Has the FDA “warning letter” issues been resolved?
For Q1, Q2, and Q3 the gross profit percentage was 65.5%, 64.2%, and 64.2%, respectively. For Q4 the gross profit margin fell to 62.8%. So 75 year old SA can spin any yarn he wishes, the fact remains that the gross profit margin appears to be at a rather depressed level.
On the plus side, the effective tax rate of 31% was quite low. Also, it is likely that CRY will receive close to $8.4 million (pre-tax) from Medafor escrow and milestone payments (small amount in 2014,with bulk being paid in 2015).
SA can talk all he wants about PerClot this and PerClot that, but BCR holds a patent that may prove to be an obstacle to CRY selling PerClot in the US. The outcome here is not yet known, but it does remain a significant risk that CRY shareholders should be aware of and understand. If PerClot can’t be sold into the US market without infringing BCR’s patent, foreign sales/profit will never likely be material in amount. Also, BCR has a second generation product that they will probably submit to the FDA soon too. Note SA likes to talk about the large potential market size ($780m US plus $780n OUS). Story telling is one thing, what happens may be something different.
BioGlue seems to still be doing well. In fact BioGlue may be CRY’s only profitable cost center. BioGlue is off patent. It is possible that Tenaxis Medical could surface as a significant competitor. Check out their website.
Their biggest worry about perclot is FDA approval. They are arguably already two years behind their original date. They're definitely months behind in getting the trial started. I wasn't completely kidding when I wrote about a year ago that the Medafor patent might well expire before perclot is approved which would make that a non-issue.