Pressure BioSciences (PBIO), High Growth Expected for 2013 and Beyond
By Grant Zeng, CFA
Another Strong Quarter of Product Sales is Expected
After booking record sales of PCT products in third quarter of 2012, we are expecting another strong quarter of product sales for fourth quarter of 2012.
We estimate product sales of $0.32 million for the fourth quarter of 2012, a 79% increase compared to $0.18 million product sales of 4Q11. These product sales include PCT equipment and consumables.
Grant revenue is expected to be $0.10 million for 4Q12, compared to $0.16 million for 4Q11.
Total revenue based on our estimate will be $0.42 million for the fourth quarter of 2012, compared to $0.34 million for the fourth quarter of 2011, an increase of 25%.
Gross margin for product sales is estimated to be 65.6% for the 4Q12, compared to 48.5% for the 4Q11, a 35% improvement.
Operating loss is expected to be $0.7 million for the 4Q12, compared to operating loss of $0.9 million for 4Q11, a 22% improvement.
We estimate that net loss will be $0.9 million or $0.08 per share, compared to net loss of $2.0 million or $0.30 per share.
Based on the improvements of financial results for the last three quarters of 2012, and the aggressive commercialization strategy the Company has implemented in 2012, we expect revenue will enter into high growth in 2013 and beyond. From 2012 to 2015, net product sales will grow at amazing 118% compound annual growth rate (CAGR). PBIO will become profitable in fiscal 2015 with EPS of $0.06 based on total revenue of $11 million.
We think the share price of PBIO is undervalued. At this time, the downside risk is low while upside potential is high for the Company.
Leadership Strengthened by Appointing New Chief Financial Officer
On December 5, 2012, Pressure BioSciences, Inc. (OTC Markets:PBIO) announced that Mr. Conrad F. Mir has joined the Company as its chief financial officer, effective immediately.
Mr. Mir has over twenty years experience in investment banking, financial structuring, and corporate reengineering. He has served in various executive management roles and on the Board of Directors of several companies in the biotechnology industry. Most recently, Mr. Mir was chairman and CEO of Genetic Immunity, Inc. (:GI), a plasmid, DNA company in the HIV space. Prior to GI, Mr. Mir served as executive director of Advaxis, Inc., a vaccine company. During his tenure at GI and Advaxis, Mr. Mir was responsible for raising nearly $40 million in growth capital and broadening corporate reach to new investors and current shareholders.
Prior to GI and Advaxis, Mr. Mir worked for several investment banks including Sanford C. Bernstein, First Liberty Investment Group, and Nomura Securities International. He holds a BA/BS in Economics and English with special concentrations in Mathematics and Physics from New York University.
PBIO recently announced record PCT product sales for the third quarter of 2012, and we expect another strong quarter of product sales for the 4Q12. The Company has implemented aggressive commercialization strategy in 2012 to accelerate the revenue growth of its patented PCT products and services which included, among other things, an increase in international sales and distribution coverage from three to over twenty countries. But PBIO needs to properly finance this initiative. This is currently the biggest concern.
We believe the strong investment banking background of Mr. Mir will help PBIO raise new capital to fund its operations. It is also one of Conrad’s best strengths. He has proven over the past few years that he has the ability to raise significant funds for small, developing companies in a smart and timely way.
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