MZ (and other NXTR investors)
I listened to the CC. [The playback number is 402-220-4010. The playback expires by the end of today, Thursday.]
Overall, the management is a lot more cautious this time than the previous CC.
Bottom line: Management hopes to see profit for the whole year. To be more specific, loss in Q1, loss to possible break-even in Q2, and profit in Q3 and Q4.
To achieve profitability, management is counting on:
1. Improved sale internationally. In particularly, the approval of Am in France. Company has prepared the sales force for Am in France, but can not say for sure when it will receive the approval. The management can only say that it is going to be in 1998.
2. Further market penetration of Am in US. Sale in 97Q4 is $4.6M. [Company gets 20% of the gross profit instead of the sale, and company sells the drug to Fujisawa at cost.] Company expects to see a quarter over quarter improvement. Company wants to compete based on the quality of the product instead of price. [It says that LIPO and SEQU are selling at a price that is not economical.]
3. Revenue from the specialty chemical group. The management expects to get $2-4M from this part.
As for the research partners, the company just counts the existing partner with S-. If the company can get a new partnership (which is one of the goals for 1998), it will help to reduce the R&D cost further.
On the clinical front, the MK phase II results will be available in 98H2.
I guess that the key question now is A) progress of Am sale both internationally and in US. This is the major driver for the company to achieve profitability. On this front, I am disappointed to note that the management has not made any comments on the label expansion of the drug in Europe and other markets [to include FUO.] B) the clinic progress with MK. [By the way, do you know the market potential for MK, assuming that it finally gets to the market?]
I do not like the way that the press release is made. To be specific, the company did not put Q4 result. It has the 97 year result only, and investors have to go back to figure Q4 out. It gives the impression that the company is hiding something. -- this point is explained in the conference call. [The company made some adjustment in Q4, which led to a lower costs of goods and SG&A cost.]
Steven |
