Yahoo Finance
Filing
Dec. 03, 2018
Q3 2018 Data
Price: $6.25, Shares:15.7m, Cap: $98m
1.Business Information
(1) History
The company was found by Dr. Albert Friesen at around 1997. It was created to develop a medicine called MC-1 for Cardiovascular disease. The company IPOed at 1999 to raise more fund for the research. The clinical trial was going well until it failed to pass phase III at 2007 after spending like over $130m on the research and it incurred $30m in debt as well.
The company almost bankrupted at that time but luckily in 2006, it acquired the US right to another Cardiovascular medicine called Cardiovascular AGGRASTAT. Since 2007, revenue related to AGGRASTAT started to pick up but was very low. At 2011 it restructured its debt by issuing shares. By 2014 AGGRASTAT's revenue raised to over $8m and became profitable since then. AGGRASTAT continue to doing very well and achieved over $30m in revenue and $9m in EBITDA at 2016. At 2007, competition kicked in. The company lowered AGGRASTAT's price. Although the volume of AGGRASTAT still increases but revenue dropped to $27m and EBITDA dropped to $4.5m. For the first 3Q 2018, volume still increased, but revenue is flat and EBITDA is lower than $2m.
Since 2014, the company started to invest in a generic medicine factory in the US called Apicore. Gradually the company increased its stake in the company and later at 2017 it sold Apicore and made around $70m in profit.
(2) Major business.
AGGRASTAT: Currently quarterly revenue is around $7m and EBITDA is $0.5m. Also, the product's patent will expire at 2023.
Zypitamag: Started sale at Q2 2018, generated $600k and $300k revenue in Q2 and Q3.
Sodium Nitroprusside: Generic for Nitropress. Will start to sale at Q1 2019.
(3) Debt and Credit Facility.
$72m in cash and no debt.
(4) Employee numbers
(5) Industry comparison.
(6) Major events
2. Management
(1) Key person
Albert Friesen: Ph.D. in protein chemistry from the University of Manitoba, the major creator of WinRho SDF which seems to be Canada's first successful bioproduct. He was also involved in many products after that.
(2) Insider ownership
Albert Friesen: 15%.
3. Financial data.
4. Valuation
(1)Currently, the company has $72m in cash and it is likely to get another $13m by 2019. Although AGGRASTAT's profit is trending down, the company is still profitable. Remove the cash, the company is just traded at around $10-$20m.
(2) It has one profitable product(AGGRASTAT), one just-launched product (Zypitamag), one approved product (Generic Nitropress), 2 products waiting for approval.
5. Risk
(1) AGGRASTAT's revenue and profit are trending down. It might become unprofitable.
(2) The company might not use the cash wisely.
6. Conclusion
Overall the company is in a good condition and there are pretty good potentials to do well in the future. Current price is quite cheap.
7.Links
