auf allen Foren ist neben GUY - Dealwithit - gewöhnlich sehr gut in der Materie und auch kein Dummpuscher - er hat immer eine recht ausgewogene Sicht auf die Situation - zuletzt deutlich opitimistischer - hier sein letztes lesenswertes post zur Frage, wie sich wohl die Umsätze zusammensetzen werden - und wie sich die Situation insgesamt darstellt:
The asset sales are big deal, if all three play out as expected, because it will stop the share count from moving north and because it proves the molecules/products/ingredients they are developing are worth large sums of money to very large large consumer companies (it's expected 30M of ingredient sales this year will translate into a one time sales of 200M or more up front and another 200M in possible milestones going forward).
While that's material what's also interesting is how Q4 revenues will play out.
So taking a shot at it this is how I see it as of today:
This is what Melo stated at the Q3 C.C. when asked about Q4 numbers:
''Amit Dayal
That?s good to hear. With respect to the fourth quarter outlook, fourth quarter 2020 outlook, consensus is calling for around $85 million in revenues, is that kind of where you think the quarter might end up?
John Melo
We think the $85 million without a significant strategic transaction is where we?ll end up. And then with one of the bigger transactions, not the biggest, one of the bigger transactions will be well over that $85 million.''
To me that's a crazy high number without an asset sale....and Melo is hedging here using the term ''significant''. But he's implying they'll be at or close to 85M...which would be a crazy high number. So...is it possible?
Revenues are divided into three basic parts.
Consumer revenue: Melospeak pushed this at a 100M run rate for Q4 I think that is reasonable based on how sales of Biossance are progressing.....so say 25M.
Ingredient sales: Last quarter they did 18M and it was growing consistently at a 25% rage....but that's about to change because four new molecules/ingredients are being introduced this quarter. This is how Melo laid out ingredient growth going forward:
''Our natural ingredient business is delivering what we expect and is expanding significantly this year, with the introduction of four new ingredients, which have the potential to generate an estimated $25 million this year, with strong gross margins.
Three of these four new ingredients are shipping for the first time in the fourth quarter, Squalane for vaccine adjuvant, clean ethanol for use in personal care and perfumes, and CBG as an ingredient and also formulated into several consumer products that we are launching.
We indicated that we would grow our natural ingredients business at 60% to 80% yearly, and deliver 45% to 50% gross margin at scale from this business.
As of the third quarter, our ingredient business is delivering 25% year-to-date growth. The addition of new ingredients that we expect to launch in the fourth quarter will get our annual growth rate in our target range.''
If you combine this conversation with slide 7 from this investor conference you can get an idea that Melo expects ingredient sales to be the main growth driver this quarter.
file:///C:/Users/johnj/OneDrive/Desktop/H.C.%20Wainwright%20September%202020%20Conference%20Presentation%20(5).pdf
While ingredient sales has been the laggard that is about to change (previously growing at 25% with only 10% margins to triple that number with 5X the margin).
So the question is will that 25M he's expecting come in this quarter from those new sales? I'd say that's a pretty big if....but this pump is clearly the reason for the 85M estimate.
If you look give them a 6% sequential bump (25% annual) from Q3's 18M you're pushing 23M...then add 25M in new sales to that number (Melo's pump).
Putting ingredient sales at 48M.
That get us to 73M in sales.
The third revenue generator is royalties and others. Without LAVVAN they'll probably continue doing 5M a quarter....pushing the total to 78M.
Then there is this:
''We are in the process of accessing a $10 million grant from Portugal to fund our vaccine development through Phase 1 trials.''
So maybe give them 5M or so from that grant.....and you end up pushing north of 80M (and pretty close to Melo's pump).
Will it play out like that?
Maybe......add in 40M in revenue from that asset sale and they'll break 100M easily.
It's also interesting Doerr cashed in those 5M warrants (giving the company about 14M in cash) a month early. It's possible they needed that cash early to fund their growth this quarter (he cashed in those warrants before the latest deal was closed).
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