Junior member
BioProgress has been taking a right good tanking lately, a complete reversal of its all time high of 165p, be it in its short time since floatation last year. A major factor is the litigation with Stanelco over a patent dispute, add the fear factor related to BPRGs un-authorised listing on the Berlin exchange where many UK and US firms have found themselves traded, or should I say, Naked Shorted.

It is worth casting ones minds back in order to keep things into perspective though, as my colleague Conrad argues.

The path to true love does not run smoothly, nor, would it seem, does the long and winding road to riches. These are frustrating times for BioProgress shareholders; no one said though that this would be like winning the lottery overnight, more like a few years.

I last made any sort of detailed comment on BioProgress on 7th April, discussing the acquisition of Aquafilm, now BioTech Films LLC, and juggling around with a few numbers. I understand that the market misunderstood the announcement regarding the forecasts for BioTech Films that I first wrote about.

BioProgress state that BioTech “is forecasting revenues of around US$50 million in the period 2004 – 2006”. Adding up the forecasts in my initial article for the period 2004 – 2006 gives revenues of US$54.2 million. What is $4.2 million amongst friends? Converting the US profit of $3 million into pound sterling gives a profit of £1.7 million for 2004, rising to £2.8 million in 2005, and £4.8 million in 2006.

With the financial performance of BioProgress now stabilising as the company moves from the stage of development to commercialisation, the figures in the market from Numis Securities look sensible. In their note dated 23rd June ’04, Numis forecast pre-tax profits of £1 million for 2004, rising to £5 million for 2005, EPS for 2005 is therefore 4.4p, putting the company on a 2005 PE of 15.13. For what it’s worth Numis’ stance is ‘Hold’.

Investors though are still eagerly anticipating the detailed report from house broker Collins Stewart. There have been suggestions that the forthcoming broker note has suggested a ‘fair value’ of between 130p – 140p, valuing the company at between £150 million to £160 million. At this stage that would appear a sensible valuation, and is 100% higher than the current share price. Only time will tell whether the rumoured valuation of BioProgress proves to be right or wrong, but, either way, there can be no guarantees that the share price will react in the way that the broker note might imply it should.

BioProgress have a lot of expectant shareholders, who have been awaiting the broker note from Collins Stewart since early-2004. Whilst it is important to present all the facts, Graham Hind could have been more professional with regard to his timescales. In industry though everything seemingly takes longer than anyone could have first imagined it would, four months for a broker note is pushing things somewhat. Those jigsaw puzzles with the most pieces always do take the longest to complete though, don’t they?

The innumerable jigsaw that is BioProgress has seen a few more pieces joined together over the last few months. One of the more important pieces has been the announcement about listing American Depository Receipts (ADR’s) on the American NASDAQ.

ADR’s were first introduced in 1927, and are simply an allocation of stock in a non-US business. The company’s primary listing will remain on AIM, but a proportion of the shares will be brought by an American investment bank who will issue the ADR’s on the NASDAQ.

The dual listing on AIM and the NASDAQ will create a more efficient trading platform, especially as there are a significant number of shareholders already based in America, from when the company was listed on the NASD OTC BB.

2004 has seen stronger links forged with America, with licensing agreements signed with FMC BioPolymer, Perrigo and Wyeth for three of the four core XGel technologies, namely NROBE, TABWRAP and SWALLOW. Furthermore the base of BioTech Films LLC (formerly known as Aquafilm) is in Tampa, Florida, USA. It is likely that BioProgress will continue to have further relationships forged in America, and that its reputation will grow further in the pharmaceutical industry. Therefore a dual listing on the NASDAQ will be of importance to the company. It is testament to the rapid progress that BioProgress has made that they have brought forward plans to list on the NASDAQ.

An announcement on 5th July confirmed that Perrigo is the US pharmaceutical company that has signed a global licensing agreement for TABWRAP. Valued at $1,25 billion, NASDAQ listed Perrigo is America’s largest manufacturer of over-the-counter (non-prescription) pharmaceutical and nutritional products sold in supermarkets, chemists, and large merchandise chains across the country.

BioProgress are to receive $900,000 when the first product hits the shelves, which is anticipated for late 2005, although, as always, timescales might slip. Initially TABWRAP is to be applied to a small selection of Perrigo’s products, expected to be worth between $1 - $1.5 million to BioProgress per year. The company also receive a single-figure percentage royalty, rumoured to be 3%, based on the sales price of all products using the TABWRAP dosage form.

It is worth considering that the OTC market in America has been valued at $10.8 billion (£6 billion) per year, of which Perrigo is the market leader. The European market, which Perrigo will also target with TABWRAP, is substantial as well. If, as expected, TABWRAP proves to be the great success that many of us believe it will be, then BioProgress will enjoy a royalty stream in the region of millions of pounds per year rolling into its coffers.

The other significant announcement regarding an XGel family member has been the “exclusive licensing option agreement with Wyeth for SWALLOW liquid fill capsule technology.” The announcement might be considered disappointing by some, as it does not confirm Wyeth’s commitment to the technology. On the other hand it is testament to the untold advantages that the XGel technologies bring with them, that $50 billion Wyeth is bothering with a small £70 million British company.

