Mike, re. <<Do you know why they raised $4M last year...They had to
increase manufacturing capacity, >>
The cash flow statement indicates otherwise. They burned nearly $4M
in operations, and only $0.1 M in capital expenditure. See excerpt
below:
Net Cash (Used) By Operating Activities (3,736,744)
Cash Flows From Investing Activities:
Capital expenditures (134,083)
re. <,Where did I say that I was willing to pay $34 M in market cap
for .2m in R&D? I merely said the company wants folks to view it as a
research company which develops product and manufactures same...I
have no illusions where the profit margin will come from....
Biotech companies aren't priced according to research cost but
according to prospective sales. >>
The rule of thumb I am familiar with is that biotech companies are
valued at their cumulative R&D expenditures. GUMM doesn't give this
figure in their 10k, but at $0.2 M/year, I think it's safe to say
that after a decade it still won't come within an order of magnitude
of the $34 M market cap.
The other prospective business activities you describe, assuming
that they actually materialize, sound like contract manufacturing.
Isn't that a highly competitive, low-margin business, with
substantial risk of losing a contract in a given year? |
