Here`s a BIO company with huge potential. I should declare an interest in BPRG before a go on any further.
Most of the tabloids and broadsheets mentioned BPRG. Dealers have been expecting the next big deal, greater than the FMC announcement. This has undoubtedly fuelled the recent heady rise what we have witness last week, which continued on Monday only to pause for breath Tuesday.....fall back actually by 10 points as investor lock in gains ahead of March results.
Rumours and speculation is rife that a deal with one of the large pharmaceutical for BPRG`s NRobe will be announced this week. Any rumour would not be complete without a bid for the company.
IMO there is not the slightest possibility of any hostile takeover until the technology is proven on continuous production in a few sites; and there are no persistent troubles running or sealing the film. No organisation is going to risk the £300m neccessary to make an acquisition until they have the technical confidence.
It is agreed that FMC and HH did their due diligence enough to accept long term high value commitments but it is certain that they were assisted in resolving all normal doubts by plenty of varied and thorough disclosure unavailable to unwanted predators.
That gives at least six months grace. That also gives the share price plenty of time to respond to the following short term events:
The contract cementing the letter of intent due any minute
A third contract hinted at by GH
the first year results due March 8
reaction to the first in depth analyst's report
orders/contracts emanating from FMC's clients
questioning at the AGM
By that time few who know the share well, will be surprised to see a price of £3 - particularly if the company can, at any one of these opportunities, announce satisfactory production operation on a real, substantial market product introduced by Farmasierra, or an FMC client, or at Peter Black now Perrigo.
As pointed out here yesterday the resultant of the forces of greed and fear acting on the share price seems fairly constant with the share price hugging the centre trend +/- 10p, and rising an average of 6p/day . It failed to make an advance today because IMO it outran the trend, and was overbought yesterday. If demand does not deteriorate it is not inconceivable that this trend which broke out on Feb 2 could be maintained, and the £3 level achieved during the spring. That does not mean that I am forecasting that it will - just that it is not at all inconceivable. It equates to a forecast of £10m/pa profit for 2005 - on a PE of 30. For a growth rate of the kind certain to be experienced if the technology works out, that is not too fanciful a PE, and the concomittant £10m profit is well within reach for next year.
