PEB - Pacific Edge Ltd

[amlagonda]

Winner 69 correct me if I'm wrong but isn't that forecast based purely on the cxbladder revenue stream? So any subsequent product releases such as cxcolorectal will also likely impact the sp once they are more measurable. Sorry new to this don't know how to insert the quote yet.

[MAC]

Dont think we are actually expecting a huge takeup. The initial market penetrations were .5, 2, 5, 10, and 13% over 5 years starting in 2013. Thats not exactly a big proportion. They started marketing in July 2013 so presumably we can expect 9000 odd by July 2014 if it is all going to plan. However we have had a serious indication that several ? tens of thousands are involved which points to a slightly higher rate than expected.
We will just have to wait and see.
Has anyone seen any figures on market penetration for the other items to be brought on line? Or do they sort of ride piggyback along with cxbladder?

I agree Miner it would be nice for us to know a little more, I’ve got a note book full of information requests on Cxcolorectal alone. It’s customary as I understand to release such information at the time of each product launch.

I’m looking forward also to the David Darling road show, although I hope it is open not just visits to the brokers like that Forsyth Barr thing a couple of weeks ago.

http://www.nzherald.co.nz/business/n...ectid=11219188

[baller18]

Dont think we are actually expecting a huge takeup. The initial market penetrations were .5, 2, 5, 10, and 13% over 5 years starting in 2013. Thats not exactly a big proportion. They started marketing in July 2013 so presumably we can expect 9000 odd by July 2014 if it is all going to plan. However we have had a serious indication that several ? tens of thousands are involved which points to a slightly higher rate than expected.
We will just have to wait and see.
Has anyone seen any figures on market penetration for the other items to be brought on line? Or do they sort of ride piggyback along with cxbladder?

If, I'm not wrong, the last report only indicated 3 sales, before the first national provider agreements were signed. Which means oct to july would mean each month they are incurring sales of roughly 1000 tests to get 9000 tests done by July.
I mean just crunching the numbers a bit, 1000 tests per month for a product which is 'starting' to get traction seems quite a bit don't you guys think? That is roughly 30 tests a day...
I am not too sure, if this analysis is right, believe me I would like to be definitely proved wrong as I just recently topped up, however, it does seem like quite a bit though.

However, if we look it from a different perspective, if these national provider agreements (63million) are bringing in sales for PEB which is 25% of the american population, and roughly 500k people are living with BC in states, then .25 x 500K gives you 125K cases of BC. A 1% market peneration would give PEB 1250 of sales... a 10% market penetration would give PEB 12.5K tests...
Hm, going by these numbers, ten's of thousands of tests, seems a bit too much...
(and yes BC patients undertake multiple tests in one year, lets just cancel that out with the slow traction of sales at the start, and i think the above analysis 'purely' on sales puts it in a rough ballpark)

However, there are one million people in the states presenting with haematuria, so we could possibly double the above numbers...

So not sure... Won't know till its reported I guess

Thoughts MAC & Hancocks?
I understand the science behind it is the best available on the market and etc, but if we are talking strictly about sales for PEB, don't you think sales will be very slow in the first year? Let alone 9000 or ten's of thousands for the first year?

[MAC]

The US lab, without the optional extension to expand on the same floor, is rated at 260,000 tests per annum or with some jiggery around 3,600 per week. This is a match up with the five year goal, so yes a fair way to go and to ramp up to $100M in revenues by HY18 before the extension is required.

So say 7,700 tests to FY14 from mid October through to the end of March would be with equal jiggery, around 330 tests per week or a lab utilisation of 9%. This would represent a good result, but then I would be entirely satisfied with only a thousand tests too.

Whether initial Medicare, Intermountain or Kaiser Permanente sales fall just inside FY14, probably not IMO, or fall within the HY15 reporting period really doesn’t matter one bit within the big picture nor does it matter to the valuation of the stock.

It is the new product launches that will see insto’s revaluing and buying more than on very early and arbitrary sales figures.

Take some care, trade PEB on initial sales at your peril, with up to three product launches possible this year which could happen on any particular day you may just find yourself on the platform watching the Pacific Edge express heading away up hill.

[Minerbarejet]

Dead right Mac

Be afraid - do not trade

[Whipmoney]

The US lab, without the optional extension to expand on the same floor, is rated at 260,000 tests per annum or with some jiggery around 3,600 per week. This is a match up with the five year goal, so yes a fair way to go and to ramp up to $100M in revenues by HY18 before the extension is required.

So say 7,700 tests to FY14 from mid October through to the end of March would be with equal jiggery, around 330 tests per week or a lab utilisation of 9%. This would represent a good result, but then I would be entirely satisfied with only a thousand tests too.

Just out of curiousity I looked at a comparable US biotech company and it took them four full quarters to go from 440 tests to 7000+ tests. At this number of tests their total product revenue in NZD was ~$5.65m (i.e. NZD $807 per test) and their total market cap was ~$329m NZD.

On a raw comparison this would mean that their market cap at the time was roughly 66.6% that of PEB's current market cap, which all things being all (obviously a huge assumption) would equate to an equivalent PEB share-price of $1.03.

Obviously i'm cognisant that this is somewhat of an apples to oranges exercise but these numbers may reasonably suggest that PEB is somewhat over-valued due to a substantial level of forward sales currently being priced in.

Whether initial Medicare, Intermountain or Kaiser Permanente sales fall just inside FY14, probably not IMO, or fall within the HY15 reporting period really doesn’t matter one bit within the big picture nor does it matter to the valuation of the stock. It is the new product launches that will see insto’s revaluing and buying more than on very early and arbitrary sales figures.

I would say that the timing of these agreements is highly material as to date much of the price movement on this stock has been announcement driven as opposed to be driven by confirmed sales or cash-flow. From my understanding of the US bio-tech sector, company valuations are generally based on revenue / revenue growth.

Take some care, trade PEB on initial sales at your peril, with up to three product launches possible this year which could happen on any particular day you may just find yourself on the platform watching the Pacific Edge express heading away up hill.

Sure, an announcement of a product launch will likely excite the market and lead to a sharp rise in the share-price however this company will really need to get some runs of the board at some stage (in terms of sales) in order to both maintain and growth its current valuation. A failure to demonstrate a significant level of sales traction will invariably lead to a sharp contraction to the current share-price.


Just my (worthless) 2 bitcoins...

[Casino]

pretty much some's up the situation.
I also think the PEB share price has gotten ahead of itself because of the lack of other biotech companies available to investors on the NZX.
Should Mr markets be disapointed with the next sales result and a sell off happens I believe it may present the last opportunity to purchase PEB for a reasonable price.
Me thinks that the lower than exspected sales results will be supported with positive announcements.

Would you top up your holding? If so, at what level?

[benjitara]

Would you top up your holding? If so, at what level?

At a level lower than perceived intrinsic value to the companies projected future revenues one would assume

[Casino]

Can that level be quantified?

[benjitara]

Can that level be quantified?

That's something all investors have to ask themselves in order to obtain value. But it's subjective not an exact science. Due diligence and a stiff drink.