Originally Posted by
MAC
Pacific Edge has been pursuing a commercialisation programme since 2011, this programme required the completion of clinical trials, regulatory approvals, user group programmes, the commissioning of two laboratories, and a target of achieving first US sales in 2013.
Most investors I believe would agree that Pacific Edge have performed very well in meeting all these objectives thoroughly, on schedule and under budget.
Now we have been presented with a five year plan for sales growth in the US, NZ, Australia, Spain and Asia, and the diversification into four product streams for Cxbladder.
Again most investors seem to retain confidence in Pacific Edge because they have a history of meeting objectives. This is not ‘hype’, its credibility.
My DCF suggests Pacific Edge are fairly valued at present if only US Cxbladder(detect) revenue streams are considered.
The challenge for intso’s and analysts when PEB become NZ50 listed, will be similar to my own at present, in valuing the other forward revenue streams.
The greatest benefit of the NZ50 listing, as I see it, is that institutional analysts will gain better direct access to PEB than the rest of us have in assessing and valuing these streams.
Forward revenue streams to be assessed for a full 2014 valuation workup;
Cxbladder(detect) – US
Cxbladder(detect) – Spain
Cxbladder(detect) - Asia
Cxbladder(triage) – US, Spain, NZ, Australia, Asia
Cxbladder(predict) - US, Spain, NZ, Australia, Asia
Cxcolorectal – also likely to be launched in 2014
Pacific edge is undervalued at present, the difficulty is in accurately determining by how much without sufficient information on these other streams being available to most of us.
In addition, if PEB achieve ‘tens of thousands of tests’ in 2014 it may well bring forward discounted cashflows ahead of what analysts, including myself, are presently allowing for.
Bring forward cashflows would allow PEB to progress the pipeline products earlier, thus creating a compounding growth effect.