DPII said that some pharmas had NanoKans "in their budgets" but they did not include any sales of NanoKans in their guidance. They are big ticket items, and DPII is toying with the idea of opening service centers based upon them, with the idea that consortiums of small biotechs could then use the technology. It is not just the up front cost. The NanoKans require a lot of chemists. Note that NanoKans have a lead time of 4 to 6 months, and I believe revenue is recognized when shipped. This is likely why no NanoKan sales were put in the guidance.
With respect to mARCs, DPII says they are using it internally in their Basel labs, and are seeing a bit of service revenue coming from that. Licensing, card sales, etc., to kick in around the end of 2Q02. They have further equipped that lab with new cell imaging instruments. They have moved into the old Axys labs in the Bay Area,
Guidance was for a profit of 2 to 5 cents for the year, with revenue ramping in the second half. The revenue growth is projected to be in the 20% to 25% range over '01. They expect further discovery deals to be of an "integrated" nature. Indeed, they said that they were talking with Pfizer about expanding their collaboration beyond chemistry. WRT the Pfizer deal, R&D will go down because expenses under that deal will be recognized as COGS, meaning that number will go up. A further revenue line of "contract service revenue" relating to this will also be added.
They expect cash to remain steady, and mentioned they had bought back a small amount of stock.
After competitor MCLS got munched, there were rumors that DPII might also be bought, and this propelled it to new highs a month or so ago. MCLS went for almost no premium, so I don't know why people got excited. In any case, DPII has held at about 85% of that high of late, implying the munch speculation has dissipated. I will give DPII credit for signing up new customers, some of them large. I have no idea what their chances are of continuing in this vein, so I am simply watching for now. Mr. Market is in a "show me" mode these days, and DPII -- along with most other Trickle companies not in the mass spec space -- doesn't expect to show better numbers until the second half.
Cheers, Tuck |
