faecal transplants defeat superbug, page-4

Magafauna, hi!

The Giaconda story has been a long story of disappointments and bad luck for its shareholders. I truly believe that the tide has turned and the outlook for Giaconda shareholders will be exciting and rewarding in 2013/14 for suffering shareholders.


A Quick History Lesson on Giaconda


The company was founded in 2004 to commercialise a number of drug combinations developed by Professor Thomas Borody, a Sydney-based gastroenterologist.

Giaconda GIA was listed on the ASX in September 2005 with issuing 12 million shares with a list price of $00.50.

The current CEO is Mr. Patrick Mc Lean Experienced CEO – been there & done that, a Canadian who was previously Senior Vice President European Commercial Operations of the Montreal-based Axcan Pharma.

Giaconda has 5 drugs ready for final stages of commercialisation.

Myoconda, the company's lead product, is a combination of the antibiotics rifabutin, clarithromycin and clofazimine. The combination is envisaged as a new treatment for Crohn's Disease.

Hepaconda is a product for the treatment of Hepatitis C infection.

Heliconda, a product for the treatment of drug-resistant Helicobacter pylori.

Ibaconda is a product for the treatment of Constipation-predominant Irritable Bowel Syndrome.

Picoconda is a bowel preparation for use in gastrointestinal tract procedures

In 2010 a company called AMTI (Australian Medical Therapy Investments) was in an agreement for the sale of the Myoconda intellectual property for $1,500,000 plus 5% of the net sales this agreement was terminated in June 2010.

In August 2010 Giaconda sold Myoconda, Heliconda Picoconda patents to an Israeli based company called “Redhill Biopharma”. Giaconda will receive an upfront payment of US$500,000 plus 7% of the net sales earned by RedHill from a commercialised treatment and 20% of sublicensing receipts after certain development costs have been deducted.

February 2011 Giaconda went into “Voluntary Administration”.
April 2011 “Deed of Company Arrangement” as of this date the company is still in “Voluntary Administration” and is waiting for the execution on the “Deed of Company Arrangement”.



Enter Redhill Biopharma


RedHill Biopharma is a publically traded (NASDAQ: RDHL; TASE: RDHL) biopharmaceutical company focused primarily on development of late clinical-stage new, improved and patented formulations and combinations of existing drugs.

As previously stated in my previous post
MYOCONDA (RHB-104)
HELICONDA (RHB-105)
PICOCONDA (RHB-106)
The patents have been sold to Redhill Biopharma and at present ready to start final stages for FDA approval. Here is the time-line from a Redhill Biopharma for approval


Name Stage Approval Date with FDA
MYOCONDA Crohn's III 2014
MYOCONDA MS IIa Unknown
HELICONDA III 2013/14
PICOCONDA III 2014


For Myoconda - Crohns, a total $13-14 million will be required to complete a Phase III trial in North America and Israel and a Phase III trial in Europe”. With such a lot of money invested it would appear that Redhill is confident of success.

Please see Point Presentation for all information
Power Point Presentation from Redhill Biopharma

http://files.shareholder.com/downloads/AMDA-1C0OBF/2256249472x0x626206/fb0dfa2a-63b6-4930-be40-8a90b8b866b2/RedHill%20Biopharma%20Presentation%20January%202013.pdf

Redhill Biopharma website
http://www.redhillbio.com/



Today’s Shareholders and Future Share Price


If you are a current shareholder of Giaconda well, you’re in luck; the current share price of 3.4c will be a distant memory. The below table shows the earning potential of Giaconda in the very near future.

Myoconda Crohn's Estimate sales $US $2B x 7% Sales =140
Myoconda MS Estimate sales $US Unknown - say 100M x 7% Sales =7
Heliconda Estimate sales $US $150M x 7% Sales =10.5
Picoconda Estimate sales $US $245M x 7% Sales =17
Total=$US $174.5M


The 174 $US million will need to be converted to $AU dollars this will be $AU174.5 M at current the exchange rate of $1.05= 165M. Remember this is an extremely optimistic future sales guide from a Power Point presentation years ago. (I have nothing else to work with!)

Giaconda Shareholder AGM 2008 Presentation (Page 11)

http://www.asx.com.au/asxpdf/20081127/pdf/31dw1bdbbknq23.pdf

I have worked out an estimate of what the share price could be in the future. Using a Stock-Intrinsic-Value Excel spread sheet. I understand 165M is is very optimistic so I divided the earnings into 2 = 165/2 = 82.M (More realistic)

Calculator
http://www.scribd.com/doc/57443211/Stock-Intrinsic-Value

Cash flow growth rate at 1%
No of share Outstanding 79.00 M
Discount Rate 3%

The share price I estimate could be $9.33

Remember that with the above share price is a bad estimate and with all the drugs are approved, marketed, distributed and with no tax. So I understand this is a bad estimate but if anyone can have a go of estimating this future share …………..go ahead.

The top 20 shareholders who have 85.4% of the stock (one of the most tightly held shares in the ASX). It would not take much to see the share price move quickly North with good Redhill Biopharma announcements. Looking at the share price of just $00.03.4c and low share liquidity it would not take much to see an increase in the share price.

For example Giaconda gained 116.7% (+7c) to 13c over in a week, and while only 190,900 shares were traded in all In September 09.

I have spoken to the CEO of Giaconda and he is confident that the drug trials will start this year he also said that he is awaiting the investment from “Minimum Risk” per the “Deed of Corporate Arrangement” to be approved. As soon as this happens Giaconda will be re-listed on the ASX sometime this year.

To all shareholder of Giaconda I believe this year we are finally on a winner.

Wally