The meeting at NuSep's premises at Burns Bay last Thursday was excellent. We had considerable in-depth discussions around various presentation slides as well as being shown around the manufacturing laboratories.
Being primarily a science person I could have a close look at the processes involved, the equipment used, the precision and care taken, and the staff in action. It was all very thoroughly professional.
It was also very valuable meeting senior staff who were each very thoughtful and competent when quizzed, knew what they are doing and, while having their own specific functions, were well versed in the other areas of the company. No silos.
SPECIFICS Nusep's market potential as per its component divisions was outlined as in View #6 of the 6 July presentation. When the $ numbers are put on each segment as well it becomes clear how the PrIME Fractionation market is the most desirable of all and in need of key focus. The Consumables Div, comprising nUView gels and Proteo IQ, are in a market with gross potential of $200M p a and which could /will provide good bread and butter. The Clinicals Div contains SpermSep with market potential of $110M while the Therapeutics Div has a worldwide potential of $10B and an Asian niche market potential of $1B. Considering the unique characteristics of PrIME Fractionation and the other key factors existing in Asian countries this market presents a most wonderful business match opportunity for Nusep.
John Manusu has been shuttling back and forth and has had meetings with several leading gov't dep't officials of several neighbouring regions. The issues of paramount importance are that,
a) Each developing country in Asia desires its own in-house source of blood plasma supply, now only available from the Big 5 fractionators at high (first world) cost.
b) More than 50% of plasma collected in those Asian countries is wasted through not meeting regulatory collection standards.
c) Nusep's separation process is unique in its ability to handle such plasma and in the quantities that these jurisdictions might demand.
d) Nusep can get access to this 'wasted' plasma free. Yes! (Present world market price is ~$120 per litre.)
e) Note that the initial supply for Singapore will come from US and a Supply Agreement to that effect has been signed.
Take as an example Malaysia where 80 000 litres is collected. Of this 50 000 litres is sent to Australia for processing while 30 000 litres is literally wasted, i.e. a minimum loss of $30M at the front end. NSP can process (fractionate) this without any contamination and add value. In principle, if all the plasma was used there could be a saving of $10M - $100M per country per annum.
If you look at a presentation with the normal brief descriptors you often imagine that much more could be said. In this case much more was said and it is very positive. The business potential for NSP becomes clear.
The SPO is designed to give NSP a larger equity in SingaPharm. The options when converted in March 2012 should provide the funding required (~$1M) to put SpermSep through the trial and then to market.
Note. It is a big plus that the directors and existing shareholders have underwritten the SPO. Normally an institution such as a broker would do this so that a sizable quantity of the shares could potentially end up in the hands of investors disinterested in NSP and result in an overhang of shares at low price (thus preventing the price from rising). However, existing shareholders, being informed of the good news in the offing, are likely to hold onto their holding and allow the price to rise.
Reminder: The SPO closes this Friday, 29 July.
Apologies for length of post. Not the half has been said! [N.B. I don?t know what was said at the Melbourne meeting today.]
Juke
MEM Price at posting:
10.5¢ Sentiment: Buy Disclosure: Held
(20min delay)
