Back ground on REI was very good, thanks. Shows promise but it will not be for awhile that we will see any big effect on stock (as you said) but still shows that MBI has respect of scientific community by this agreement with REI.
Wayne Schnarr of Cannacord has given buy recommendation June 28, 2000) with 6 to 12 month goal of $11.00.
He gave a 7 page report. On page 5 he states, " Our conclusion would be that if Micrologix announces positive results Phase 3 trials results that can be the basis for regulatory filings, the technology valuation should be at least $600 million." (I think that is about $17 a share.) "If clinical trials results are extremely positive and would justify larger results are extremely positive and would justify larger initial markets and higher product pricing, the technology valuation could be substantially higher."
I am hoping for, "substantially higher" Wayne Schnarr talks about a US $450 million world market. I hope he is under estimating.
Doug Miehn of RBC Dominion Securities on February 22, 2000 published a major report 28 pages long. At that time he gave a 12 month target of $11. He made a very complicated analysis of potential market, 3 full pages as opposed to Wayne's one third of one page. Meihn based his analysis on how much money would be saved by hospitals if they used MBI 226. His analysis was based on 60% saving to hospitals from treatment of infections caused by catheters. Miehn estimated market if MBI 226 could reduce the infection rate of catheters to 2%, it would create a market size 1.1 billion dollars. If MBI 226 could reduce infection rate to 1% the market size could be 2.1 billion dollars. If hospitals were to lower requirement of of savings 60% to 35% to 25%, the potential market is 2.6 to 3.8 billion dollars.
Wayne Schnarr assumes that target market will be high risk patients who are at highest risk of acquiring infection. This would partly explain his lower target market.
It is possible the MBI 226 could reduce the infection rate to 0% which is closer to phase one results. I would guess that would increase the market size to 3.1 billion.
It seems to me that both Miehm and Schnarr fail to give any monetary value to saving 50 to 70 thousand lives a year in USA and the other lives world wide.
Every time there is an CVC infection on average it cost a hospital $28,690 in treatment costs. What is the cost of a death. According to most analysts $0.00. I don't think so. But suppose MBI 226 is proven to completely eliminate CVC infections. Would CVC infections now become a automatic sign of hospital negligence. How would a hospital defend it self against a death due CVC infection. What is the cost of one law suit. $28,690? I don't think so. Try a million (conservative). 50 thousand deaths would equal 50 billion dollars. 70 thousand deaths would be equal to 70 billion. That is in US alone. I do not like the thought but all it would take in one law suit and MBI 226 may become mandatory.
I am hoping MBI 226 will be used in all CVC.
The results one acne were good. I wish they had more data on effectiveness 594AN. I guess MBI must like data or they would not continue on to phase 2. |
