Posts Tagged ‘Investment’

Cefour Wine is based in Åhus on the southern east coast of Sweden. The company produce, sell and distribute specially designed, practical and ready-to-drink wine glasses made of recyclable plastic.

Cefourwine media (commercial video, youtube)

Last year, CESI invested in Cefour AB and quickly sold the holding shortly thereafter. The outcome was a depressive ~20% percent net loss. However, a minimal loss in retrospect – and in relation – to the big picture. In 2014, the company was near a bancrupcy.

cefour

Obviosusly, the company encountered multiple major issues (The 2014 full years report and Jan-Sept 2015 interim report).

Now, the situation appears to be slightly more stable. The ongoing rights issue is guaranteed. After the most recent press release (see below), CESI speculates in a turnaround. CESI also believes in the Cefour concept and the accompanying global potential. CESI also belives in the new Cefour strategy. Currently and potentially, the market seems to share this relatively bullish conclusion, both in terms of…

the recent and current unit price…

cefour unit…and..

…in terms of today´s shareprice (0.04 SEK) compared to price per share in the guaranteed ongoing rights issue ( 0.3 SEK obtained from 0.42 / 14 read more)…

cefour week

Coincidentally, Easy wine (from Cefour), was served at the author´s (large) company´s 2015 Christmas party (via catering). The wine was surprisingly well tasting (in relation to CESI´s low expectations), and above all: “easy wine – easy drinking” resulted in a slightly too drunk author eventually joining the dance floor crowd (CESI normally avoids dance floors, primarily due to low quality DJ´s)

During the last days, CESI has been buying Cefour shares and rights issue units with an initial net +20% profit. Obviously, CESI has subscribed to the rights issue.

INSIDER PURCHASES

Recently, small insider purchases have been reported see link below:

http://www.aktietorget.se/InstrumentInsider.aspx?Language=2&InstrumentID=SE0006345195

CONCLUSION AND RECENT PRESS RELEASES

A high risk/high reward case? Today, a substantial and solid risk/reward ratio is impossible to predict. Survival of Cefour might equal instant success due to the very low Cefour market cap. Obviously, the worst case scenario would result in 0% return of investment. Due to the recent press releases (see below) and the guaranteed rights emission, CESI is bullish. After all, CESI is sufficiently confident that Cefour “aint a empty basement category company”:

“Cefour´s production techniques are high-technological and environmentally adapted. The ready-to-drink disposable wine glasses and the production line development are conducted in close collaboration with our suppliers.The result is one of the world’s most advanced production lines for pre-filled disposable packages, where machines and robots are linked into one complete manufacturing line. It begins with a roll of recyclable plastic at one end and comes out as pre-filled, sealed glasses allready placed in suitable transportation packages, ready for distribution. The manufacturing takes place in our own production facility in Åhus, Sweden.” Reference source link

The company´s priority is cost savings and focus (consumer segments and sales). Recent press releases indicates a possible near future turnaround…

  • December 15, 2015: Sales at Wembley arena

http://cefourwine.com/category/pressmeddelanden/

  • November 20, 2015: New partner at the Spanish market:

http://cefourwine.com/2015/11/ny-samarbetspartner-for-den-spanska-marknaden/

THE SPANISH PARTNER

http://www.1010premiumdrinks.com/en/company/index.html

Unfortunatelly, no financial information is found on the homepage of 1010 premium drinks. The facebook page has retrieved 15 thousand likes.

https://www.facebook.com/1010premiumdrinks?fref=ts

  • June 10, 2015: New order and concept for Bråvallafestivalen

https://www.avanza.se/placera/pressmeddelanden/2015/06/10/cefour-ny-order-samt-nytt-koncept-for-bravallafestivalen.html

  • November 21, 2014 Bear Smyth will launch pre-filled Cefour glasses in England under other trade marks (original title edited by CESI).

https://www.avanza.se/placera/telegram/2014/10/21/cefour-forfyllda-glasen-borjar-saljas-i-england.html

  • April 28, 2015, Cefour proposes to broaden the business

https://www.avanza.se/placera/pressmeddelanden/2015/04/28/cefour-breddning-av-verksamheten-foreslagen.html

Further reading: http://cefourwine.com/

.

Best regards, CESI

Disclaimer: The author, Cutting Edge Science Invest, is currently a Cefour AB share holder. Cutting Edge Science Invest can not guarantee, or take into accountability, the content of truth and accuracy of the information in this article/post.Thus, Cutting Edge Science Invest requires that a possible reader gather complimentary information if any type of investment in the company described above is considered. Cutting Edge Science Invest provides personally biased information and at best also “general information and opinions”. The article/post does not contain professional investment advice. 

Anoto Group AB is a global leader in digital writing solutions, which enables fast and reliable transmission of handwriting into a digital format. Anoto operates worldwide through a global partner network that delivers user-friendly digital writing solutions for efficient capture, transmission, distribution and storage of data. Anoto is currently in use across multiple business segments, e.g. healthcare, banking and finance, transportation and logistics and education. The Anoto Group has around 100 employees and is headquartered in Lund (Sweden). The company also has offices in Basingstoke and Wetherby (UK), Boston (US), Los Angeles (US) and Tokyo (Japan). The Anoto share is traded on the Small Cap list of NASDAQ OMX Stockholm under the ticker ANOT.

In person, the author (CESI) relatively recently attended this Redeye investor forum (Gothenburg, October 16):

http://www.redeye.se/webcast/investor-forum-14-oktober-anoto (VIDEO in Swedish, October 14)

The author CESI appreciated the CEO Stein Revelsby´s presentation and especially the following comments (depicted, edited and translated verbal comments from the link above):

“To be a share holder in Anoto has been equivalent to bad business, but we will not give up until we will deliver a success”

”Panasonic is not a small shit business…”

”in Los Angeles, we have frequent office visits by Dreamworks, Disney och Adobe and there we have positioned ourself amongst all the big players – this would not be possible working in/from Lund”

“We are totally dependent of choosing a partner (company) that has a well established market share. In this case, we only need one customer to secure a 10% market share. If we achieve that, business will be fantastic”.

Some additional interesting CEO comments in the most recent “red number Q3 Quarterly report” (of course, and as always, with a bullish CESI perspective). http://www.anoto.com/media/1546/anoto-quarterly-report-en-q3_14_final.pdf

“Revenues in the third quarter was MSEK 27.1 compared to MSEK 31.3 for the second quarter. Gross margin was 65% compared to 63% in the second quarter. Operating expenses were MSEK 34.7 in the third quarter compared to MSEK 36.8 in the second quarter. EBITDA was MSEK –20.7 compared to MSEK -17.3 in the second quarter. Cash flow for the quarter was MSEK -11.4, including MSEK 3.7 of net payment from the private placement in June/July and MSEK 2.8 from a short term loan in September. The 3rd quarter was another weak quarter with respect to sales for Anoto and we had to ask our shareholders for funding once again. The rights issue is guaranteed to 90% by a consortium of Swedish investors and will provide 68 MSEK in cash before transaction costs and fees to underwriters if fully subscribed. Despite a weak quarter we took another major step towards growth and profitability by developing a successful prototype for one of the world’s largest IT companies. The project is progressing well with the objective to launch a high end digital writing solution for displays in the second half of 2015. This follows a successful product launch with Panasonic which has opened up for new opportunities to become a digital writing platform for display manufacturers who are looking for high precision, easier integration with touch technologies, larger displays and the possibilities to use more than one pen per screen. The negotiations announced on June 19th about divesting our Business Solutions business was terminated in August. The purpose of the proposed transaction was to realize the full potential of the business solutions segment with a strategic partner to enable a stronger marketing and sales presence. However we did not come to agreement on price and decided instead to consolidate all our wholly owned digital paper based business solutions business into a separate business unit, Anoto Enterprise Solutions in the UK. Anoto Enterprise Solutions will continue to support customers in the UK and also Business Solutions partners world-wide. During the 3rd quarter several larger opportunities has evolved within healthcare, banking, insurance and field service in Germany, UK, Turkey and Japan. We continue to focus on costs and we did further adjustments to reduce OPEX in Q3 by deciding to close our office in Holland and move all Business Solutions related activities to the UK. We see further potential to reduce costs in 2015 but we are cautiously aware that we do not want to reduce the upside revenue potential of our business. Once the lease expires we will move the Swedish organization to a new office in Lund from September next year which will reduce the operating expenses.

OUTLOOK

Following Panasonic product launch and now significant interest from some of the world’s largest IT companies Anoto’s strategic direction will shift to capitalize on its unique position as the leading provider of high precision digital writing solutions for small as well as ultra-large screens and the rapidly increasing demand for collaboration solutions. Initial market focus will be on high end market segments where users demand high accuracy, fast and reliable interaction and multiple users per screen. Touch Display Research estimates that active digital pen shipments will surpass 90 million units this year and increase to more than 500 million pens in 2020. By working with some of the world’s leading brands we see a large opportunity to participate in this market. In the short term we expect a significant improvement in revenues in the coming two quarters both within Business Solutions from ongoing projects as well as within our OEM business with customers Livescribe, Smartmatic, Tstudy, Steelcase and others.

 

BUSINESS SOLUTIONS

Business Solutions focuses on systems, products and services that target businesses, primarily in the field of forms processing and data capture. The offering is Pen Solutions which includes solutions for creating a form in digital format, digital processing of handwritten forms and automatic generation of a digital version of a document with handwritten signatures and notes. Anoto has an indirect business model and markets its products through partners, such as system integrators, software developers and IT consulting firms, all of which offer customized solutions with Anoto technology to their customers. Net sales during the period were MSEK 66, which is MSEK 6 below net sales during the same period last year. We shipped approximately 3,000 pens to partners and customers within business solutions in this quarter. The negotiations announced on June 19 about divesting our Business Solutions business was terminated in August. We did not come to agreement on price and decided instead to consolidate all our wholly owned digital paper based business solutions business into a separate business unit, Anoto Enterprise Solutions in the UK. The potential transaction took significant management resources and attention which hurt our business. During the quarter we took immediate measures to reduce OPEX within business solutions by 5 MSEK on an annual basis, including a decision to close our sales office in Holland. Further optimization and cost reductions will be considered for 2015.

EMEA

There were no larger deals in the quarter. The pipeline looks strong for the coming two quarters especially in Germany and the UK. The Nursing Tech Fund 2 is expected to be announced before year end. The successful roll-out of 1,100 pens in combination with iPads to the large bank in Q2 has reached the industry press and more financial institutions are evaluating our solutions.

INDIA

Our business development efforts in India are paying off resulting in the first 100 pens of a roll-out in total of approximately 2,200 pens and Anoto Live Forms in the services sectors.

TECHNOLOGY LICENSING (OEM SALES)

Customers within Technology Licensing develop and sell products based on our intellectual property, software, and digital pen products. For many years, Anoto has licensed its technologies to providers of interactive classroom solutions as well as learning aids for children. Productivity tools, such as for note-taking and meeting productivity, are also long-established products in our Technology Licensing segment. Recently, Anoto has established two new application areas through partners: voting solutions and digital design automation. Voting solutions are based on our traditional digital paper technology, while digital design automation solutions help animators and designers unleash the creative power of digital writing with interactive touch displays.

Net sales during the period were MSEK 23, which is MSEK 7 lower than the same period last year.

In Q3 we delivered 5,000 pens to partner Steelcase for interactive whiteboard solutions and 5,000 pens to Tstudy China. Livescribe sold approximately 45,000 pens in the quarter. No significant deliveries were made to other OEM partners in the quarter. Anoto has ongoing discussions with new partners and has noticed a significant increase in interest for the company’s technology, especially in the wake of the company’s partnership with Panasonic. We invoiced the first Non Refundable Engineering contract for the successful development of a prototype for one of the world’s largest IT companies. The project is progressing well with the objective to launch a high end digital writing solution for displays in the second half of 2015.

C TECHNOLOGIES

C Technologies develops, manufactures and sells C-Pen®, a handheld scanner solution with character recognition software. The C-Pen captures printed information such as text, numbers and codes, decodes the information and transfers it to computers and smartphones. The products are made available through the C-Pen brand and as OEMbranded versions. Net sales during the period were MSEK 6 which is MSEK 1 higher than during the same period last year. The business was downsized during last year. C Technologies continues to sell its products to OEM customers as well as within select retail channels.

