Below is some analysis that I posted following the Decesion Plus interview. This is why I firmly believe the market is playing catch-up.
One takeaway for me from the DecisionPlus interview was Pierre's statement that the filter/resin manufacturing plant on the Isle of Mann has sufficient capacity to produce $100 million in revenues. That is it has sufficient capacity to meeting the growing resin needs of existing clients for the next 5 years or so, including resin sales not only to PLI's bioseparation clients but also all PPPS partner plants.
At the Q3 results conference call Pierre mentioned that the Laval plasma fractionation plant has the capacity to produce $100M in revenues. This plant will achieve commercial scale production in 2016.
At a gross profit margin of 70%, these plants have the capacity to contribute $140M to the bottom line. In addition, Prometic will also earn royalties on sales to its plasma fractionation partners (CNBG, HBI and NantPharma) which could approach $50M (a guess). Fixed costs are estimated at no more than $25M/year. Consequently with current infrastructure and clients, PLI has the capacity to generate $165M in profit per year, which based on 480M shares outstanding translates to 34 cents a share or a valuation of $3.40 using a P/E ratio of 10.
Clearly, it will take time to achieve these revenue levels. On the resin side, big revenue growth is expected in 2014 as it is expected that one of PLI's major clients will get FDA approval of a new drug. On the plasma fractionation side, another big spurt in revenue can be expected in 2015/2016 period as PLI and its partners bring their PPPS plants onstream. As Pierre stated, 2012 will be the best year on record for the company and 2013 and subsequent years even better. This will be driven by increased resin sales to existing clients like Octapharma, Halozyme, Novozyme and CNBG as well as service/development revenues associated with the major contracts that PLI has signed this year and last, including Hepalink, Hematech and NantPharma.
In this context, you can appreciate Pierre's statement that the current share price bears no relation to the value that the company has created. If PLI is ever subject to a hostile takeover, shareholders should insist that the protein division alone should not be sold for less than $3 - 3.50 a share!