Once again however it is impossible to say exactly when Wyeth might sign on the dotted line to confirm their commitment to SWALLOW. It has to be expected that Wyeth will commit to adopting the SWALLOW liquid fill capsule technology, and plans for Harro Hoefliger to provide the machines have already been made. Once again, the importance in acquiring BioTech Films LLC is evident, with the film being supplied from its base in Tampa, Florida.

14th June saw the strengthening of management in several areas. Alan Clements, the former managing director of Peter Black Healthcare, was appointed as Director of Sales and Marketing. Dr Jason Teckoe took up the position formerly held by Malcolm Brown, that of Technical Director of UK based BioProgress Technology Ltd and of BioTech Films LLC in America. Dr Teckoe is concentrating his efforts most especially on XGel film development. Meanwhile Ed Nowak has been appointed as Director of Research and Development, engaged in the research of new materials and applications.

And so, midway through July, we have a stronger, more advanced BioProgress than ever before, and yet we have a lacklustre shareprice of 65.5p, prices that have not been seen since for seven months. It was Tolstoy I believe who said, “The two most powerful warriors are patience and time.” Oh how these two most powerful warriors fight away at the beliefs of the private investor. Indeed, the path to true love never does run smoothly.

Please note that I and Conrad hold shares in BPRG


Junior member

I am not a TA man myself which leaves me feeling unqualified to reply to your post as TA investor would. However, I will have a stab at answering your query as how I see events unfold. At present I do not see a turn round in the share price from its negative trend until the litigation with SEO is resolved in favour of BPRG, which I fully expect to be the case. At which point, the bear grip which has pulled the share down from an over-bought position of 165p should see what many believe to be a fair value in the short term of 110p to 120p. I suspect that the litigation with SEO is preventing CS from releasing their note on BPRG which again i expect to give the shares a renewed push to higher ground.

Its fair to assume that the litigation with SEO is weighing heavily on the share price of both (though I note SEO is up this am on patent news) Normally recent news events for BPRG would have pushed the shares higher, but the bear grip has prevented this from happening while the court case is in progress.

I am hearing that SEO have been found to have altered dates of some of their documents which could hinder their case. This is just gossip from people who have been at the hearing.


Active member
Bioprogress attempts to come out with bullish RNS every once in a while whereupon it spikes a little and then pulls back.The Lemming article produced such a spike in the past few days.No doubt BPRG will revert to type and spike down again this week.
Hot shot biotechs are unloved at the moment........PRM, AZM are other such examples.
Until the sector comes back into favour, they are likely best shorted for the adventurous and avoided by their supporters till sentiment changes.


Senior member
TA looks interesting from a long point of view, last couple of days trading, and good vol and 5.1% and 7.3% to end at almost the high. This coincides with the summing up at the court case... so draw your own conclusion. DYOR etc


Junior member

Its a very nice thought to have such an impact on a share as to cause a spike when you publish an article like the one Conrad did. However, I strongly suspect the recent spike has more to do with events in the court room, more specifically due to SEOs poor defence of "their patented technology" which looks to be weak, to be kind. Assuming the bears have been feasting heartily, they may have time for yet another bite whilst the judge goes on his jollies, at which point, we may need to wait until around September before he makes his decision.

AZM; We also covered AZM last year at 112p ( i was nearly caught napping as they broke favourable news related to its obesity drug. The share did race ahead to 210p before reversing when it became clear no bid was forthcoming, and a CEO comment that he thought the shares were over-priced at 185p? They now trade at 140p, further potential?? I think so.

The Bio sector as a whole is a volatile one for sure. Most Bios are cash strapped, in need for 3rd party funding, or rights issues a must while licencing revenues become a reality. That said, the Bio sector is one that will make or break your portfolio if your not clued up. Stop-loss.....Yep, for sure!!


Junior member
Shorters of BPRG have had a merry time all the way down from 162p, but now the downside is limited to about 55p, whilst the upside remains at 160p and even more, although the timing between now and May next year is very unpredictable. There is also the possibility of hostile takeover bids. So shorters have an unattractive low gain, high risk target, and whilst lurking around hoping for large spikes, have largely moved on. This gives the share a chance to recover in line with genuine increases in, and perception of real added value.

With the exception of inference on Aquaflow's high sales and profit growth, newsflow has been entirely about global high value contracts "subject to commercialisation", which means that value remains elusively dormant in the lands of Hope and Expectation. There has been important news of an imminent move onto the Nasdaq market, and the umpteen times postponed promise of a broker's note without which the institutions are prevented from becoming holders.

By May 2005, there should be considerable visible progress. Some machines should have emerged from Harro Hoeffliger, and be on test with FMC major pharma clients, their sales price and profitability, protected by a multiplicity of patents, by then known, and certainly on astronomical margins. Aquafilm sales growth should be confirmed as having exploded in the USA and be beginning to penetrate the european market. There should be announceable progress towards having installed and commissioned at least one of two projected manufacturing plants for the patented X-gel film; and Convertec should be showing its hand in developing and marketing the flushable ostomy bag, which would also add value not yet in the share price. - There may even be revenue emerging from Farma Sierra reflecting identified and established markets by announcing contract packaging gains That is just some of the anti-shorting upside. The biggest short term movement is likely to be brought about by an efficient launch on Nasdaq, but the management have yet to demonstrate that they have learned something, and acquired competence in the field of Investment relations, which they have, to shareholders serious disadvantage, seemingly held in contempt.
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