RISK FACTORS AND UNCERTAINTIES

At the close of the quarter, the group’s total cash amounted to MSEK 1.9 which is a decrease by MSEK 5.1 compared to year-end of 2013. Anoto’s current working capital is not sufficient for the Company’s needs for the next twelve months. The Company believes that if the Company’s earning capacity is not improved, the capital injection of up to SEK 68 million before costs from the rights issue is not sufficient to cover the estimated capital need. In that case, the Board intends to submit a proposal to issue new shares at a general meeting. Based upon this the Board believes that the financial statements shall be prepared applying the going concern principle*. The Convertible loan issued in June this year will mature at the end of February next year. Should full conversion take place there is a possible cash flow upside of up to 16.3 MSEK

*The going concern principle is the assumption that an entity will remain in business for the foreseeable future. Conversely, this means the entity will not be forced to halt operations and liquidate its assets in the near term at what may be very low fire-sale prices. By making this assumption, the accountant is justified in deferring the recognition of certain expenses until a later period, when the entity will presumably still be in business and using its assets in the most effective manner possible. http://www.accountingtools.com/going-concern-principle

Anoto Digital Pen solution for Education (Mars 29, 2014)

https://www.youtube.com/watch?v=VPTYWhFH7f8 (VIDEO)

Anoto Digital Pen solution for Healthcare Industry (Mars 29, 2014)

https://www.youtube.com/watch?v=pFNZtCmBPDc (VIDEO)

Anoto Digital Pen solution for Facilities Management (Mars 29, 2014)

https://www.youtube.com/watch?v=6SgDq8-Pfp4 (VIDEO)

Anoto Digital Pen solution for Pharmaceutical Industry (Mars 29, 2014)

https://www.youtube.com/watch?v=MYWSK-LFSpI (VIDEO)

Two weeks after the Gothenburg visit, the CEO Stein Revelsby presented at Investor forum in Stockholm:

https://www.youtube.com/watch?v=lKueuSnqWgE (VIDEO in Swedish, October 29)

…and then again in November 24…

http://www.redeye.se/webcast/technology-seminar-2014-anoto (VIDEO in Swedish, November 24)

ViktorWestman at http://www.redeye.se has recently published a very extensive high quality Anoto analysis:

http://www.redeye.se/analys/today/anoto-smartmatics-war-chest-increases-usd-140-million

In the link attached above, press the big red button for the full english version. It is well worth a read.

CESI concludes with an an Anoto commercial, a few selected full press releases and a few additional links:

https://www.youtube.com/watch?v=M6-DLge5Hes (VIDEO)

Press releases:

Anoto completes rights issue and secures funding of SEK 61.3m (Nasdaq OMX)

2014-11-13 08:30
Lund, November 13, 2014 — The subscription period in Anoto’s rights issue is now over and the rights issue was subscribed to 90 per cent, equivalent to SEK 61.3m. In the rights issue, 245,000,000 new shares were issued at a subscription price of SEK 0.25 per share, equivalent to SEK 61.3m. Shares for approximately SEK 43.4m have been subscribed for with preferential rights. In addition, shares for approximately SEK 2.9m have been subscribed for without preferential rights. The remaining SEK 14.9m was subscribed for by the underwriters of the rights issue. In total shares corresponding to 90 per cent of the rights issue were subscribed for, corresponding to SEK 61.3m The rights issue has increased the number of shares of Anoto by 245,000,000 shares to 698,353,534 shares. The capital of Anoto has simultaneously increased by SEK 4,900,000 to SEK 13,967,071. Shareholders subscribing with preferential rights have received BTA1 (paid subscription shares). Investors subscribing without preferential rights will receive BTA2 (paid subscription shares). Notice of allotment of shares subscribed for without preferential right will be distributed shortly. “With the funding secured we can now fully focus on the opportunities that lay ahead of us. Our recent deal with T-Systems clearly shows the momentum of our organisation and we are confident to reach new heights in the year to come.” says Stein Revelsby, CEO of Anoto.

T-Systems enhances signature capture solutions for Telekom Shop mbH in Germany with Anoto Live Pen 2 (Nasdaq OMX)

2014-11-06 08:30
Successful, easy and cost-efficient solution migrates to Virtual Desktop environment Lund, Sweden – 6 November 2014: Anoto, the world leader in digital writing technology, today announced that T-Systems has signed a contract to migrate the Group’s 800 Telekom Shops to Anoto’s recently released Live™ Pen 2 and Anoto Live™ software solutions as part of a program to move to a Virtual Desktop environment. Anoto Live™ digital writing solutions are at the core of the mobile plan contract signing and archiving solution at all Telekom Shops in Germany. Paper processes are streamlined and critical data is securely managed, improving efficiency across the enterprise whilst enhancing the customer experience. Customers signing up for service are required to sign contracts that must be securely captured and archived, in addition to supplying the customer with a copy of the agreement. Millions of forms are processed each year. In operation since 2008, Telekom Shop utilizes 5,000 digital pens and Anoto Live™ software solutions to process approximately 6 million pages per annum, and flawlessly handle 14 signatures and 166 views per minute. With Anoto Live™, Telekom customer’s enrolment forms are completed and signatures captured with an Anoto digital pen in the shops which is then transmitted to their data centre. Customer data is processed quickly and efficiently, often taking just minutes from signature to archiving. This solution eliminates scanning and postage costs, guarantees data security and confidentiality, and ensures customer contracts are always correctly signed and dated. The bottom line is that the Anoto digital writing solution has allowed Telekom Shop to cut contract printing by 50%. As part of a program to further streamline the business, the existing virtual working environments at the Telekom Shops are being migrated using most recent Citrix technologies. In order to support this new environment the existing Live Pen 1 software and hardware will also be migrated in order to support the new platform and communications protocols within the Citrix environment. “We are very excited to continue using the successful digital pen technology in our Telekom Shops.” said Dr. Wolfgang Weniger, Vice President Retail Processes and Systems of Telekom Shop Vertriebsgesellschaft mbH “. In addition to the significant cost savings, our employees are able to spend more time with customers and less time processing forms, increasing customer satisfaction. Applying the newest Anoto technology in our operations underlines our frontrunner position with new and innovative products.” “Digital pen technology can make a real difference to the way retail handles data and documents,” said Stein Revelsby, CEO of Anoto. “A highly dynamic operation like Telekom Shops handles a vast amount of documents daily where it is essential to capture and store customer signatures correctly. Many retail and logistics operations have the same requirement. Telekom Shops is a fantastic example of a successful organization which has adopted our technology resulting in dramatic cost savings, increased data security and customer satisfaction. This project confirms our commitment to bring value to our customers with existing and new products and services.”

Anoto Announces Order from Geeks Network (Nasdaq OMX)

2014-10-17 14:09
Lund, Sweden – 17 October 2014. Anoto, a global leader in digital writing solutions, is pleased to announce that it has received an order for a minimum of 1000 Anoto Live™ digital pens and the accompanying Anoto Live™ software from Geeks Network (P) Ltd. The order will be delivered in full before June 30th, 2015. The first shipment has already been made. Based in Chennai (India), Geeks is a rapidly growing young company that focuses on providing “Last Mile Consumer Support” solutions to its customers in the Food & Beverage, Hospitality, Healthcare and Public Services segments. After experimenting with several digital data capture methods, Geeks selected the Anoto solution as they were convinced it was the “best fit” for their particular requirements – from the perspectives of technology, ease of use, and economics. By using Anoto’s technology, Geeks’ analysis services to their customers will dramatically improve with much faster response times. ”Digital pen solutions is a robust alternative for data capture in the field or when there is a need for paper copies of business-critical documents,” said Stein Revelsby, CEO of Anoto. “We are pleased to see that our business development efforts in India that was initiated last year is starting to show results.”­­­ For further information, please contact: Stein Revelsby, CEO Tel. +46 (0)733 45 12 05 Anoto Group AB (publ.) Box 4106 SE-227 22 Lund Tel.: +46 46 540 12 00 http://www.anoto.com

Miscellanuous links:


Updated December 16, 2014: 

The advancing innovations and trends of voting technology

http://e-lected.blogspot.se/2014/11/the-advancing-innovations-and-trends-of.html


Updated December 16, 2014: 

Digital Pen Review

http://digital-pen-review.toptenreviews.com/


Anoto Digital Pen for Panasonic ToughPad 4K – Focus (September 7, 2013, VIDEO)

https://www.youtube.com/watch?v=-EHI1UdNLKQ

http://www.redeye.se/analys/report/anoto-redrawing-map-0

https://www.avanza.se/placera/redaktionellt/2014/12/09/potential-i-pyttebolag.html (December 9, in Swedish)

http://www.redeye.se/aktiebloggen/anoto/decenniets-turnaround-0 (December 8, 2014, in Swedish)

http://www.redeye.se/aktiebloggen/anoto/decenniets-turnaround (January 12, 2014, In Swedish)

https://fortune.com/2014/12/08/is-apples-next-product-the-stylus-steve-jobs-said-nobody-wanted/

Anoto – A decent risk reward? Time will tell…

Good luck Anoto!

Best regards, CESI

The author, Cutting Edge Science Invest, is currently an Anoto share holder. Cutting Edge Science Invest can not guarantee, or take into  accountability, the content of truth and accuracy of the information in this article/post.Thus, Cutting Edge Science Invest requires that a possible reader gather complimentary information if any type of investment in the company described above is considered. Cutting Edge Science Invest provides personally biased information and at best also “general information and opinions”. The article/post does not contain professional investment advice. 

Introduction

Arc Aroma Pure develops a system, which has the potential to substantially improve efficiency of biogas production and reduce greenhouse gas emissions. Through the optimization of biogas production, more energy can be extracted from the organic material. However, let´s start to answer a few questions: What is biogas, how is it produced and why will greenhouse gas emissions be reduced using the Arc Aroma pure technology?

Biogas – Definition and climate benefits 

Biogas could be defined as “a mixture of methane and carbon dioxide produced by the bacterial decomposition of organic wastes and used as a fuel”. Biogas is a renewable fuel that is part of the natural cycle. Biogas consists mainly of 65 percent methane (CH4) and 35 percent carbon dioxide (CO2). Methane, CH4, is the high-energy main component of biogas. Methane is also a potent greenhouse gas with 20-25 times stronger greenhouse effect than carbon dioxide. The combustion of methane is carbon dioxide and water. The carbon dioxide released by the combustion of biogas is converted within nature’s own cycle

Biogas production

Most organic materials can be used for biogas production. A large percentage of these materials are in the agricultural sector in the form of manure from livestock and residues and waste from crop production

In a biogas plant this natural process is utilized. In this process, a material such as sewage sludge, manure, agricultural crops and food waste is placed or pumped into a digester, which is a completely airtight container. In some cases, pretreatment necessary for reception, pumping, mixing and degradation to function optimally.

The gas in the digestion chamber is normally saturated with water vapor. In addition to the biogas, a nutritious digestate is formed, which can be used as a fertilizing agent.

The anaerobic digestion process can be divided into three main stages; hydrolysis, fermentation and methane production.

In the first step, complex organic compounds are decomposed into smaller compounds such as sugar and amino acids by microorganisms and enzymes .

The second step is fermentation. During fermentation, a large a number of intermediate products are formed, including alcohols, fatty acids and hydrogen gas.

In the last step of the digestion process, methane gas is formed by an unique group of microorganisms.

Biogas applications

Biogas can replace fossil fuels and reduce CO2 emissions. Purified biogas can be used to power vehicles. The energy in the biogas can also be used for heating, either locally or through district heating networks. Another application is production of electricity, which may contribute to an increased proportion of green electricity into the grid. The fastest growing area of use is biofuel. Methane molecule can also be used as raw materials in manufacturing processes. Examples of products where methane may be included as raw materials include paints, plastics, furniture, feed and lubricating oils. (www.biogasportalen.se)

What makes Arc Aroma Pure a cleantech / greentech company?

Arc Aroma Pure develops a pretreatment facility that enables optimization of biogas production. In most biogas substrates, a major part of the nutrients are encapsulated (=hidden), which means that the digestion process is not optimally auto catalyzed. Thus, the digestion process will be slow. CEPT® acts directly at the cellular level and smashes structures which results in a faster fermentation process and a higher yield of released gas(es).

