Lets start out with what they have:
As of Sept 30, 2013
$5M cash + $20M short term investments = $25M total
What they burn per quarter: ~ $5M
So lets revise what they have: ~$20M right now
They dont anticipate completion of P3 until 2Q 2015. $20M cannot last this long. Another large issue is they said themselves they are ramping up the P3 trial and it will cost more money (I wouldnt be surprised to see a 50-100% increase in costs). They were having trouble with enrollment, so im sure they will be spitting out the $$ to try and catch up. Once they do complete the trial, there will be regulatory costs for NDA filing and then more costs for sales reps.
The $75M shelf is a precursor to an offering. IMO they need the whole $75M to avoid any further dilution from now until PDUFA date.
2014 is predicted to be a huge year for M&A. This and NVDQ are great targets with solid products and reasonable PPS and value. Going forward, they DSCI & NVDQ are in the bullseye for M&A.
I fully agree. In about 18 months I expect DSCI to have more than 100 mio. annual revenues. I like that they entered the skin substitute market, shows me that they keep an eye on the competitive environment. If they are not bought out any time soon, they surely have the potential for a far more than 1B market cap, and tripple digit share price. I think it is difficult for the to mess up at this moment in time. Even if DSC127 won't make it, the AWC business will carry them nicely.
I fully agree. With the recent placement they should have close to 100 mio. in cash. 18 months from now I expect this to be a company with more than 100 mio. in annual revenues. I also like that they enter the Skin Substitute Market. Shows me that they are aware of the competitive landscape, and always willing to add to the portfolio. If they are not bought out one day, they will become more than a $1B company, and longterm a tripple digit share price is very likely.
Looking at their cash burn based on Cash And Cash Equivalents, Short Term Investments and Long Term Investments, it was about 4.1 - 4.3 mio. in Q2 & Q3 2013, but this might go up indeed.
They stated in recent investor engagements that costs for the Phase 3 will be 45 - 55 mio., up from 35-45 mio. as stated in December 2012. Why do you think they would now need an additional 75 mio.? Any additional costs for the enrollment should already be included in the latest estimate, as well as the engagement of the recruiting firm.
The AWC is growing well, have you taken that into account? For 2014 AWC sale will be around 45-46 mio, about 11-12 mio more than 2013. With a gross margin of around 50%, this will add 5.5-6.0 mio in additional cash compared to 2013. For the first half of 2015, it might add an additional 3-4 mio.