplified by AtCor relying on this single technology, even though it has multi-applications.
The management team has relatively few scientists, but since the platform is now commercially available, this is not a main concern. Although it does indicate that they are not actively developing new products. The management team seems to have the experience to lead the commercialization process.
In summary - the key figures presented above are very positive. The two major risk is the ability of management to increase sales / product domination and the risk of a better product from competitors.
Technical Analysis - started nov/dec 05 at 70c, peaked 85c in Dec05 and declined to stable level of 17c to 20c from Aug 06.
Recommendation: Buy below 18c
Note: CC has just bought shares a few days ago at 18.5c and the ACG had closed at 20c for the last few days.
AtCor is the "Central Blood Pressure" Company – whose flagship product is the SphygmoCor Systems that measures central blood pressure non-invasively. SphygmoCor system is the only FDA-approved non-invasive tool for measuring blood pressure at the heart.
Price($) 0.17
NTA ($) 0.15
P/NTA 1.16
Team 4.1
BurnPeriod 8.53
ProductPipe 5.3
ForeignMarket 5.2
Cash:Debt DebtFree
SphygmoCor is a suite of products and is composed of:
- SphygmoCor Px Aortic BP Waveform Analysis System
- SphygmoCor Vx Pulse Wave Velocity System
- SphygmoCor Mx Aortic BP Monitoring System
- Heart Rate Variability System
The company explains its product as:
"The SphygmoCor family of products provides tools for non-invasive assessment of the cardiovascular system and autonomic function. The technology that powers these products is centred on a transfer function that derives the pressure wave at the ascending aorta. The transfer function is a patented mathematical model of the properties of the brachial artery and provides important central data through a non-invasive recording of the pressure wave at the radial artery. SphygmoCor allows the physician to see the cardiovascular state of the patient, where it really matters – at the heart."
According to AtCor it is the only FDA approved product of its kind. The positive factors include: being a market leader, patented advanced product. The negative factors include: obsolescence if competitors develop better products, company depended on this one platform product.
Financially, AtCor is quite desirable, with the most attractive being its Price to NTA of 1.16. Good values of this ratio is considered to be up to 3.0 for a biotech company - the lower the better. In addition, it can survive over 8 quarters (2 years) given present cash burn rate. This is a company that has significant and increasing revenue streams unlike drug development companies. Expect the revenue to increase in the next year by 100% due to recently developed distributor channels in Asia and Europe. AtCor is also debt free.
The market targeted is not only medical practitioners and hospitals, but also include academic research organisations and big research pharmaceuticals in particular in the US. There is a risk of a superior product developed by competitors, and the risk being amplified by AtCor relying on this single technology, even though it has multi-applications.
The management team has relatively few scientists, but since the platform is now commercially available, this is not a main concern. Although it does indicate that they are not actively developing new products. The management team seems to have the experience to lead the commercialization process.
In summary - the key figures presented above are very positive. The two major risk is the ability of management to increase sales / product domination and the risk of a better product from competitors.
Technical Analysis - started nov/dec 05 at 70c, peaked 85c in Dec05 and declined to stable level of 17c to 20c from Aug 06.
Recommendation: Buy below 18c
Note: CC has just bought shares a few days ago at 18.5c and the ACG had closed at 20c for the last few days.
Saturday, February 10, 2007
Analysis - CGS - Cogstate
CGS - Cogstate
Price($) 0.20
NTA ($) 0.08
P/NTA 2.61
Team 4.1
BurnPeriod 3.4
ProductPipe 23.0
ForeignMarket 6.0
Cash:Debt DebtFree
Cogstate develops computerised based cognitive based tests.
They specifically target the drug development market, in particular focussing on a small number of large global pharmaceutical companies. Eg. GSK, Pfizer, Merck, Abott.To date, they have signed more than 4 agreement with the big pharmas.
They have divested their drug development program to focus solely on the cognition test products. This strategy increases the risk of dependence on one product. However, CGS has about 4 products and R&D is ongoing which mitigate this risk to a certain extent.
Their market is mainly the US (where the big pharmas are), in addition to an agreement with a Danish and Japanese company. There is a lack of indication if they will expand to the broader Asian and European markets.
As such, the Foreign Market score and the Product Pipeline score is above average. The Team score is just moderate, but since they are not in the drug development business, it is not crucial to have a large team of scientists (more scientists = higher Team score).
Financially, the company is still making a loss, with most quarterly operations negative except for 06 Qtr3. Receipts were steadily growing over the last 3 quarters but the total operations outflow is at similar level meaning their cost increases the same rate as revenue. The company is debt-free with a cash burn rate survival of 3.41 more quarters.
The shares of CGS have not been very liquid over the last few months. Overall, there is good business strategy, product range and even proven ability of commercialization. However it is still to make sustained profits. Financially, the cash position, although not serious yet, suggests we need to be cautious. Speculatively, their is a high upside, in the event of more agreement with big pharmas.
In Feb 06, the price was still about 10c, but agreements with GSK, directors buying share, divestment of drug development pushed the price to 28c in April and August. Since Nov then the price has steadied around 20c. At the current price of 2.6 times NTA, it is on the low priced side.
All things considered here, and before the release of the 07 half year report, the Recommendation: Buy at 0.17c
Price($) 0.20
NTA ($) 0.08
P/NTA 2.61
Team 4.1
BurnPeriod 3.4
ProductPipe 23.0
ForeignMarket 6.0
Cash:Debt DebtFree
Cogstate develops computerised based cognitive based tests.
They specifically target the drug development market, in particular focussing on a small number of large global pharmaceutical companies. Eg. GSK, Pfizer, Merck, Abott.To date, they have signed more than 4 agreement with the big pharmas.
They have divested their drug development program to focus solely on the cognition test products. This strategy increases the risk of dependence on one product. However, CGS has about 4 products and R&D is ongoing which mitigate this risk to a certain extent.
Their market is mainly the US (where the big pharmas are), in addition to an agreement with a Danish and Japanese company. There is a lack of indication if they will expand to the broader Asian and European markets.
As such, the Foreign Market score and the Product Pipeline score is above average. The Team score is just moderate, but since they are not in the drug development business, it is not crucial to have a large team of scientists (more scientists = higher Team score).
Financially, the company is still making a loss, with most quarterly operations negative except for 06 Qtr3. Receipts were steadily growing over the last 3 quarters but the total operations outflow is at similar level meaning their cost increases the same rate as revenue. The company is debt-free with a cash burn rate survival of 3.41 more quarters.
The shares of CGS have not been very liquid over the last few months. Overall, there is good business strategy, product range and even proven ability of commercialization. However it is still to make sustained profits. Financially, the cash position, although not serious yet, suggests we need to be cautious. Speculatively, their is a high upside, in the event of more agreement with big pharmas.
In Feb 06, the price was still about 10c, but agreements with GSK, directors buying share, divestment of drug development pushed the price to 28c in April and August. Since Nov then the price has steadied around 20c. At the current price of 2.6 times NTA, it is on the low priced side.
All things considered here, and before the release of the 07 half year report, the Recommendation: Buy at 0.17c
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