Furthermore, there is an unmet need from biogas manufacturers to use new substrates. A breakdown of the raw material at the cellular level opens the possibility of using new raw materials that have not previously been considered suitable for biogas production. In addition, there is further potential to use technology as a cool and energy efficient alternative to heat-based sanitation (cleaning of raw material for biogas production). The company’s main focus in the current situation is the efficiency of biogas production.

What is CEPT? CEPT is Closed Environment PEF Treatment. PEF is the abbreviation for Pulsed Electric Fields (PEF) or electroporation,  a technique that is routinely used, for example, in the introduction of new genetic materials into cells. The Arc Aroma Pure system is pre-installed in container modules to facilitate an easy connection to the customers´curent production lines (!).

Evaluation of the potential of CEPT®

In the fall of 2009, Arc Aroma Pure signed an agreement with a leading energy group on a jointly funded feasibility study. In 2010, the collaboration was extended and the Arc Aroma Pure technology was verified both in lab scale and process scale. The parties agreed that the technology can be used as a substitute for heat-based pasteurization. Laboratory experiments also showed that the technique can radically streamline the production.

During the fall of 2012, the parties completed the agreement with an appendix concerning a large-scale trial which is still active today. The major identified advantages were:

Energy efficient sanitation
More efficient digestion
A higher gas yield was observed.
The downtime of the process was also minimized
The investment as such was also minimized
The total process was optimized
The technology aided a continuous process (equals better utilization of capacity) utilization)
A desire to use new substrate was identified by (Pulp and paper industry)

arcaroma saving

About Arc Aroma Pure

Arc Aroma Pure AB was founded in 2008 after a long period of research and development for various applications based on electroporation. The management team consists of Pär Henriksson, CEO with extensive experience as an innovator and entrepreneur, Martin Hagbyhn former CEO Purac and Kockums and Anders Hättmark with extensive experience in business development and recruitment

The concept behind the CEPT is based on electroporation, a proven technology, used today in micro and molecular biology. It is a continuous process that act directly on cells and structures by short, pulsed electric field creates pores in the cell membrane and cell walls. This leads to the death of microorganisms and nutrients from different types of raw materials are released and become more readily available for digestion. The result is faster fermentation and a higher gas exchange.

Depending  on the substrate composition in the substrate, the Arc Aroma Pure CEPT® pre-treatment improves the methane production yield by 15–50 % (!). Additionally, the fermentation rate is increased allowing for the higher yield to be produced in shorter time than without a CEPT pre-treatment. This fact allows for the hold time in the reactor to be reduced allowing the plant to convert larger amounts of raw material to gas in the same timeframe. The target markets are biogas producers, technical consulting companies, wastewater treatment plants, universities and scientists plus a host of applications for other target markets. In 2014 there will be a global launch of the CEPT starting in the Nordics. 

Other identified and creative applications of Arc Aroma Pure clean technology – In ballast water treatment.

Ballast water treatment today is heavily discussed today, primarily due to that marine ecosystem are being mixed up. Alien marine species have been found in areas where they do not belong, which has led to disruptions including the fishing industries. This is a global concern. IMO classifies the above problem as fourth biggest threat of the oceans. This led to the convention “Control and Management of Ships’ Ballast Water Sediments” adopted in 2004. The Convention phases in purification methods (as required) with the start of the smaller boats in 2009. CEPT® treatment involves a biological treatment of pumpable products and therefore it can be used with great benefits as it is both energy efficient and also more environmentally friendly than alternative methods. This is due to that the purification occurs without heating of the water or addition of chemicals.

http://en.wikipedia.org/wiki/Ballast_water_discharge_and_the_environment

http://www.arcaromapure.se/?page_id=89

Other identified and creative applications of Arc Aroma Pure clean technology –  in Water and Food

In addition to the biogas application, the board believes that the CEPT® platform,will add value as an energy efficient alternative to biological treatment of liquid products. Heat is traditionally used in the purification / sanitizing processes, for example within water and liquid food. In this context, the process is called pasteurization. Pasteurization is a generic term for various techniques in which food is heated to a certain temperature for a certain time. This is performed with the aim to kill harmful bacteria and microorganisms. The CEPT® platform can perform this without heating, and this is called cold pasteurization. Cold pasteurization has great advantages over conventional pasteurization because the treated product is not affected in respect to either taste or texture. For example, CEPT® treated juice tastes just like freshly squeezed juice. Also protein-rich foods are interesting candidates for CEPT® treatment, as these can not be heat treated because proteins denature and solidify when exposed to heat. CEPT® technology ca also be applied in the purification of water. Contrary to heat based pasteurization, heat resistant effectively kill heat resistant microorganisms. Furthermore, cold pasteurization is significantly more energy efficient and cost effective in comparison to heat-based pasteurization. The supply of clean water is a growing problem in many parts of the world. The consequence is an increasing demand for environmentally friendly and cost effective water purification methodologies. Here, CEPT® could play a decisive role in the future as it is both environmentally friendly and cost effective. Why? The Arc Aroma pure technology is both energy efficient and avoids addition of chemicals. This is in contrast to the majority of water treatment options available on the market today.

Other identified and creative applications of Arc Aroma Pure clean technology – Optifreeze 

Arc Aroma Pure holds approximately 27 percent of the shares in another company, namely OptiFreeze AB. Pär Henriksson (CEO and director of Arc Aroma Pure) is the CEO of Optifreeze and Anders Hättmark is a Optifreeze director (and also a board member of Arc Aroma Pure).

OptiFreeze and the link to the Arc Aroma Pure technology could be summarized with the following points: Patent pending freeze technology that allows fruits and vegetables to retain their flavor and shape even after thawing. OptiFreeze AB apply the Arc Aroma Pure technique in its pre-treatment facilities and is thus dependent on the Arc Aroma Pure’s technology.

When fruits and vegetables are thawed after freezing, crystals grow so fast that the cell structure collapses. By controlling the fluid inside and outside the cells, the cell structures are safeguarded. The technique is based on the application of vacuum technology along with PEF treatment. The treatment enables cell survival, which in turn leads to that the food flavor, texture and quality will be maintained throughout the freezing and thawing process!

Arc Aroma Pure – The 2015 Vision

“In 2015 Arc Aroma Pure AB, will be a well known company in the region. CEPT® is a popular brand that stands for innovative and environmentally conscious relationship with customers and end users. “A pre-processing based on CEPT® platform will be the obvious choice for the efficiency of the biogas industry and Arc Aroma Pure will be a research-based and well-respected player in the global cleantech market. This will be achieved by the following Arc Aroma Pure activities: Development, manufacturing and marketing of a patented and ready to use CEPT®-line pretreatment of biogas industry substrates. In the following step, other applications and customer segments will be explored.”

Arc Aroma Pure’s CEO Per Henriksson very recently presented the company´s technology at “Gasdagarna” (October 22 to 23 in Båstad, Sweden). Gasdagarna was organized by the industry association Energy Gas Sweden. The event is aimed at companies and organizations in the field of energy gases, where biogas is an important part. The company also had a booth and presented the CEPT product. “The invitation was a result of the interest in the technology among biogas producers. Our presence in Gasdagarna will be an important step as we now entering a market, ” said Pär Henriksson, CEO, inventor and founder of Arc Aroma Pure.

 

Intellectual property, patent strategy and patent situation

Patent situation according to the low quality Arc Aroma Pure home page:

patent arc aroma pure

Arc Aroma Pure’s patent strategy is focusing on the generator construction design and its synchronization, and the treatment chamber to ensure a stable environment. The generator consists of several modules that are optically synchronized, these are constructed from available simple components. The treatment chamber is designed as a positive pump, which ensures a stable environment. This solution is scalable and can be customized as needed. Included in the patent is also a description of the method and a number of listed applications and substrates. Arc Aroma Pure intends to apply for additional patents in the event that the Board determines that the Company’s intellectual property protection can be further strengthened. A protected trademark (403,502) for CEPT® is also granted. The patents and the trademark is owned by Arc Aroma Pure.

However, recently it seems that a Isreal- ,Chinese-, European- and US- patent has been approved. 

https://www.avanza.se/placera/pressmeddelanden/2014/08/18/arcaroma-europeiska-patentverket-godkanner-patentansokan.html

http://www.sydsvenskan.se/ekonomi/lundabolag-far-europapatent/

https://www.avanza.se/placera/pressmeddelanden/2013/04/03/arcaroma-positivt-svar-fran-us-patent-and-trademark-office.html

https://www.avanza.se/placera/pressmeddelanden/2013/06/27/arcaroma-patent-beviljat-i-kina.html

https://www.avanza.se/placera/pressmeddelanden/2014/06/09/arcaroma-godkant-patent-och-bolaget-uppmarksammat-i-media.html

Per Henriksson, founder and president (translated and slightly edited by C.E.S.I!)

“I believe CEPT® will make biogas production more profitable and become independent from state aid and subsidies. The technique can also be used in decentralized production of smaller plants. It is my hope that previously unprofitable commodities can be used even without the need to invest in the costly generation II technology (gasification). In 2009 produced, approximately 1.4 TWh of biogas was produced in 229 facilities in Sweden. The industry has a relatively aggressive expansion plan, the “Vision 2020″, which states that Swedish biogas plants shall produce in total 20 TWh in 2020. To meet this goal, new substrates, which today are not profitable to use, must be successfully introduced. CEPT® smashes structures and releases nutrients. Therefore, we have high hopes that even some crops, algae, seaweed, and by-products from the forest industry can be used with the help of the CEPT® platform, which would represent a paradigm shift. In the leading biogas nation, Germany, a new biogas plant is started every eight hours. Sweden has a less honorable track record, but we have high hopes of being able to alter the development of biogas production, initially in Sweden and then internationally.”

http://www.arcaromapure.se/?page_id=33

A 2014 status report (the year´s key press releases translated, edited and summarized by C.E.S.I.)

  • February 11 ,2014: Arc Aroma Pure AB has signed an agreement on cooperation with Nordic Water Products AB (press release translated by C.E.S.I.)

Arc Aroma Pure and Nordic Water Products AB has for some months been performing pilot attempt at a wastewater treatment plant, where the two companies’ technologies are combined in order to see if we can achieve a heightened effect. The trials have been successful and full-scale test will therefore start in spring 2014 and last for about six months. The full-scale test is designed to verify the synergistic effects observed in the pilot tests. Currently, Arc Aroma Pure believes that the results may be published only after the full-scale test ended. If the results of the full-scale test is positive, the companies intend to enter an agreement which will state that Nordic Water Products AB will market and sell the combined technologies globally, through subsidiaries and distributors. Arc Aroma Pure’s CEPT® platform will then be included as a component in the combined technique.

Nordic Water Products AB develops and markets mechanical and engineering products and technologies for the treatment of water and wastewater to municipal and industrial customers worldwide. “We are very pleased that we have now reached the point where we can start full-scale tests. If the tests turn out well, we have a partner with a solid reputation in the global market. Nordic Water is an innovative company with several exciting products on the market. Working with a company such as Nordic Water, gives us credibility and access to a very extensive global marketing and distribution network, ” says Pär Henriksson, President of Arc Aroma Pure AB.

“Nordic Water sees great potential in the combined techniques with many applications in our segment wastewater. We are actively seeking new innovative Swedish technology and Arc Aroma Pure suits us well because the company represents innovation and curiosity,” says Göran Arnkil, Partner, Nordic Water Products AB.

https://www.avanza.se/placera/pressmeddelanden/2014/02/11/arcaroma-arc-aroma-pure-ab-publ-har-traffat-en-overenskommelse-om-samarbete-med-nordic-water-products-ab.html

  • April 15, 2014: Arc Aroma Pure AB has entered into an agreement for the evaluation and selling of CEPT® platform (press release translated by C.E.S.I.)

Arc Aroma Pure AB looks forward to working with BroGas, not least because the BroGas biogas plant is very well maintained and possesses great skills. Arc Aroma Pure will, in cooperation with BroGas, further develop the company CEPT® platform.

Meanwhile BroGas strive to increase the efficiency of biogas production. Together the companies will evaluate and analyze CEPT®-platform benefits of biogas production. It is also part of the agreement that BroGas will assist and participate in the visits and views for future customers and stakeholders. The plant will therefore be an important future demo site. In parallel, Arc Aroma Pure will own the right to use the built-in function for remote access to enable viewing of a facility in operation at the continued marketing. As compensation, BroGas has been offered a discounted price if the companies choose to implement a commercial business.

