|Shares Out. (in M):||4||P/E||0.0x||0.0x|
|Market Cap (in M):||300||P/FCF||0.0x||0.0x|
|Net Debt (in M):||0||EBIT||0||0|
With no known cure, and no medication currently approved by the U.S. Food and Drug Administration (FDA) for treating the core symptoms of autism, the Company's enzyme replacement therapy stands to be the first medication approved by the FDA to treat those core symptoms directly. This would have a profound effect on the lives of autistic children worldwide.
Last month Curemark announced that the company has completed its targeted enrollment of Phase III clinical trials for CM-AT, its autism treatment. Curemark has reached its targeted enrollment for the study of a total 170 children, who are participating in the CM-AT Phase III trial at 18 sites across the country.
Importantly, what makes this all significant is that Curemark has also received FDA fast track status for its autism treatment. This could mean the product could be on the market sometime in 2012.
Why bring up investing in Balchem (BPCP - $39) The stock keeps making new all-time highs. In fact BCPC shares have been doing this every single year for the past ten years. The Company has a lot going for it. It has many proprietary products, a near monopoly on Choline which is finding increasing human and animal health uses in the world today. in the past year Choline has found a surprising new use unrelated to human or animal consumption. It has begun to be used as a green and low cost substitute for certain chemicals contained in "drilling mud" used in oil fracking.
We believe it is not widely known what the impact on BCPC could be given a Curemark product in success mode.
Here is what we know
The way to play a Curemark success is via BCPC which to date has received modest milestone payments but stands to profit in a major way from its novel encapsulation drug delivery system for the Curemark proprietary enzyme formulation which Curemark has developed. Balchem is to receive a substantial manufacturing profit from manufacturing the Curemark treatment. In addition Balchem has a long term royalty deal based on sales of the of the pharmaceutical.
Here is what we believe
It is our opinion that should sales rev up to the hundreds of millions, and indeed if they do will, again in our (educated) opinion, ramp up to be a $billion plus product. Based on normal drug industry manufacturing profit margins (hundreds of percent markup) and a royalty on sales which in success mode we think can be a double digit percentage, BCPCs pretax can multiply substantially and rapidly.
Again, assuming an FDA drug approval, and do not fail to misunderstand the pressure on the FDA because the market is so desperate for something, in success mode it is estimated that in the first full year on the market, sales can approach $500 million with EBIT approaching 66% or some $330 million and thereafter would be expected to grow dramatically in the ensuing years.
Balchem has lots going for it, but as good as the "lots" definitely are, the revenue and profit sources from them pale in the face of the revenue and pretax profit it can earn from a successful Curemark autism treatment. The market may be thinking about this but it is highly doubtful anyone has understood the potential impact from a Curemark success upon BCPC.
|Subject||RE: RE: RE: market cap calc?|
|Entry||04/27/2011 02:19 PM|