PEB - Pacific Edge Ltd

[Copper]

I was going to answer the Mac post but thought I would pour a wine and have some dinner and then post a reply as I felt the post was so positive that something had to be said from an investor point of view.Coming back to the thread there are three posts that summarise my concerns so I will just say that they collectively sum up everything in my mind.Times have changed,the market can react viciously and it only takes a slip by the Company to unwind it all. The capitalisation I think is over 300 mill so it has something to justify....

[BlackPeter]

It’s interesting timing about now, and regardless of what concurrent or coincident sales may have been forthcoming up to 31 March, PEB is an absolute fundamental BUY at these levels.

Absolutely agree with the sentiments of the posts between MACs and mine (take caution). Just thought that it should be possible to get some sort of numerical value for the SP and tried with some old fashioned NPV-analysis.

So I thought - lets be really optimistic and assume that PEB makes it into the top 10 of biotech companies (world-wide). Picked 4 out of the top 10 (Google for top 10 BioTech companies, take the first 3 and number 10 if you want to use my numbers) and found that they have in average a 17.5% annual profit growth rate (not bad ...) and a 25% net margin (not bad, either).

Than I took the 100 Mio sales revenue PEB proposes for 2018 and applied from there the growth rate as stated above. No (or only minor) profit for the earlier years.

I request a return of 16 % (given, that it is still a high risk proposition - remember, the overwhelming majority of all biotech companies do not make any profit, but yes, PEB might be one of the winners - or not?).

Entering these data into a simple NPV function (try it yourself) returns a NPV of 70 cts per share. Slightly more, if you assume already some positive NPAT in 2017.

Question - is any of my above assumptions unreasonable - or why want people to pay so much more for the share?

Just give me some better numbers and I redo the calc.

Discl: Do not hold, but watch .... and as always, DYOR

[Minerbarejet]

Absolutely agree with the sentiments of the posts between MACs and mine (take caution). Just thought that it should be possible to get some sort of numerical value for the SP and tried with some old fashioned NPV-analysis.

So I thought - lets be really optimistic and assume that PEB makes it into the top 10 of biotech companies (world-wide). Picked 4 out of the top 10 (Google for top 10 BioTech companies, take the first 3 and number 10 if you want to use my numbers) and found that they have in average a 17.5% annual profit growth rate (not bad ...) and a 25% net margin (not bad, either).

Than I took the 100 Mio sales revenue PEB proposes for 2018 and applied from there the growth rate as stated above. No (or only minor) profit for the earlier years.

I request a return of 16 % (given, that it is still a high risk proposition - remember, the overwhelming majority of all biotech companies do not make any profit, but yes, PEB might be one of the winners - or not?).

Entering these data into a simple NPV function (try it yourself) returns a NPV of 70 cts per share. Slightly more, if you assume already some positive NPAT in 2017.

Question - is any of my above assumptions unreasonable - or why want people to pay so much more for the share?

Just give me some better numbers and I redo the calc.

Discl: Do not hold, but watch .... and as always, DYOR

We seem to have ended up in a parallel universe overnight.
Im lost, anyone else?

Noah fence
27% SC Maths 1958

[Whipmoney]

So I thought - lets be really optimistic and assume that PEB makes it into the top 10 of biotech companies (world-wide). Picked 4 out of the top 10 (Google for top 10 BioTech companies, take the first 3 and number 10 if you want to use my numbers) and found that they have in average a 17.5% annual profit growth rate (not bad ...) and a 25% net margin (not bad, either).

Than I took the 100 Mio sales revenue PEB proposes for 2018 and applied from there the growth rate as stated above. No (or only minor) profit for the earlier years.

I request a return of 16 % (given, that it is still a high risk proposition - remember, the overwhelming majority of all biotech companies do not make any profit, but yes, PEB might be one of the winners - or not?).

Entering these data into a simple NPV function (try it yourself) returns a NPV of 70 cts per share. Slightly more, if you assume already some positive NPAT in 2017.

Question - is any of my above assumptions unreasonable -

Yes your 16% required return on equity (i'm assuming there is no debt in the capital structure) is completely unreasonable relative to the market.

If you want to build some conservatism in the equation then you should de-risk it via your growth/cash-flow assumptions and NOT by increasing the hurdle rate.

Aside from that how'd you get FCFE? Whats your terminal growth rate?

[winner69]

Now you done it Blackpeter ... upsetting the masses

Cant be right .... oh no 70 cents is far too low

Lets have another debate about discount rates and all the inputs into a FCFE or whether 'risk' should be handled through discount rate or fiddling growth rates.