Normally, the Arc Aroma Pure pricing is based on a payback period of less than 36 months, which corresponds to the value generated by the pretreatment with CEPT® platform in terms of biogas production.

“I look forward to a good partnership and mutual benefit. BroGas feels like the right partner. I am confident that we will have a demonstration facility that attracts visitors, while BroGas simultaneously can streamline their biogas production and achieve better profitability. After conducting large-scale tests of a biogas plant in the southern part of Sweden, we have produced the first three industrial CEPT® platforms and it’s a big step forward for the company that we can now begin a collaboration with an additional reliable and professional partner”, says Pär Henriksson CEO Arc Aroma Pure AB.

Arc Aroma Pure AB has conducted large-scale tests of a biogas plant in southern Sweden and found that the platform will lead to tangible improvements in efficiency while the technology enables new substrates which can be used for biogas production. Furthermore, the tests suggest that, in the future, the CEPT® platform, may replace the expensive and energy-consuming heat-based sanitation. “We want to be at the frontier in terms of biogas production and we believe in the basic technology CEPT® platform is based upon. Therefore, we have high hopes that the installation will lead to a clear increase in biogas production, says Magnus Ahlsten, Chairman BroGas. The companies’ collaboration will start in April and commissioning of CEPT® platform is planned for 2014. The evaluation phase is expected to be completed in autumn 2014.

https://www.avanza.se/placera/pressmeddelanden/2014/04/15/arcaroma-arc-aroma-pure-ab-har-ingatt-avtal-om-utvardering-och-forsaljning-av-cept-plattform.html

  • May 13, 2014: Optifreeze in Swedish National Television: http://www.svt.se/nyheter/vetenskap/ny-frysmetod-for-gronsaker

(Optifreeze is utilizing the Arc Aroma Pure´s technology. Arc Aroma Pure holds approximately 30% of the shares in Optifreeze, see below for more information)

  • June 19, 2014: Industrial scale testing in collaboration with Swedish Biogas International AB (press release translated and summarized by C.E.S.I.)

Arc Aroma Pure AB and Swedish Biogas International AB has signed an agreement to conduct full-scale tests of the AAP’s CEPT® platform industrially at one of SBI’s biogas plants. These facilities are located in Lidköping, Örebro, Västerås and Jordberga. A first project meeting took place in week 25. The CEPT® platform will be evaluated in operation for about nine months. The agreement means that SBI is given the opportunity to take over CEPT® platform and paves the way for the installation of additional CEPT® platforms within the SBI Group. The board of Arc Aroma Pure estimates that revenues for the company in connection with the current cooperation with SBI can be generated beginning in Q4 2014.

With this agreement, the Arc Aroma Pure now reached the target to launch three pilot partnerships. The promotion will continue and be intensified.

“Arc Aroma Pure has achieved several important goals with the SBI agreement. Furthermore, the Arc Aroma Pure has now established another important reference facility and simultanously made agreements and begun deployment of all CEPT® platforms in the zero series. Commissioning of the three CEPT® platforms gives us several important reference objects where biogas producers and other interested parties can see and evaluate the platform in an industrial operation. The three reference sites provide further opportunities for Arc Aroma Pure to collect data that could be important to attach and highlight in the marketing. That is: Data that provide “proof” that our CEPT® leads to a significant increase in efficiency of biogas production”, says Pär Henriksson, President of Arc Aroma Pure AB .

https://www.avanza.se/placera/pressmeddelanden/2014/06/19/arcaroma-industriellt-fullskaliga-tester-i-samarbete-med-swedish-biogas-international-ab.html

  • August 14, Two CEPT® generators sold to OptiFreeze and cooperation agreements signed (press release translated and edited by C.E.S.I.)

OptiFreeze AB has ordered equipment from Arc Aroma Pure AB for a total value of 894 000 SEK. The order includes two CEPT® generators, a lab CEPT® and a mini-CEPT®. In addition, the parties have signed an agreement under which Arc Aroma Pure will provide consulting services and materials to the Optifreeze planned pilot plant.

The two ordered CEPT® generators, are simplified versions of the CEPT® generator used in the company’s pre-treatment container for biogas substrates. One of the generators is called lab-CEPT® and will be used in the laboratory for internal attempts at OptiFreeze. The second generator, entitled the mini-CEPT®, will be used in pilot experiments in food industrial environment.

The two generators will be delivered in the coming weeks. Arc Aroma Pure CEPT® generator is modular and can be delivered in different configurations, with capacities ranging from a few kW to several MW pulse power, which is adapted to customer needs. The Arc Aroma biogas or water treatment platform includes two powerful CEPT® generators. The CEPT® platform can be used in a wide variety of areas, some examples of interesting applications are pasteurization and increased extraction of juice or olive oil (C.E.S.I. prediction: juice= next press release!?)

In addition to the order of two CEPT® generators, the companies have entered into an operating agreement that will further build value on the earlier collaboration. The agreement means that OptiFreeze purchases consulting hours and materials of Arc Aroma Pure AB needed for the the construction of the pilot plant in Eslöv.

“Historically, the companies have had an extensive collaboration. The newly signed contracts concretize that collaboration. We consider OptiFreeze as an important customer, not least because of its potential, but also as an important partner and as an investment. Arc Aroma Pure is actively working on several fronts where biogas optimization is the main focus. We have very high hopes that our CEPT® technology will be well received in both biogas and water treatment area, but we also have prospective partners and customers in other application areas that we should explore and develop in the near future. The company faces a breakthrough“, says Pär Henriksson, President of Arc Aroma Pure AB.

https://www.avanza.se/placera/pressmeddelanden/2014/08/14/arcaroma-tva-cept-generatorer-salda-till-optifreeze-samt-samarbetsavtal-tecknat.html

  • September 5, 2014, Arc Aroma Pure has sold CEPT® equipment to Klippan Municipality (press release translated and edited by C.E.S.I.)

Arc Aroma Pure AB has sold CEPT® equipment to Klippan Municipality. The equipment is part of a pilot project run in conjunction with the municipality and Nordic Water AB. The purchase price amounts to 7 million, AAP co-finances the project with about 3 MILLION.

Arc Aroma Pure AB has reached an important milestone with the sale of CEPT® equipment to Klippan Municipality. The equipment included in the pilot project previously announced, the purchase price amounts to SEK 7 million. As a project participant is co-financing the project with AAP about 3 MILLION. Other partners and funders in the pilot is Nordic Water AB and Klippan Municipality. The Swedish Energy Agency is supporting the project.

“The purchase agreement is an important milestone in Arc Aroma Pure’s history and at the same time a great recognition of our technology. The project is located on the boundary between water treatment and biogas production, which is a huge market where our CEPT® technology has very good prospects. The wastewater treatment plants provides large amounts of sludge. This means great opportunities for our technology CEPT®, due to the fact that CEPT® processing has increased the capacity of the treatment plants and reduces the amount of residual sludge. Likewise, the amount of biogas produced will increase both in terms of yield and total amount“, said PO Rosenqvist, Chairman and Marketing Director at Arc Aroma Pure AB.

https://www.avanza.se/placera/pressmeddelanden/2014/09/05/arcaroma-arc-aroma-pure-har-salt-cept-utrustning-till-klippans-kommun.html

 

  • September 15, Arc Aroma Pure and Malmberg Water AB has signed an agreement (press release translated and edited by C.E.S.I.)

Arc Aroma Pure AB (AAP) and Malmberg Water AB (MWAB) have signed a cooperation agreement which states that MWAB will market and sell BioCEPT® biogas operators in a number of markets around the world. The agreement has a sales value of 50 million per year and the volume is expected to increase over time.

MWAB start their marketing efforts directly with the activities supported by the AAP in Sweden and abroad. MWAB currently has conducted nearly 100 plants for biogas upgrade in Europe and China. Biocept ™ is a natural supplement for MWABs catalog and marketing plan. The agreement also includes aftermarket and product development.

“Malmberg Water is an impressive partner who has shown tremendous growth in the segment of biogas. I am confident that this agreement will make a clear imprint in our sales figures. We now have the opportunity to partner with a company that has a long history and driven by a strong environmental commitment, combined with strong capabilities in several interesting segments. MWAB have shown a great deal of knowledge, insight, and not least, a great deal of enthusiasm about the opportunity to market our Biocept ™, “said PO Rosenqvist, Chairman and Marketing Director at Arc Aroma Pure AB.

“Now we can offer another innovative process solutions in water treatment and biogas, and it will be a great value to both our existing and future customers. Marketing of Biocept ™ is focused towards key customers and the signals we receive are positive. We are confident that CEPT® technology can contribute to a substantial optimization of biogas production and will be an important element in the construction of the energy neutral wastewater treatment plant”, says Per Johansson, Business Area Manager at Malmberg Water AB.

https://www.avanza.se/placera/pressmeddelanden/2014/09/15/arcaroma-arc-aroma-pure-och-malmberg-water-ab-har-tecknat-avtal-skall-marknadsfora-biocept-pa-den-globala-biogasmarknaden.html

  • October 23, Increased efficiency of olive oil production in Spain (press release translated and edited by C.E.S.I.)

Arc Aroma Pure AB (AAP) has teamed up with one of the world’s largest and most modern plants for the production of olive oil. A pilot based on CEPT® platform will be set up in the production plant in southern Spain. The agreement is a result of the experiments conducted in the laboratory, site visits and discussions held for over a year. Our Spanish distributor, Tasnord SL, has played a crucial part in the discussions and will be involved in the installation and the process in general.

Arc Aroma Pure AB, Tasnord SL and the Spanish producer has signed an agreement to install a pilot plant in the producer’s state of the art manufacturing plant for olive oil, a plant which is also one of the largest in the world. The parties have agreed on the establishment and initial attempts at AAPS laboratory has been implemented.

CEPT® platform has the potential to increase the amount of oil that can be extracted from the olives, CEPT® technology adds no heat, why olive oil volatile flavors are preserved and the quality is very high. AAPS and our partners hope that the method will increase the quality of the oil in general, but also that the method will increase the output share of the, higher market valued, extra virgin olive oil . Furthermore, it is likely that the CEPT® based process has the potential to accelerate the rate of production and that the technology is more cost effective than current production technology. The project is particularly interesting since the current production plant has a very high reputation and is considered as one of the industrys´best, resulting in many visits from industry colleagues.

“This agreement is a natural step forward for Arc Aroma Pure. Now, we have mainly finished our product for the biogas market. Now, Arc Aroma Pure is proceeding according to plan and explores a whole new market segment, the extraction of olive oil. The CEPT® platform is the same, but the application and the market segment is brand new. If the pilot is successful, we have an important reference that will interest the rapidly growing olive oil industry and also a possible future customer, due to the fact that there are a number of production lines in the plant that can be upgraded. I would like to thank the representatives of Tasnord SL and employees for the focused work that enabled this agreement.” Says Pär Henriksson, President of Arc Aroma Pure AB.

https://www.avanza.se/placera/pressmeddelanden/2014/10/23/arcaroma-effektivisering-av-olivoljeproduktion-i-spanien.html

  • October 24, Arc Aroma Pure announces rights issue, approximately 17.3 MSEK (press release translated and edited by C.E.S.I.)

Arc Aroma Pure will make a rights issue of approximately SEK 17.3 million and has received subscription commitments and letters of intent of approximately SEK 10.6 million, representing approximately 61 percent of the issue amount. It appears from a statement. Arc Aroma Pure’s current working capital is sufficient for the current needs over the next twelve months, but a capital contribution makes it possible to further increase sales and marketing efforts and simultaneously explore new application areas and market segments. The subscription price is 25:50 per B share. Each share carries one warrant, and 11 warrants entitle the holder to subscribe for one new share.

https://www.avanza.se/placera/telegram/2014/10/24/arc-aroma-pure-foretradesemission-ca-173-mln-kr.html

Arc Aroma Pure AB (publ.) is very active in the market and in different projects. We have chosen to release this memo to live up to our promise to be transparent and to keep our shareholders informed.

bioCEPT® deployed in Jordberga

Company bioCEPT® is now installed and commissioned at the biogas plant in Jordberga outside Trelleborg. The preliminary results are very promising and as expected. Our bioCEPT® in Jordberga will be an important demonstration facility now when we begin to receive both Swedish and foreign delegations, who expressed their interest to see the CEPT® plant in operation. The biogas plant in Jordberga is the largest and most modern plant for the production of biogas in Sweden.

bioCEPT® registered trademark

Now, the Patent Office has announced that bioCEPT® is a registered trademark. The registration is an important step in the company’s market strategy.

