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Cellmid increases top line sales by 58%, further growth expected

Published: 09:25 29 Apr 2014 AEST

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Cellmid (ASX: CDY) has increased its sales from its consumer health division by 58% to $390,936 for the third quarter ended 31 March 2014 with increased sales activity expected from mid-2014 onwards.

The gain is due to expansion of distribution within existing territories as well as opening up new markets.

Notably, the cash receipts from customers do not reflect this increase as distributors have various trading terms from COD to 90 day accounts.

It is also noteworthy that the revenue increase is higher than the 34% gain to $247,474 in the second quarter.

Meanwhile, the increase in research and development cash outflows to $365,000 from $170,000 in the previous quarter reflected its intensifying anti-midkine antibody program.

Its therapeutic MK antibody program is expected to become clinic-ready by the end of 2014.

Consumer Health

Cellmid noted that since the beginning of the 2014 financial year, sales in the consumer health division continued to increase significantly for the third consecutive quarter.

It added that a critical component of increasing sales is expansion of the distribution within the existing territories as well as opening up new markets. 

Given that the cycle from signing up a new distributor/territory to receiving the first order is between 9-12 months including a four to five months manufacturing period, its new distribution arrangements signed between September 2013 and February 2014 are expected to result in increased sales activity from mid-2014 onwards.

Quarterly

Cellmid recorded revenue of $318,000 for the quarter ended 31 March 2014 and $1.2 million for the nine months to date.

It has $3.38 million in cash as of the 31 March 2014.

Analysis

Cellmid’s Consumer Health Business continues to record strong growth as it continues to expand into new territories.

Bullishly for Cellmid, new distribution arrangements that were signed between September 2013 and February 2014 are expected to result in increased sales activity from mid-2014 onwards which should boost revenues further.

There is every reason to believe that this growth will continue in the months to come in parallel with its MK antibodies research moving to the clinic.

Proactive Investors maintains its share price target of $0.041 to $0.068 for Cellmid within the next 12 months.

 

Proactive Investors Australia is the market leader in producing news, articles and research reports on ASX “Small and Mid-cap” stocks with distribution in Australia, UK, North America and Hong Kong / China.

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