can you feel it, page-30

Colin hi
Being CSL's size by 2013 is a stretch. But being the size of CSL today in say 10 years not so much a stretch if instead of massive dividends they do some big acquisitions and/or new bioeffectives come out.

Ropren by itself won't make for a $21b company, but once cash comes flooding in, alot of research can be paid for, and the polyprenols/bioeffectives are for scientific discovery what the Ukrainian steppes are for a Cossack- huge, as far as the eye can see in every direction for as long as you got the energy to ride. The polyprenols are not one single drug molecule as traditional pharma drills down to, it is a family of molecules, makes deconstructing the effects so much easier (bite-sized pieces). The easier a chemical code is to decipher the better the chances for successful research.

It is like the difference between building one 60 storey building versus constructing 60 one-storey buildings, the
60-storey one requires so much more pre-planning and integration and because of this it costs a massive amount compared to a bunch of brick and tile houses. So much more can go wrong in any complex system (look at the quadrillion dollar derivatives market right now, they were too clever for their own good).

Ropren is just the initial taste. Soviet scientists started looking at pines because of their amazing hardiness. Dozens of drugs could come out of this- cancer cures, hairloss cures, party drugs, who knows. Tomsk will soon have two factories pumping out polyprenols so plenty of ability to run test batches of new polyprenol combinations (doing these test batches are quite the impediment in drug research).

Of course plenty of successful biotechs go down this route (re-investing in themselves) and like little oil companies, once they get a nicely paying product they squander all the profits on research pipelines that produce nothing. It’s not so much mismanagement as scientist trying to keep on a lucky streak (they are driven by career and curiosity rather than money). Its not a problem for us shareholders for a few years yet but we’ll have to keep an eye on them, make sure these eggheads don’t spend all our money on the mother of all laboratories.