Marketing activities

Arc Aroma Pure representatives have visited prospective customers and partners in different market segments and in several countries. This includes visits to China, Thailand, India, Spain and the United States. We note that the hospitality is always very positive and that interest is also very large.

Successful tests in the olive oil project

Recently, the company installed a CEPT® generator, treatment chamber included, in one of the world’s leading facilities for oil production in southern Spain. The plant is probably the largest in the world and receives many visitors. The aim was to try CEPT® platform during full-scale production and to study how the technology can streamline the olive oil production.

Both the management of the facility and isiting experts were initially skeptical, but after a few hours of operation, it was obvious to everyone that the technology works. Thus, we have verified that the effect demonstrated in the laboratory is scalable. Oil quality improved significantly and the amount of high-quality olive oil that can be extracted increases by more than 10% after a CEPT® treatment. We now have a good basis for further discussions with olive oil producers and actors in the industry, discussions operated jointly with our partners TasNord.

Cooperation with AZTI Tecnalia

Arc Aroma Pure AB, while visiting Bilbao, laid the foundation for a collaboration with AZTI Tecnalia, Spain’s leading research institutes in “marinating and food”, “in the context of Sustainable”. We will cooperate with the objective of developing equipment and methods based on CEPT® technology and to help prospective customers with evaluation and decision-making.

Media attention

Pär Henriksson has been interviewed by a journalist from Helsingborgs Dagblad and Sydsvenska Dagbladet common industry editorial, 8till5 and a photographer has visited our company. On January 24  a major six slide article was published, where Arc Aroma Pure AB was highlighted with text and images. The text began with the words “The Lund Company Arc Aroma Pure was the Skåne company which had by far the strongest price performance last year. Shares traded on AktieTorget rose by 311 percent. ”

“In this memo, my colleagues and I tried to summarize some of what is happening in the company. As everyone knows, we can not tell you everything, which would violate various rules and ethics. I can summarize that the tempo is high and that we work focused. We are in the middle of the process to move from research and development to marketing and production. A process if not entirely easy, but we are going. ” Says Pär Henriksson, MD, inventor and founder of Arc Aroma Pure.


C.E.S.I. predicts that also another new application, extraction of Juice, might be announced in a near future press release (see the AAP´s hint in the previous Aug 14 2014, press release)

Note: Most of the information depicted above was obtained from http://www.arcaromapure.se

Best regards, C.E.S.I.

The author, Cutting Edge Science Invest, is an Arc Aroma Pure share holder. Cutting Edge Science Invest can not guarantee, or take into  accountability, the content of truth and accuracy of the information in this article/post.Thus, Cutting Edge Science Invest requires that a possible reader gather complimentary information if any type of investment in the company described above is considered. Cutting Edge Science Invest provides personally biased information and at best also “general information and opinions”. The article/post does not contain professional investment advice. 

The scientific key to the expected near future Nexam Chemical commercial success has not yet been highlighted by analysts. Tentatively, due to a lack of scientific understanding. C.E.S.I. hopes this chemical analysis of the Nexam linker central scaffold also will enlight “non-chemist”. But first, a few quotes and some financial aspects from the recent Nexam interim report (Q2, 2014):

http://www.nexamchemical.com/Documents/Interim%20Reports/Nexam_ENG_Q2_2014_20140821_OK.pdf

Nexam Chemical 

“Nexam Chemical develops technology and products that make it possible to significantly improve the properties and performance of most types of plastics in a cost-effective manner and with the same production technology intact. The properties that are improved include temperature resistance and service life. The property improvements that can be achieved by using Nexam Chemical’s technology make it possible to replace metals and other heavier and more expensive materials with plastics in a number of different applications. The company was founded in July 2009 after a management buy-out of a crosslinker project from the Perstorp Group. By then, Perstorp had put a number of years into the development of the project, but decided to divest its involvement in the field to instead focus on aldehyde-based chemistry. Nexam Chemical currently has fifteen employees in Sweden and eight in Scotland. The Company’s head office and R&D are in Lund, Sweden, but its production takes place in St. Andrews, Scotland”

Ongoing partnerships and customer projects

“Since Nexam Chemical’s technology was introduced in 2009, a number of development projects and partnerships have been entered into with a range of leading parties, of which several are world leaders in their respective niches. They include BASF, Repsol, IRPC, Sumitomo, ABB, NASA and Rolls-Royce. Nexam Chemical currently works with over 20 of the world’s 100 largest chemicals and materials companies.”

Vision and mission

Nexam Chemical’s vision is to be a recognised world leader in the field of property modification of plastic and polymer materials via heat-activated crosslinking.

The scientific key.

But before C.E.S.I. continues, let´s halt and highlight a few statements depicted in this article:

The author “BSV” quotes (slightly edited and translated by C.E.S.I.)

The article ends with a milestone quote fr Nexam CEO Per Morin quote from a Redeye (video) presentation.

“For us this is almost as Losec, we will be protected for 20 years and we can dictate who will get to do it and on what terms …”

  • C.E.S.I. does not believe that Nexam is developing a ground braking product, because…
  • C.E.S.I. is 100% convinced that Nexam is developing an array of ground breaking products.
  • C.E.S.I. also claims that the CEO´s quote “For us this is almost as Losec” is an understatement in respect to scientific quality.

Why? Here is why:

Losec, i. e. Omeprazole, is a selective and irreversible proton pump inhibitor. It suppresses stomach acid secretion by specific inhibition of the H +/K + ATPase system. Because this enzyme system is regarded as the acid (proton, or H+) pump within the gastric mucosa, omeprazole will inhibit the final step of acid production. http://en.wikipedia.org/wiki/Omeprazole.  However, the beauty is in the fine details of the chemistry! The drug Omeprazole is activated by stomach acid (by protonation of the pyridine moiety, which triggers the remaining desired cascade of events). Thus, Omeprazole should be defined as a target seeking missile.

Likewise, the beauty of the Nexam cross linker is also in the fine details of the chemistry! Cross linker molecule number 1 covalently binds both the polymer and the cross linker-polymer conjugates of the cross linker molecules number 2 and number 3. Thus, the Nexam cross linker molecules are double target seeking missiles! Thus, C.E.S.I. claims that the CEO statement “For us this is almost as Losec” is an understatement in respect to scientific quality. Both the description, the chemistry, the impact and the hidden simplicity is hard to grasp, especially for a non-chemist..

Therefore, the scientific key will also be explained in one single picture, which was also appreciated the small children of C.E.S.I. In fact, this synthetic scheme was C.E.S.I.s´ contribution to the family´s joint art weekend session…

PLEASE CLICK PICTURE TO ENLARGE

Nexam PNG

C.E.S.I. was only 99% confident that the combination of the Nexam polymers was a genius application of the historical 1866 Berthelot reaction. This key question had to be addressed, so C.E.S.I. submitted this question and this exact picture included…, to the Nexam CEO Per Morin and Daniel Röme, PhD and NEXAM Director of Business Development & Innovation. The content was much appreciated, confirmed and approved. Logically, Per and Daniel recommended C.E.S.I. to add another 4 words to the title: “A first and simplified crash course on Nexam Chemical Crosslinking perspective”.

Likewise, Per and Daniel also stressed that this simplification dedicated to non-chemists was appealing (Sept 25, 2014). They recommended C.E.S.I. not to edit the early draft picture “too much” (most likely, they also wished you, the reader of the manuscripts´ final version , a few moments of laughter.

However, C.E.S.I. came to the conclusion that a non-chemist still would not grasp the scientific beauty of the Nexam technology. This conclusion resulted in a few additional graphic views to illustrate the Nexam technology:

CLICK PICTURE TO ENLARGE!

 Benzene Diamond Graphene Introduction FINAL3

CLICK PICTURE TO ENLARGE!

Sunday FINAL Berthelot

CLICK PICTURE TO ENLARGE!

CYCLOTRIpng240SUN final

Key scientific messages in these graphic slides:

  • Nexam´s cross linker design is a genius application of the “forgotten” Berthelot reaction
  • The Berthelot reaction – as such – has been ignored (and been forgotten about!) by scientific communities, presumably due to the inherent issues in other non cross-linker applications (i. e. “normal” synthetic chemistry).
  • The core of the Nexam cross linker technology end-products is a Benzene derivative. Benzene derivatives are very stable. This derivative should be a perfect central hub (=knot) in most multidimensional polymer frameworks! Nexam technology is not solely genius – It is unique!

Nexam competitors?

C.E.S.I fails to find Nexam competitors. Most likely, there is competition in this specific cross linker technology, but C.E.S.I. can not find any relevant “Nexam threats”. The most interesting finding is this article:

http://www.ptonline.com/articles/radiation-crosslinking-boosts-nylon-properties

“TechnoCompound offers nylon 6 compounds that can be crosslinked with standard electron-beam technology, including conveyor batch processing, in-line wire/cable processing, and film/sheet processing. Companies can utilize existing electron-beam processing equipment to replace higher-cost thermoplastics with high-performing and more economical crosslinkable nylon (see Table 1). TechnoCompound’s compounds have been targeted for electrical connectors, with a strong focus on automotive applications where higher temperature performance is required.”

And the article summarizes:

“OTHER ACTIVITIES IN CROSSLINKED NYLON

Most of the development activity and commercial use of crosslinked nylons has taken place in Europe and Asia. Sumitomo Chemicals was among the first companies that pursued crosslinked nylons. By 2005, the company had developed new radiation-crosslinking nylon 66 molding compounds, which were adapted commercially for heat-resistant electrical connectors.

In late 2011, BASF (U.S. office in Florham Park, N.J.) and Sweden’s Nexam Chemical, a supplier of heat-activated crosslinkers for polymers, forged an exclusive cooperation agreement to develop and commercialize crosslinkable nylon 66 for automotive and electrical/electronic applications as initial targets.

Foster Corp., Dayville, Conn., developed its Fostalink crosslinkable elastomeric nylon compounds for medical applications such as catheters and valving, and nonmedical applications such as heat-shrink valving.”

C.E.S.I. : Examples of TechnoCompound´s crosslinker technology and specific cross linkers:

“Nylons 6, 66, and 11 can be radiation crosslinked, but the first two require addition of a crosslinking agent. For example, the polyfunctional monomer triallyl isocyanurate or triallyl-cyanurate can be compounded into nylon pellets. The crosslinkable pellets can then be molded, extruded, or otherwise formed into the final product”

A google triallyl isocyanate price search, makes C.E.S.I. feel like the scientist Mr Walt in the cutting edge quality TV series “Breaking Bad”:

http://www.alibaba.com/showroom/triallyl-cyanurate.html

Despite the low cost of “triallyl isocyanate” (1-2 US$ / Kilogram), this cross linker is based on “electron beam technology”, which to C.E.S.I seems inferior to standard heat activation of cross linkers (Nexam-BASF. Nexam-Armacell, Nexam-X, Nexam-Y etc. etc.)

http://en.wikipedia.org/wiki/Electron_beam_processing

Very interestingly, the Nexam CEO Per Morin touch upon this subject in an Introduce.se Nexam Video interview (June 10th, 2014). His conclusions are in accordance with the C.E.S.I. conclusions: “Electron Beem technology has been around for 50 years, it´s simply too expensive”

http://www.introduce.se/foretag/nexam/intervjuer/2014/6/nexam—intervju-med-vd-per-palmqvist-morin-och-forskningschef-dane-momcilovic/

And the competition from the giants within Process Polymer industry? Well, it seems that theese “key industry leaders” are aligning themseves to the core Nexam technology…

Nexam – Scalability issues?

