In my mind at this time there is a great deal to consider
about this investment.
DMX in 2001
-was a poor performer for investors
-launched Pennsaid in the UK
-had the MCA complete the european MRA and found it lacking
-completed Health Canada and await formal approval
-completed the main FDA process and FDA plant inspection
-completed the tiny but welcome Carribean with Jan launch
-organized a sales force for Canada ready to go
-upgraded the plant to handle US/Cdn volumes
-avoided placement death through a dubious/necessary Acqua
-changed PR tactics from defensive to frequent updates
-decided on the Oncyomyosis molecule finally
-completed DD on OXO and issued Heads of Terms to proceed
-decided to fund and manage the completion of WF10 phase III
analysis and reporting directly
From that list I can see why Ms Keeler calls it a momentous
year while I look at the 4.70 shareprice compared to 8.05
the previous year end. My portfolio sees it more as the
lost year. There were several opportunites to buy DMX at
a price lower than what I paid in 1998.
Looking forward it strikes me that looking at the next year
feels eerily similar to what I expected in December 2000
looking at the 2001 year.
With 2 exceptions and 2 gigantic exceptions.
All my spreadsheet work showed me one thing clearly. Europe
is like the US as a horsecart is to a Terex earthmover.
The US coming on stream blows european contributions away.
The 2 exceptions are that Pennsaid is selling in a decent
sized market and Health Canada has all but approved it.
The gigantic exceptions are of course closing in on the
US approval with J&J still present and far more importantly
than anything else - the aquisition of OXO Chemie and its
WF10 wunderkind.
I got an e-mail from a known market analyst this morning
saying DMX will become synonomous with WF10 - not Pennsaid.
I agree. As many know WF10 is the real play if DMX owns
it (despite the fact I originally invested due to Pennsaid)
because in both the multi billion US$ AIDS and Hepatitis
markets WF10 will not be in the shadow of COX2 and COX3;
but, is a solution by itself while being able to add it
to other cocktail regiments without conflict.
Joe, Barcelo, and others have been telling me we are in
a draw period again and while I resisted this information
despite some evidence - I now also believe this is true.
That is due to the apparent structure of the OXO deal.
Cash:
I showed a few weeks ago that the 1.5 million draw left
DMX about 900,000 short plus there was a large current
liability due. The 2.5 million from Investissement Québec
covers those.
The December 05 $2.5 million draw is insufficient for the
end of February but I included Provalis sales and some
european money to make up the shortfall.
I had assumed the J&J funds (15-20 million US) would be
insufficient to initiate the OXO deal - but Rebecca has
structured things more flexibly than I estimated despite
my faith much of the deal would match revenue streams and
milestones.
The 500,000 is upfront to OXO in US funds. On top of this
another 1,000,000 or so will probably be needed to complete
the phase III results. After the formal deal the expenses
of OXO become part of our operating costs. I suspect DMX
will be coming up with something in the neighbourhood of
$1.5 to $2 million US in this quarter.
Note the wording:
In the interim, however, the critical day-to-day business of Oxo will be able to continue, and most importantly, with the help of Dimethaid's clinical and regulatory affairs departments, the pivotal Phase III study of WF10 in late-stage AIDS patients can NOW be completed, and the results announced when available.
Sounds like OXO needs money right now.
2002 just might be a great year for DMX and I have a bottle
of Chateauneuf in the coldcellar waiting for the day we
break through 14.80.
Which leads me to my final comment. I am now tracking more
specific events than ever before all of which will add to
the worth in a company that has long said it will not start
talking until it becomes real - and has recently started
talking up a storm.
That last update tells me the Due Dilligence on OXO is
complete and we're going ahead.
So now I look forward to the US approval of TWO Dimethaid
drugs. Possibly both in 2002. Both targeting multi billion
dollar markets. With a THIRD drug (HepC) completing phase II.
Merry Christmas indeed.
Wolf |
