I think we are going to see a dramatic uptick in earnings with SOUT. The Sevoflurane market in the U.S. is at conservative estimates $350M. In the Oppenheimer Report RxElite delivered a forecast of 11%-15% yr-yr market growth: that is $38.5M to $52.5M in market growth for RxElite.
The recent Oppenheimer Reports which focus on Rx Elite’s distribution agreement for sevoflurane in the United States for Minrad International paint an excellent portrait of the opportunities here.
Today we examine the June 28, 2007, Oppenheimer Report
In a nutshell:
Initial rollout on track to ahead of targets. RxElite indicates that they can meet their 2007 contractual Minimums.
RxElite has been able to generate Sojourn shipments to date even without dramatic vaporizer placements. The company has specifically targeted about 15% of surgery centers that already have their own vaporizers.
RxElite is forecasting 11%-15% yr-yr market growth (in volume), well ahead of our 5% yr-yr projections.
This could present upside to our numbers (OPCO projects 102,000 Sojourn bottles sold in 2007).
RxElite has not seen a sharp competitive price response from Abbott or Baxter (the only two other distributors IN THE WORLD).
Pricing is expected to drop 5%-10% over the next few years, although this could be moderated if the organic growth of the market absorbs RxElite’s share grab.
OPCO’s channel checks indicate that pricing ranges from $205/bottle to $165/bottle, with the industry average being about $170/bottle.
We were impressed by the understanding of the market by senior management at RxElite. They appear to be well positioned as a smaller company to grab share in this large market dominated by two players.
RxElite is off to a successful launch to date on Sojourn, and has the management team and financing in place to continue to drive growth in the marketplace.
Servoflurane
Stay tuned for details from the August 18, 2007, Oppenheimer Report.
Investor Profile from Rx Elite
Source: RxElite Holdings, Inc.
RxElite Holdings, Inc.
Ph: (208) 288-5550
Toll Free: (800) 414-1901
Fax: (208) 288-1191 Investor Relations
Charlie Forshee, 215-885-4981
investorrelations@rxelite.com
Segue Ventures LLCAbout RxElite Holdings, Inc.: RxElite Holdings, Inc. develops, manufactures, and markets generic prescription drug products in specialty generic markets. These markets include products in the areas of anesthesia, sterile liquid dose drugs (including respiratory inhalation drugs, ophthalmics, and injectable drugs), and transdermal patch products.
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