Daniel Röme, PhD and NEXAM Director of Business Development & Innovation and Per Morin Nexam CEO:

Translated and slightly edited by C.E.S.I (!):

“I judge the risk of being unable to scale up production as relatively small,” says Daniel Rome. Instead, he assesses the risk of postponed projects as higher. This has happened before for Nexam. When plastic manufacturers are in reorganizations or depressed market conditions, they prioritize ongoing projects and existing customers in front of the development projects in where Nexam are involved. Nexam believes it can provide more information about pet foam-scaling during September or at the next quarterly report, and CEO Per Morin estimates that Nexam could ultimately turnaround around 50 million a year on the pet foam project with this specific client. Generally, Nexam Chemical aims towards gross margins around 40-50 per cent, he says, but declines due to many uncertain parameters to provide any more long-term sales forecast. According to the Nexam CEO, Per Morin: Today, we can not see a need for a rights issue to scale up production with connected associated working capital requirements, “No, instead we’ll solve the working capital requirements by negotiating with our customers and suppliers”

Original swedish version in link below (please use google translate):

http://www.privataaffarer.se/direkt-nv/nexam-upprepar-prognos-om-breakeven-2h-2014-vd-545809
C.E.S.I. conclusion: Nexam is Nexam´s worst enemy, or?

The molecules, i. e. the products, in the Nexam pipeline are extremely easy to synthesise for most chemists ( a person skilled in the art of constructing new molecules). One might argue that Nexam can produce the linkers in the most cost efficient way and this might be true today, but potentially not in the future or even near future. C.E.S.I. predicts that it would take an experienced Synthetic Chemist (e. g. C.E.S.I.) approximately 5-15 days to synthesize (= to construct) one or a few grams of cross linker material. C.E.S.I. has + 13 years of experience in small scale small molecule synthesis. C.E.S.I. can not understand that a high quality process company with a vibrant creative environment should, per default, fail to copy the Nexam cross-linkers with roughly the same production cost (or even at lower production). Therefore, securing the intellectual Property (IP) must at all times be on top of Nexam´s highest priority agenda. From the massive IP press release news flow from Nexam, C.E.S.I. concludes that the Nexam CEO and the Nexam board has understood this key issue. Thus, C.E.S.I. is thrilled of excitement. Now, it seems that analysts and the market “demand” a big order from a key industry process company. Today, C.E.S.I. does not share the analyst’s and the market´s demand. C.E.S.I. would like to see even a few more “new patent press releases” prior to the announcement of the first big order. However, the recent small order announcement is a key milestone (see below). This order is a another “proof of concept” i. e. it is a solid proof that the nexam technology is not solely of academic interest… C.E.S.I. predicts that Nexam will be a key player in the next industry revolution (New superior bulk- and advanced materials).

http://www.nexamchemical.com/en/Investors/Press-releases/Pressmeddelande/?releaseid=1701030

http://www.nexamchemical.com/en/Investors/

The world of plastics and polymers is wide and complex. There are tons of materials out there and only some of them can and have been optimized for use in 3D printing. So, if you were a company that produced some of the most advanced polymeric mixes out there, what would you do? You would probably do what Sweden based Nexam Chemicals just did for its PEPA Crosslinker: develop a process for using it for 3D printing with thermoplastics.

Nexam is known for developing technology and products that improve the properties of polymeric materials using conventional processing equipment (i.e. extruders). Its technology is used for cross linking polymers (which in principle can consist of an unlimited number of monomers) and oligomers (which consist of only a few monomers) to create new cross linked polymers with superior properties.

Controlled crosslinking can give the original polyamide enhanced properties in terms of chemical resistance and thermal/dimensional stability, make it stronger during use and make it more recyclable. It can also improve throughput and enable new processes.

According to the latest Chinese patent filed in China by the Institute of Chemistry at the Chinese Academy of Sciences, that is what the Crosslinker PEPA material (aka Neximid 100) will do, by enabling new methods and new capabilities for 3D printing of polyamide thermoplastics, giving nylon properties that in certain circumstances may allow it to be used to replace metal components.

http://3dprintingindustry.com/2014/09/26/nexam-chemical-gets-3d-printing-crosslinker-pepa/

And the current Nexam portfolio? There is still room for improvements.

CLICK PICTURE TO ENLARGE!

Nexam produktportfölj by CESI

Nexam – Better plastics, Final conclusions by C.E.S.I.

  • Increased processability equalls…
  • New polymers in new processes in new products
  • Increased thermo stability (heat stability)
  • Increased chemical stability
  • Increased mechanical stability
  • Increased UV
  • Increased “total plastic properties” to a reduced price
  • Nexam´s customers can direct use the Nexam products, without associated major hardware refurbishment costs
  • Last 6 months: The Nexam technology has been introduced for new world leading companies.
  • Increased level of activity in the company
  • Solely, the Armacell and BASF project can respectively result in a turnaround of 10 mSEK year 1 and 50 mSEK year 2 – with a net marin of 40% (!)
  • Nexam predicts that news regarding more new applications soon will be announced (electronics, Asian energy sector, european plastic recycling projects),
  • In the future: Nexam predicts additional new nylon applications
  • In the future: Nexam predicts ”some concepts involving polyolefins”
  • A new product is under evaluation in china

The Nexam case is – without competition – C.E.S.I.s´ all time favorite company and investment call!

A prediction of the near future share price is slightly silly and surprisingly difficult.

A prediction of the 2019 year share price is also slightly silly, and also impossible.

C.E.S.I. is biassed and extremely positive.

Why?

Nexam End 1

…and…

End 3

C.E.S.I. has granted the approval to share these official Nexam slides (Per Morin). Original material is available at http://www.nexamchemicals.com (presentation section)

Interim Financial Statements for Quarter 3, July–September 2014

Entering into a new phase with high speed

Several new projects have been initiated during the quarter, mainly with European customers, and Nexam Chemical has delivered products to several of them. Our partnership with Armacell is progressing, albeit with some delays. We are also poised to begin a project funded by Eurostar that we will be working on together with Armacell and The European Van Company. The aim of the project is to upgrade recycled PET for use in PET foam and other applications. We were informed in the summer that this project will receive funding from Eurostar. In addition, many other entities in Europe are testing Nexam Chemical’s formulations mainly for upgrading recycled PET resin for various applications. Nexam Chemical entered into a cooperation agreement with its polyethylene partner IRPC over the summer for development and commercialization of modified polyolefins. IRPC has informed us that they now have passed the development phase, with respect to a polyethylene quality for pipes, and will begin testing the quality for approval together with their end client in the autumn/winter. This will be an interesting and potentially large application area for our company. Nexam Chemical held a technical launch of its new high-temperature resin, NEXIMID® MHT-R, in the beginning of October and we have already received several inquiries from around the world. In addition to the project with Rolls Royce and Swerea SiComp, we are expecting several companies to initiate projects with the new resin in the coming years. The in-depth section of this report features a fairly new area for Nexam Chemical: liquid crystalline polymers, or LCP plastics as they are often referred to. This material is rapidly gaining ground, especially in the electronics industry, where Nexam Chemical has already established itself as a supplier of products for property improvement.

Best regards, C.E.S.I.

The author, Cutting Edge Science Invest, is a Nexam Chemical share holder. Cutting Edge Science Invest can not guarantee, or take into  accountability, the content of truth and accuracy of the information in this article/post.Thus, Cutting Edge Science Invest requires that a possible reader gather complimentary information if any type of investment in the company described above is considered.

Cutting Edge Science Invest provides personally biased information and at best also “general information and opinions”.

The article/post does not contain professional investment advice. 

 

CybAero AB develops, manufactures and markets autonomous unmanned helicopters (VTOL UAVs) with associated sensor systems for use in both civil and military applications. CybAero was founded in 2003, but the foundations of its business were laid in 1992 through a research collaboration between Linköping University and the Swedish Defense Research Agency (FOI). With APID trademark, CybAero is now established as a global VTOL UAV leader. The Company’s APID product attracts much attention globally for being user-friendly, robust and price-efficient. CybAero’s head office is in the Mjärdevi Science Park in Linköping, Sweden. The company has just over 40 employees and is listed on the NASDAQ OMX First North.

Please press link below for the in-depth clip from Chinese tv channel CCTV7 (featuring the swedish UAV developer and manufacturer CybAero).

Very recently, this clip was also published on youtube (Sep 7, 2014)!

http://www.youtube.com/watch?v=CmqtS7jNF1M&feature=youtu.be

Attached is also the link to CybAero’s video from the September 8 press release, the demo flights  on location for its major Chinese customer AVIC, which signed a framework agreement with CybAero this summer with an order value of SEK 700-800 million. The demo flights were performed in July and August in China and presented the aircraft’s ability to inspect power lines and track moving objects.

http://youtu.be/CmqtS7jNF1M

Note: Cybaero Market cap ~500 million SEK

Some investors might argue the Cybareo market cap is high:

The company reported a loss after tax of SEK 10.5 million (SEK 25.4 million, full-year 2013). The loss can be explained by the fact that CybAero continues to be in an intensive development phase to transition the company into an industrial powerhouse with the ability to handle large-scale development and production operations. In addition to one-time costs, recurring personnel costs have increased as a result of new recruitment, mainly in the development, aviation, and production departments. http://www.cybaero.se/en/2-uncategorised/112-semi-annual-report-january-june-2014-cybaero-ab-publ

Cutting Edge Science Invest believes it is low. Why?

This Chinese AVIC order is the first big order and most likely, it´s not the last. In addition, earnings from this order will be obtained over a 7-8 years period (starting 2015).

Examples of commercial, defence and civil authoritie drone applications:

  • Border and coastal monitoring
  • Traffic monitoring
  • Mapping of forest fires
  • Mapping of landfill sites
  • Search and rescue operations
  • Border patrols
  • Mine detection
  • Jamming
  • Reconnaissance
  • Protection of convoys and consignments
  • Perimeter protection for military bases
  • Mapping
  • Power line inspections
  • Monitoring of forest areas
  • Inspection of landfill sites and gravel pits
  • Topographical surveys
  • TV and film recordings
  • Transport

A comment on the transport application: Compare the google Project Wing drone project (link to video clip): http://www.telegraph.co.uk/technology/google/11062925/Google-tests-drone-delivery-service-in-Australian-outback.html)

CybAero is at the leading edge of developments to create an unmanned futurehttp://www.cybaero.se/en/

CybAero develops and manufactures unmanned helicopters known as UAVs (Unmanned Aerial Vehicles) for an international market. The helicopters are adapted to the unique requirements of each individual client, and cost effectively and safely reduce the risks to people in hazardous environments.Over the past decade, UAVs have seen the most dynamic growth of any sector in the aviation industry, and this strong growth is forecast to continue until 2020. Most UAVs are currently fixed-wing UAVs, over which unmanned helicopters have many advantages. For example, they don’t need long runways, which most ships don’t have, and they can capture images better when hovering sice they operate at lower altitudes. The APID 60 is an innovative product developed by CybAero’s world-class aircraft engineers and has been tried and tested by our clients in hostile environments the world over.

Attached is the full version of Cybaeros “all time best” key press release:

Swedish CybAero lands order for unmanned helicopters worth SEK 700-800 million to China

First North-listed CybAero, which develops and sells unmanned helicopters, has received an order guarantee worth SEK 700-800 million through an eight-year framework agreement. The order has been placed by a company in the Chinese AVIC group, one of the world’s largest companies which develops and manufactures aircraft and various types of flying vehicles and has over 400,000 employees. The order is dependent on an export permit being issued by the Swedish Agency for Non-Proliferation and Export Controls (ISP).

The order is linked to a framework agreement, through which AVIC has committed to purchasing at least 20 helicopter systems during the first three years and at least a further 50 systems during the following five years. This gives a total order value of SEK 700-800 million, depending on the final design of the systems. Each system includes helicopters, ground stations and data links. The agreement also covers training and support.

“This represents a breakthrough in the market for the civil application of unmanned helicopters. Our goal is to become the global market leader with at least 30 percent of the global market. Through this order, which is our biggest to date, we’ve taken a significant step towards achieving this goal,” says Mikael Hult, CybAero’s CEO.

To be used by customs, coastguard services and agriculture
CybAero will establish a joint company with AVIC in order to gain access to its volumes and production expertise. In the long-term, the company may carry out some production locally in China for the Asiatic market. CybAero expects to achieve economies of scale through the joint company, which among other things will result in the further streamlining of operations and the potential to operate closer to the local Asiatic market.

Through the joint company, AVIC will entirely target the civil and commercial markets, e.g. customs and coastguard services, the energy sector, agriculture, mapping and rescue services, etc.

