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Gold/Mining/Energy : Nuvo Research Inc -- Ignore unavailable to you. Want to Upgrade?

To: Montana Wildhack who wrote (12823)	8/28/2003 7:34:24 PM
From: Montana Wildhack	Read Replies (1) \| Respond to of 14101

Don't sit there Kermit, that's a toadstool. Assume for a moment that there is a big, fat book you can subscribe to that comes out monthly. It's almost unbelievably expensive and in it is the drug prescription fills and related activity for each month. Pretend for a moment that in that book are these numbers: Pennsaid: May - 2800 Jun - 4200 Jul - 6300 Now obviously in real life no one should believe this and certainly no one should trade based on this. But in this story if those were the numbers what would that mean? It would mean that this is the number of times a doctor wrote a prescription for Pennsaid and someone went to a pharmacy and got it filled. They're called scripts. If you also had the refill number you would know how many of those were from new prescriptions (11,500) and how many from refills of existing prescriptions (1,800). Lets say you don't care right at this point even though this becomes a critical issue (the ratio of refill to new must grow over time). So what would an example like this mean in terms of revenue? (There are other factors involved but they become less material with more volume so lets keep it simple.) It would mean that in May with numbers like that they would have earned $80k US in revenue from Canada. To fill in the gaps you would need around $250k US (or EU) from Italy as a form of upfront and the $316k US from OXO with some combination of Italy and the inventory adjustment ($21k? 71k?) to come to the $657k US - hypothetically. Using the same numbers you would also arrive at $330k US in Pennsaid revenue in Canada in the first two months of this quarter with a 50% growth in script rate from June to July. And an annualized run rate of $3 million Cdn in sales based on the third month of launch. That's crazy talk I know; but, you shouldn't believe any of this anyway. It's just an exercise. It also implies that in the 1st Quarter of 2004, DMX would be reporting around $550k US in revenue from Pennsaid in Canada (don't forget it's a simple model; but, trust that the materiality is not great and declines over volume.) If a trend like that continued; but declined significantly in month over month ratio - you would be assuming that Pennsaid did not peak in sales in the third month and instead peaked somewhere after 6 months. [Note: The increase June to July was 50%. What I'm saying above is that the increase from October to November declines to 18%. The activity volume is still growing but the rate of that growth is declining.] If you assumed that, then the sales of Pennsaid in Canada in the 2nd Quarter might be $1.2M US which is a run rate of $7.5M Cdn in local market sales which is 1.5% as measured last year. As jamieb7 on SH understood clearly the real question is when does the sales growth plateau. It'll have to slow down first before it stops and so far it hasn't done that either. ... We'll get a peek at what actually happened in real life just before the AGM in October when the reported sales will be published. The sales will be over $500k US but I think are unlikely to break $657 until the 2nd quarter. In the meantime the right response is to be very skeptical of this. Wolf