[winner69]

Is Friday a definite date for prelim or just a guess because PEB always leave it to the last possible date to report

I don't like companies leaving things this long ... not much to count up is there.

Usually the laggards are the losers

[robbo24]

Is Friday a definite date for prelim or just a guess because PEB always leave it to the last possible date to report

I don't like companies leaving things this long ... not much to count up is there.

Usually the laggards are the losers

You'll like their latest announcement today then.

[robbo24]

You'll like their latest announcement today then.

Pacific Edge signs Cxbladder agreement with MultiPlan

25 May 2014

Pacific Edge signs Cxbladder agreement with national provider network MultiPlan in the US

Pacific Edge announced today that it has entered into a contractual agreement with MultiPlan, Inc. for diagnostics laboratory testing. The agreement includes Pacific Edge’s participation in the MultiPlan, PHCS and PHCS Savility Networks.*
The agreement is the fourth signed with national provider networks by Pacific Edge since October 2013 and is another step in the Company’s commercial roll-out of Cxbladder in the United States, the world’s largest healthcare market. The agreement with MultiPlan in addition to the agreements with FedMed, Americas Choice Provider Network, and Stratose makes Cxbladder available to a significant proportion of US residents.

Pacific Edge Chief Executive Officer David Darling says national and regional provider networks are a key component in the commercial fabric ensuring that healthcare providers and technology suppliers are paid by healthcare payers for treatment provided to patients.

“Our participation in these networks will give a large number of Americans access to Cxbladder and its positive benefits as a quick, cost effective, non-invasive and highly accurate cancer detection test that is particularly appealing to US healthcare professionals, patients, and insurers.”*
Pacific Edge’s agreement with MultiPlan will give MultiPlan’s participating providers and its clients’ members access to Cxbladder. Approximately 900,000 providers participate in MultiPlan’s provider networks and an estimated 68 million consumers have access to one or more of these networks.*
Pacific Edge through its wholly owned subsidiary Pacific Edge Diagnostics USA (PEDUSA) has launched Cxbladder in the US and is processing samples collected using its proprietary Urine Sampling System at its custom built, CAP accredited laboratory in Hershey, Pennsylvania.

“Our sales and marketing teams are now focussed on the urologists and clinicians who are treating the largest number of bladder cancer patients to ensure they fully understand the value and benefits that Cxbladder provides to them and their patients” says Jackie Walker, Chief Executive Officer of PEDUSA.

“In addition we are advancing relationships with large commercial payers and the Centre for Medicare and Medicaid Services (CMS), which provides healthcare insurance for 100 million people or nearly a third of the American population. Progress is being made with key customer segments including Integrated Healthcare Systems, the Veterans Administration (VA), and Large Urology Groups (LUGS), who are the point of contact for many patients presenting with haematuria (blood in the urine) which is an early indicator of possible bladder cancer.”

More than one million Americans a year undergo medical investigation for potential bladder cancer at an estimated cost in excess of US$1 billion. Bladder cancer is one of the most expensive cancers to treat. The very high recurrence rate of this disease, requiring some patients to receive expensive monitoring for the rest of their lives, causes bladder cancer to have the highest total medical costs of any cancer from detection to death. In the US, the total medical cost approaches US$220,000 per patient.

[Whipmoney]

Now you done it Blackpeter ... upsetting the masses

Cant be right .... oh no 70 cents is far too low

Lets have another debate about discount rates and all the inputs into a FCFE or whether 'risk' should be handled through discount rate or fiddling growth rates.

Lol I'm far from upset... I was just giving him feedback on his assumptions like he requested.

As somebody else had mentioned this thread has an amazing psychology dynamic going on (ie. some very polarised views which ebb and flow with the share-price / market confidence).

At one end of the spectrum you have MAC and Hancocks who are very bullish (on the company's long-term prospects at least) and then you have detractors at the other end.

[Whipmoney]

Now you done it Blackpeter ... upsetting the masses

I don't like companies leaving things this long ... not much to count up is there.

Usually the laggards are the losers

Are you upset given that you missed one of their key announcements?

"Pacific Edge’s agreement with MultiPlan will give MultiPlan’s participating providers and its clients’ members access to Cxbladder. Approximately 900,000 providers participate in MultiPlan’s provider networks and an estimated 68 million consumers have access to one or more of these networks."

"Progress is being made with key customer segments including Integrated Healthcare Systems, the Veterans Administration (VA), and Large Urology Groups (LUGS), who are the point of contact for many patients presenting with haematuria (blood in the urine) which is an early indicator of possible bladder cancer.”