“The order is the largest ever anywhere in the world in the product segment within which CybAero operates, i.e. vertical take-off and landing unmanned aerial vehicles weighing less than 200kg. This order will be worth nearly SEK 100 million a year if we can turn out the orders over the eight years covered by the agreement. This will provide a stable basis for our entire business for many years to come,”

Cutting Edge Science Invest (C.E.S.I.):  Not surprisingly, the share price exploded instantly after this press release (~51%, 31 to 47 SEK), quickly followed by a sharp decline (38 SEK). Since, the share price has dropped approximately 1.5 SEK per month in a very calm and steady weak negative trend. Today and prior to today´s closing call forechock, the share price was fluctuating between 32 SEK and 34 SEK,. Will there be another forechock tomorrow? I do not know. What I do know is that most likely, the press release announcing a granted export permit will cause an Earth quake. I predict a net 75 % increase of the share value within a few minutes.

C.E.S.I. is confident that the permit will be granted. Why? C.E.S.I. strongly believe this CEO´s statement:

“A condition of the order for AVIC is the granting of a permit by the Swedish Agency for Non-Proliferation and Export Controls, but we don’t anticipate there being any problem with this at present. We received an order from the Chinese customs authorities in January worth SEK 50 million, and we have been granted an export permit for this order, which is more complex and technologically advanced. The equipment for which we have now received an order is part of our standard system,” says CEO Mikael Hult.

“The agreement and order will not give rise to any further financing requirements for CybAero. Payments will be made by AVIC on an ongoing basis as deliveries take place.” CEO Mikael Hult

During summer, the company has upgraded the engine of its Apid 60 aircraft

http://www.cybaero.se/en/2-uncategorised/106-cybaero-announces-new-engine-supplier

The high quality provided by CybAero is verified by the recent airbus follow-on order

First North-listed CybAero has received another order for a sub-system from Airbus (formerly known as Cassidian, a subsidiary of EADS/Airbus). The order, worth EUR 150,000, represents a follow-on order to the orders that CybAero received in May and October 2013. The sub-system will be used in Airbus’ flying demonstrator, the TANAN 300 unmanned helicopter.

C.E.S.I. is also found of the demo flights press release:

http://www.cybaero.se/en/2-uncategorised/114-cybaero-has-performed-demo-flights

First North-listed CybAero, which develops and markets unmanned helicopters, has performed demo flights on location for its major Chinese customer AVIC, which signed a framework agreement with CybAero this summer with an order value of SEK 700-800 million. The demo flights were performed in July and August in China and presented the aircraft’s ability to inspect power lines and track moving objects.

“This is a milestone for us in the work we’ve put into the AVIC order, and yet another step in our growth and expansion,” says Mikael Hult, CEO of CybAero. The now-complete demo flights were performed at various times in July and August at two different locations outside Beijing. AVIC, one of the largest companies in the world and whose operations include developing and producing aircraft, invited numerous high-ranking individuals from government authorities, as well as from the energy sector and business community. CybAero had a demo team on-site, as well as representatives from its management and board of directors. The demo flights demonstrated features including the ability to inspect power lines and track moving objects. Video info was shown in real time from the aircraft’s camera and the system’s ground station was displayed on large monitors.

“The weather conditions were challenging, with 35-degree Celsius heat and strong winds. But the helicopter functioned just as it was supposed to, so we were able to show that it could fly in tough conditions,” says Mikael Hult. Hult is extremely pleased with these demo flights, which highlighted the aircraft’s functionality and maneuvering capabilities. “Being on-site allowed us to discuss our customer’s requirements in greater detail and AVIC has initiated talks and negotiations with potential customers,” says Mikael Hult.

Major attention from China
In early July, CybAero won a large framework agreement with AVIC, which has committed to purchase at least 20 helicopter systems in the first three years, followed by at least 50 systems in the next five years. This translates to an order value of SEK 700-800 million, depending on the final design of the systems. Work on the order has begun. CybAero received an end user certificate from AVIC on September 5 and has initiated the application process for an export license from ISP (the Swedish Agency for Non-Proliferation and Export Controls). AVIC plans to focus on the civilian and commercial markets, such as agriculture, coast guards, the energy sector, mining industry, forest products industry and fire & rescue services. News of the order made a huge splash both in Sweden and abroad, with national Chinese TV channel CCTV7 doing a 3-minute feature on CybAeros product APID 60 in late July (C.E.S.I. : see links above)

In the fall, CybAero will continue performing demo flights around the world. “Intensifying our on-location demo flights for our customers and showing them how our systems function in the environments in which they will later be operating is a crucial step for us,” says Mikael Hult.

In a very near future, Cutting Edge Science invest believes CybAero and Mikael Hult will exceed current market expectations.

More info (general):

http://blogs.imediaconnection.com/blog/2014/08/30/up-up-and-away-commercial-drone-market-ready-for-take-off/

http://www.greentechmedia.com/articles/read/flying-robots-for-the-smart-grid

http://marketingland.com/amazon-drone-delivery-ready-for-takeoff-but-are-we-ready-66869

http://voiceofsandiego.org/2014/05/06/the-drone-industrys-ready-to-take-off-required-reading/

 Best regards, C.E.S.I.

The author, Cutting Edge Science Invest, is a CybAero share holder. The author does not intend to sell any shares within a near future (= weeks)

Cutting Edge Science Invest can not guarantee, or take into  accountability, the content of truth and accuracy of the information in this article/post.Thus, Cutting Edge Science Invest requires that a possible reader gather complimentary information if any type of investment in the company described above is considered.

Cutting Edge Science Invest provides personally biased information and at best also “general information and opinions”.

The article/post does not contain professional investment advices. 

 

 

 

I appreciate and celebrate the eco-friendly Opcon Powerbox technology. Recently, numerous press releases and multiple small orders have been announced. http://www.opcon.se/web/Press_releases.aspx

The fact that major capitalization on the Opcon technology has been “delayed” for a number of years is what made me particularly interested in this case.

Opcons 2014 technology is the result of decades of research and developent http://opcon.se/web/History_1.aspx

The company is listed on the Small Cap list of Nasdaq OMX Stockholm. No dividend has been paid.

Today, there are 379 millions of shares. In the 2010 annual report, the number of shares was 25 millions,

This equals a total net dilution factor of: 15 (end 2010 until today´s date)

Early 2010, the value of the share was ~15 SEK,

Recent week´s share price ~0.55 SEK (first week of september 2014, the last 2 day´s excluded…)

Today, September 10th 2014, this sums up to a net loss of approximately 96 % for the 2010 year´s shareholder.

Market cap early 2010 (15 x 25 million) = ~375 million SEK

Market cap 2014, recent days = ~220 million SEK (2014-09-09)

My initial conclusion, solely based on numbers:  It is not too hard to understand that many of the 2010 (or 2011 or 2012) Opcon investors, i. e. ”the old timers”, possesses a very negative view and and lack of trust for Opcon and the Opcon board members.

I do not have the time or the energy to describe what went wrong. It has already been discussed in other forums (e. g. in www.redeye.se, swedish language) but yes, I am aware of the historical events e.g. Tricorona).

Instead, let´s zoom in on the key messages of the January to June 2014 interim report (http://opcon.se/web/Reports_3.aspx)

INTERIM REPORT JANUARY–JUNE 2014

China is the key as Opcon looks to the future

  • Efforts now initiated to develop the Chinese market and parts of South East Asia and create an industrialised manufacturing base for Opcon Powerbox together with Snowman
  • Hong Kong Snowman Technology Ltd. second largest owner of Opcon following directed placement of shares
  • Savings programme now being implemented that will cut annual costs by around SEK 30 million
  • Reduced loss despite lower sales, loss after tax of SEK –4.8 million (–15.1 m)
  • Underlying operating loss for Q2 of SEK –1.0 million (–7.4 m) before non-recurring costs

First half of 2014, January–June, remaining business

  • Net sales amounted to SEK 122.3 million (136.7 m)
  • Operating loss (EBIT) was SEK –10.5 million (–21.8 m)
  • Loss after tax of SEK –11.0 million (–29.3 m)
  • Earnings per share SEK –0.03 (–0.09)

Q2, April–June, remaining business

  • Net sales amounted to SEK 54.9 million (62.7 m)
  • Operating loss (EBIT) was SEK –4.6 million (–12.3 m)
  • Loss after tax of SEK –4.8 million (–15.1 m)
  • Underlying operating loss for Q2 of SEK –1.0 million (–7.4 m) before non-recurring costs
  • Earnings per share SEK –0.01 (–0.05)

Significant events after the end of the period

  • Swedish order for delivery of bioenergy plant worth around SEK 28 million
  • Declaration of Intent signed with Snowman concerning formation of joint company to develop the Chinese market and create an industrialised manufacturing base for Opcon Powerbox
  • Order for one Opcon Powerbox ORC and one Opcon Powerbox WST from Snowman as reference equipment for the Chinese market

In a relative comparison to the previous report(s) and in my opinion, the numbers are fantastic.

Why?

Because, I believe the numbers points towards a near future transition from a negative to a positive net result, independently of major near future triggers. This attracted me. During the last days of august, I made a statement and transferred / invested ~20% of my total portfolio in Opcon. A few weeks ago, my friends and colleagues were laughing. Today, I am laughing. Hopefully, the laughter will last until I exit Opcon. I did not make the move solely based on the numbers of the report. I defined the numbers in the latest report as the receipt, confirming earlier investigations and conclusions around the Opcon activities and the technology.

Let´s dive into the full version of the latest report:

I am not an old timer, so I could relatively easy gather enough of courage to put full trust in the the following statement by the board:

“With an expanding order book, the existing cost savings programme and the plans for the formation of a JV together with Snowman in China together with other activities in China, capacity utilisation is expected to increase, and the Board expects Opcon to report positive earnings for 2014.”

http://www.opcon.se/web/Reports_3.aspx?rid=917250

Now, the full paragraph:

In Fuzhou Snowman has built a completely new factory for production of compressors developed by Opcon. It is estimated that future licensing income from Snowman’s production for the period 2014-2024 could exceed SEK 100 million. In 2013 alone, sales of compressor development to Snowman almost tripled to exceed SEK 30 million. In 2014 Snowman has placed further major development assignments with Opcon. For Opcon, Snowman’s investment and the collaboration that has begun mean that Opcon looks forward to receiving further development assignments from Snowman over a long period within industrial refrigeration compressors, an area in which Opcon is strengthening its capabilities. Furthermore, the trust earned through collaboration means that the companies are now expanding collaboration to include Opcon Powerbox. The purpose is to create a joint venture to develop the Chinese market and create an industrialised manufacturing base for Opcon Powerbox that can also be used by Opcon on other markets. Opcon considers the extension of the collaboration to have great importance and considerable potential. It can have decisive significance for Opcon’s future profitability. Another important part of the current restructuring of Opcon is the extensive changes being made within the bioenergy operation that in recent years has suffered significant losses. In recent years strong measures have been implemented, including cutting the workforce, closing development projects and achieving a new, outsourced production structure. Some of the technology has been licensed with good results.

For some time now a large programme of measures has been implemented in Sweden and abroad with the main emphasis on the bioenergy sector. As a result, Opti Energi AB, Opti Energy Group AB and Opcon Bioenergy AB are being decommissioned and wound up in Sweden. Bioenergy activities are being focused on Saxlund and an increased international focus. The parent company’s operations in Åmål are being closed down completely. The savings programme, which includes reduced personnel costs, reduced cost of external consultants, IT and administration and reduced financing costs, is expected after enlargement to yield annual savings in excess of SEK 30 million compared to 2013, with effects in 2014 expected to exceed SEK 20 million. Over the past one and a half years, major interest-bearing debts have been paid off. The Board notes that although major challenges remain, significant steps have already been taken to reduce costs, and these efforts have begun to show in financial results. In Q2 costs for remuneration to employees were around SEK 3 million lower than last year, while financing costs for the first six months of 2014 were around SEK 7 million lower than the previous year. With an expanding order book, the existing cost savings programme and the plans for the formation of a JV together with Snowman in China together with other activities in China, capacity utilisation is expected to increase, and the Board expects Opcon to report positive earnings for 2014.

My conclusions:

Positive: International focus. This is what should attract new investors (like me). Electricity is cheap in sweden. Creating value from a joint venture with Snowman should be an excellent strategy!



Negative: In the report, I sense that one final and last dilution manouver i.e. (directed) emission might take place in the near futre. If so, I estimate that the dilution factor can be ignored (based on nothing, but gut-feeling).

