SUD 0.00% 4.5¢ suda pharmaceuticals ltd

Im back in!

  1. 3,958 Posts.
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    Hi folks

    Long time no post! Sorry in advance, this one may be a long one

    For the newbies on here I was a SUDA shareholder for over 10 years and sold out a couple of years ago as the company wasn’t performing to my expectations. I was part of the SUDA ”cheer squad” but did make the very hard decision to sell.

    Anyway, after holding a stock for a decade its very hard to just sell and move on and completely ignore the company so I have kept it on my watch list and followed the announcements as they have come out over the last couple of years.

    After watching the share price fall pre-consolidation to 0.4c I started getting interested again but the decision to purchase stock again was due to two factors .. 1) the new management team and 2) the valuation of the company.

    The AGM presentation that PH gave late last year was the tipping point for me... that was a very honest and frank assessment of where the company is at. It was a very unusual presentation but an excellent presentation IMO.

    When thinking about the last 10 years (well at least since the Novadel acquisition) it appears the company was seeking to be a jack of all trades and a master of none.
    I suspect this is not the strategy that Paul Hopper and now Michael Baker want to employ. I agree with this.

    And then the consolidation occurred with a 0.2c old share price and this has provided an opportunity that frankly I didn’t think would exist. It has been these levels in recent weeks that I have taken advantage of.

    I thought the announcement regarding the Sanofi deal would send the share price significantly north but there was (and to certain extent still is) a significant amount of negative sentiment towards the company. And I of course can understand why... the share price has been going in one direction for the past decade with timelines missed, public statements not followed through, and the execution of the business plan hasn’t occurred as well as expected.

    I totally understand why the share price and market cap is where it is.

    But this is where the opportunity lies....

    With a 5.6c share price the market cap is less than $8m. This is an extremely attractive risk/reward opportunity for those with a bit of patience.

    Now what do I think when I think about the opportunity? Well for me I think the IP and products that the company acquired as part of the Novadel acquisition will largely not amount to much in the form that the company acquired them.

    I think the hydrotrope technology that the company has been working on will ultimately be the key to its success. I think Anagralide is at forefront of this and this will be the driver of sentiment in the company over the comping years. Anagralide and then Midazolam. The products that SUDA is spending most of its time working on is where the company will get the most success.

    My base case is that we will see little if any revenue from Zolpimist as the regulatory approvals that the company is waiting on is late and this is never a good sign. I don’t have a good handle but my working assumption is that Zolpimist isn’t gaining market share in the US either.
    I would be surprised if the cannaboid products take off and sumatriptan and duromist... well for me my hopes are not high.

    I am being a realist and I think the market is telling me that this is the right approach.

    But the company has been busy in the lab and I think this cannot be overstated.
    In fact I see the company now as one that that has 2 very early stage products but with many many years of R&D and most importantly a strong patent position. It also has some low risk/high reward opportunities with Sanofi and Ordesa (and I think these types of deals will be a key plank to the business model going forward).

    If a company with 2 early stage products (obviously based on existing medicines), a strong R&D history and an even stronger patent portfolio and IP protection were to IPO on the ASX I think the valuation of the company would be significantly more than the $8m we are at today.

    Now Buckland is spot on with all the broken promises and missed timelines but what is exciting now is that there is a new and motivated management team to drive SUDA 2.0 forward.
    I know Wasa has commented on the fact that SUDA’s year will not be 2020 and maybe not even 2021 and he is 100% right when it comes to revenues. But this is the beauty of investing in microcaps and in particular the biotech space.... the company does not need revenues to have a rising share price and an increase in value.

    And this is what I believe will occur over the coming years as long as the new management team AND the lab make strides (not the company we did the SUD-001 deal with ) in the development of Anagralide, Midazolam, Sanofi, and the Ordesa agreements. Anything else is icing on the cake especially given it was executed by the prior management team.

    I expect a capital raising shortly and I am sure it wont be the last and the truth is there is nothing wrong with this (just look at AVH with its $1.3bn market cap and all the CR’s they have done over the years). I hope the company hangs onto Anagralide and Midazolam for as long as possible so they can extract the most amount of value. But hey I dont work there but I’m confident Paul Hopper and Michael Baker will make the right decisions.

    I feel that the best time to buy is when sentiment is extremely negative... be fearful when others are greedy and greedy when the others are fearful. I feel this is the situation that exists today (and for good reason as I have mentioned above) and that is why I (and others) have been buying stock. There will come a point in time when everyone that has had enough of the company will have sold out and then with some positive announcements the share price will move up and will hopefully be sustained.

    So there you have it. Sorry for the long post but I’m back in.. fully 100% with my eyes open and conscious that a lot has gone wrong with the company but I do believe that we are approaching the point where we are in for a sentiment change.

    That is what I have positioned for.

    Good luck all.

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