FA bagger potential

I believe this can be trading many multiples higher from todays price with the current status of PPS' application.

Some food for thought on where this can go.

There are 19 000 and 25 000 hip and knee replacements each year in Australia costing 500m each respectively. With 10% penetration into the industry of effective PPS application. This can keep people out of hospital, on their feet and reduce pain significantly improving lives and saving the nation a lot in health care costs. A course of the drug could cost somewhere in the vicinity of $5000.

Size of market: 34 000people
Penetration: %10
Cost of course: 5000
Revenue: 17m yr
Costs: 10m
PE: 40*
MC: 280 000 000
SOI: 133 000 000
Share price: $2.10


*Using a PE of 40 as there are the ross river virus applications and the nasal spray is still in the pipeline. Biotechs traditionally command a high PE as a base.

If the US market opens up and the number of people treated increase by a conservative amount of %300, risk adjust that by %30.


Share price: $4.40

Just to note that the number of people affected by osteoarthritis and BMELs in the US is 27million. So the numbers quoted above are very conservative.

See where this goes over the next 12 months.

It is worth nothing that there is RnD rebates and some cash injections coming to the company so a dilutive CR is unlikely for at least the second half of this CY.

Thanks,