No real profits yet at ML Labs
The Investment Column
Thursday 26 June 1997
Though valuing biotechnology groups is subjective, analysts reckon the price looks about right at the moment. That might look a surprising conclusion, glancing at ML's interim figures.
Turnover for the six months to March almost doubled to pounds 5.6m and the group reported a pre-tax profit of pounds 2.9m, several times the pounds 0.8m produced in the previous half. But as Stuart Sim, ML's newly elevated chief executive, rightly points out, the numbers are not quite as good as they look.
The profits are in fact access fees - payments made by partners Baxter and Medeva for the rights to ML products - plus a hefty pounds 1.5m from medical device group Bespak as part of a legal settlement. The cash is handy, but with around pounds 27m in the bank and with a cash "burn" of around pounds 5m a year, ML has plenty to keep it going.
Even so, as ML also acknowledges, royalty receipts are the real measure of the commercial success of the group's products and they will not add up to much for a few years. Hence the share price.
In the longer term, ML's products sound promising. ML says its kidney dialysis solution, Icodial, is kinder to the body than the traditional glucose solution and needs to be replaced less often. That Baxter, which has three-quarters of the dialysis solutions market, is its partner is a good sign. But until investors see sales turning into real profits, they should stay cautious.
- 1 Tidal launch: The most pretentious lines from Alicia Keys' valedictory speech
- 2 Britain First 'acting like Ukip henchmen' by invading meeting of activists in revenge for pub protest against Nigel Farage
- 3 Katie Hopkins attacked me on Twitter — so I reported her to the police for inciting racial hatred
- 4 Tidal: Jay Z's Spotify rival streaming service criticised for making wealthy artists even richer
- 5 Brixton squat flats now costing up to £3k per month show how out of control rent is in London
Britain First 'acting like Ukip henchmen' by invading meeting of activists in revenge for pub protest against Nigel Farage
Costa Concordia: Shipment of Mob drugs was hidden aboard cruise liner when it hit rocks off Italian coast, investigators say
Brixton squat flats now costing up to £3k per month show how out of control rent is in London
A new (old) cure for MRSA? Revolting recipe from the Dark Ages may be key to defeat infection
Turkey power cut: Prime Minister says nationwide blackout could be caused by terrorists
Ukip supporters are 55 or older, white and socially conservative, finds British Social Attitudes Report
Street preacher quoting from the Bible fined for calling homosexuality an 'abomination'
Woman filmed launching racist tirade against men on the Tube for speaking in 'own lingo'
The West has it totally wrong on Lee Kuan Yew
David Cameron calls Labour 'hopeless, sneering socialists' while announcing 7-day NHS plans
Revealed: Putin's army of pro-Kremlin bloggers
iJobs Money & Business
£45000 - £50000 per annum + benefits : Ashdown Group: A highly successful, glo...
£50,000 - £55,000: Neil Pavier: Are you a professionally qualified commercial ...
£45,000 - £55,000: Loren Hughes: Are you looking for a new opportunity that wi...
Circa £45,000-£50,000 + benefits: Sheridan Maine: Are you a newly qualified ac...