Update February 21: CESI no longer expects an emission based on the positive numbers in the new 

INTERIM REPORT OCT–DEC 2014 & FINANCIAL STATEMENT JAN–DEC 2014



Very interesting: What strikes me most while reading the full version of the (now old) INTERIM REPORT JANUARY–JUNE 2014 report is the fact that I cannot find any info around the activities in Australia (please correct me if I am wrong). The activities I refer to are potential activities by the Australian partner Enerji.

http://www.enerji.com.au/

This is what makes me really interested. Carnarvon have started to produce waste energy with exceeding expectations and this was announced in the end of 2013.

“On 14 November consent was received to take the system to full operating temperature of 130 degrees Celsius, and heat recovery temperature has been increased with maximum available heat being recovered from the host power station. The limited heat available from the host plant is sufficient for electricity output of around 300 kilowatts. Notably, this output has exceeded expectations in that it was achieved without fine tuning and optimisation of control settings”

http://www.proactiveinvestors.com.au/companies/news/50326/enerji-limited-producing-waste-heat-at-full-capacity-in-carnarvon-western-australia-50326.html

In my opinion, another 6 months without news from Australia is not too long period of time. The Opcon powerbox is not a 5 dollar gadget, perfectly suited for instant capitalization. My understanding of the Opcon Powerbox technology is that it simply delivers. In the near future, it should also be an attractive cost saver in the global context and – in the land down under!

And even more interestingly, why has the Enerji share price recently and suddenly climbed ~100 % ?

http://www.proactiveinvestors.com.au/companies/news/57457/enerji-resources-queried-on-price-rise-57457.html

Enerji is defining in total 5 ongoing projects in Australia : 

  • Pilbara “the Carnarvon pilot plant improvements are taken into consideration, i. e. this should be a very recent project!
  • 3 complex projects involving large industrial facilities in different regions of Australia
  • A larger scale power station project

Enerji also states that the highest priority is to establish commercial growth.

 http://www.asx.com.au/asx/research/companyInfo.do?by=asxCode&asxCode=erj (see attached pdf)

Back to the Snowman Joint venture ambitions:

“Opcon’s contribution to equity will be by a system technology license of its proprietary Opcon Powerbox ORC and WST (West Steam Turbine) technology in the Territory with certain exclusivities in China and parts of Southeast Asia. The JV will be granted exclusive manufacturing and sales rights of the Opcon Powerbox in China and exclusive manufacturing and non-exclusive sales rights for Taiwan, Thailand, Vietnam, Indonesia, Malaysia and North Korea.”

It appears like the long awaited larger orders from Asia soon might be announced. How much will a large order trigger the share price? I have no clue, but my estimate is that the old-timers (the 2010 investor´s) 96% loss will be substantially reduced. The market is global. The potential is huge. I believe the down-side is limited, primarily due to the last years historical plot of the share price combined with the recently improved financial result. I also believe a market cap around 200 mSEK is very low for this company with a mature eco-friendly Powerbox, embraced by China and ready for launch! 

Finally, the last days, insider share purchases have been reported (Mats Gabrielsson 2 million shares and Niklas Johansson 175 million shares)

Best regards, Cutting Edge Science Invest

The author, Cutting Edge Science Invest, is an Opcon share holder. 

Cutting Edge Science Invest can not guarantee, or take into  accountability, the content of truth and accuracy of the information in this article/post.Thus, Cutting Edge Science Invest requires that a possible reader gather complimentary information if any type of investment in the company described above is considered.

Cutting Edge Science Invest´s provides personally biased information and at best also “general information and opinions”.

The article/post does not contain professional investment advices. 

 

 

 

Jan 20 update: Currently, C.E.S.I. does not own any Medivir shares (the author will likely stay out for a few more months)

Johnson & Johnson / Janssen accounts for the global sales of the Swedish pharmaceutical company Medivir. Their crown jewel is a HCV drug entitled Olysio. Simeprevir is the active pharmaceutical ingredient. My prediction is that this milestone in Swedish drug discovery will not end within a few days, weeks or months, as the market already seems to estimate! Due to the continued strong global market uptake for Olysio/Simeprevir, I am convinced that we still are turning pages of the first chapter of this story!

Most recent Medivir presentation: http://www.medivir.se/v5/images/pdf/2014/Carnegie-Small-Cap-Day-3-September-2014.pdf

Interim Report, January – June 2014:

http://www.medivir.se/v5/en/uptodate/pressrelease.cfm

  • Net turnover totalled SEK 772.2 million (SEK 218.8 m), of which SEK 662.4 million was contributed by royalties for simeprevir. Revenues from Medivir’s own pharmaceutical sales totalled SEK 109.2 million, SEK 21.7 million of which derived from sales of Olysio and SEK 87.5 million from sales of other pharmaceuticals. The profit/loss after tax was SEK 611.7 million (SEK 7.5 m).
  • Basic and diluted earnings per share totalled SEK 19.57 (SEK 0.24) and SEK 19.18 (SEK 0.24), respectively.
  • The cash flow from operating activities amounted to SEK 31.0 million (SEK -27.2 m), while liquid assets and short-term investments totalled SEK 430.4 million (SEK 279.9 m) at the period end.
Summary of the Group’s figures, continuing operations
(SEK m)
Q2 Q1-Q2 Full year
2014 2013 2014 2013 2013
Net turnover 564.0 40.7 772.2 218.8 446.1
Gross profit 518.8 23.5 700.9 183.8 374.3
Operating profit before depreciation and amortisation (EBITDA) 424.4 -46.9 521.2 43.6 76.4
Operating profit (EBIT) 416.2 -62.0 504.9 14.7 25.2
Profit/loss before tax 418.4 -62.1 508.7 14.5 27.7
Profit/loss after tax 327.8 -63.7 611.7 7.5 16.0
Operating margin, % 0.7 -152.3 0.7 6.7 5.6
Basic earnings per share, SEK 10.49 -2.04 19.57 0.24 0.51
Diluted earnings per share, SEK 10.28 -2.04 19.18 0.24 0.51
Cash flow from operating activities 88.7 -8.3 31.0 -27.2 43.0
Liquid assets and short-term investments at the period end 430.4 279.9 430.4 279.9 402.2

Significant events during Q2

  • Olysio (simeprevir) was approved within the EU for the treatment of adults with hepatitis C genotype 1 and 4 infection, and was launched by Medivir in Sweden, Denmark, Norway and Finland.
  • Adasuve was launched in Sweden, Norway, Finland and Denmark.
  • A supplemental New Drug Application for simeprevir in combination with sofosbuvir was submitted to the US FDA.
  • Final phase II COSMOS study data of simeprevir in combination with sofosbuvir was presented at EASL.
  • Two phase III trials evaluating combination treatment with simeprevir and sofosbuvir were initiated.
  • A new Board of Directors was elected at Medivir’s Annual General Meeting and Birgitta Stymne Göransson was elected Chairman of the Board.
  • Suscard was re-launched into the Swedish market.

Significant events after the end of Q2

  1. FDA granted Priority Review for simeprevir in combination with sofosbuvir supplementary New Drug Application.
  • Respiratory Syncytial Virus drug program was licensed from Boehringer Ingelheim.
  • Medivir’s Board of Directors has appointed Niklas Prager as new President and CEO of Medivir effective 1 September 2014.

* All figures refer to the Group, unless otherwise stated. Comparisons in the Interim Report are, unless otherwise stated, with the corresponding period in 2013. Cross Pharma was divested from the Group on 30 June 2013.

The hepatitis C market is predicted that the total turnover of 20 billion U.S. dollars to 2030!

http://www.achillion.com/HCV_overview

My summary:

The long-awaited new CEO, Niklas Prager, states that “I will be focusing on further value creation and enhanced visibility of Medivir´s potential ”

Today (9/7/2014), it is a fact that Medivir´s sales dramatically exceeds many analyst´s estimates.

Once a week, new prescription metrics are published by “H3NPHLO” and “A White Prism” on twitter/internet). The author (Cutting Edge Sicence Invest),  takes no accountability of the quality / accuracy of these numbers!). Even this week (ending September 5th)  and despite the fact that Sovaldi (Sofosbuvir, Gilead Sciences Inc, Nasdaq, GILD) dominates the market, Olysio seems to successfully defend its current market share (~25%).

At the Carnegie Small cap presentation (September 3th), Rein Piir (EVP Corporate Affairs & IR – Investor Relations) verbally mentioned that the sales number of Q3 will increase relative Q2

During the autumn, Medivir´s business strategy is expected to be announced and all that it entails. How will the full year´s extreme liquid assets be invested?

The market cap (~ 4000 mSEK) is very low in relation to the estimated full years liquid assets: ~2000 mSEK (Q1+Q2 = 850 mSEK, Q3 >Q2 (according to Rein Piir) and Q3 ~ Q4 (Cutting Edge Science Invest estimate).

The recent 3 months share price has been very volatile (~111 SEK – ~150 SEK, 138 SEK september 5th ) https://www.avanza.se/aktier/om-aktien.html/5380/medivir-b

Source:  https://twitter.com/H3NPHLO/status/507168948287438848

Australia: Pharmaceutical Benefits Scheme (PBS) will subsidize Olysio but not Sovaldi. This is sad news from an open market- and the patient´s perspective. http://hcvadvocate.blogspot.se/2014/08/australia-pbac-decisions-mixed-bag-for.html

J & J / Janssen has recently signed an Olysio agreement with Spain.  http://www.elconfidencial.com/sociedad/2014-07-28/simeprevir-la-mejor-noticia-en-los-ultimos-25-anos-para-los-pacientes-de-hepatitis-c_166679/

Medivir is already approved in the United States, Canada, Russia, Japan and Europe. Soon, more countries will probably follow. Asia? Africa?  South America?

What primarily makes a full analysis of the competitor space within the HCV disease area extremely difficult and complicated is the fact that there are at least 6 genotypes, i. e. genetic strains, of hepatitis C virus:

http://hepatitis.about.com/od/diagnosis/a/HCVGenotypes.htm

The American Association for the Study of Liver Diseases (AASLD) genotype/recommended treatment chart will also delivers more insight into this complex disease are:

http://www.hepmag.com/articles/2512_18756.shtml

Today, the main and correct focus by analysts is the near future launch of new HCV drugs and combos:

http://clinicaltrials.gov/show/NCT01628692 (Simeprevir and Daclatasvir, interferon free)

http://www.dddmag.com/news/2014/05/janssen-submits-snda-simeprevir-sofosbuvir-combo

http://www.hepmag.com/articles/sofosbuvir_simeprevir_2501_24726.shtml

http://www.hepmag.com/articles/Sovaldi_cost_2501_25467.shtml?utm_source=mpnews&utm_medium=include&utm_campaign=treatment

Medivir is awaiting its phase III data (OPTIMIST, Simeprevir/ Sofosbuvir).

“Combination therapy with Simeprevir and sofosbuvir (Gilead, the main competitor with about 75% market share today) without interferon and ribavirin in the previous phase II study COSMOS demonstrated favorable safety and efficacy results in genotype 1-infected hepatitis C patients. The purpose of the OPTIMIST trials is to coat these good results and to investigate the possibility of shortening the treatment time to eight weeks to possibly further simplify this promising treatment regimen ” (www.medivir.se)

I believe Medivir´s Simeprevir/Sofosbuvir combo will face fierce competition within the US post launch of the competitors drugs. But. I still believe other combinations containing Simeprevir ( Gilead´s Sovaldi/Sofosbuvir exluded) might be better positioned in the drug hunters race for the 20 billion U.S. dollars (http://www.achillion.com/HCV_overview).

Selected new Simeprevir data:

  • The phase III ATTAIN study in treatment-experienced adult patients with chronic hepatitis C virus (HCV) and compensated liver disease achieved its primary efficacy endpoint by demonstrating non-inferiority of simeprevir compared to telaprevir when both are given in combination with PegIFN/RBV. Simeprevir demonstrated superior safety profile including fewer adverse events (AEs), fewer serious adverse events (SAEs) and less anemia versus telaprevir.
  • Pooled analysis of data from the phase III QUEST-1 and QUEST-2 studies confirmed efficacy in treatment-naïve genotype 1b HCV patients, with 85 percent (ITT analysis) of treatment-naïve patients achieving SVR12 when treated with simeprevir in combination with PegIFN/RBV, compared to 53 percent when treated with placebo in combination with PegIFN/RBV.
  • In the PROMISE phase III trial of prior relapse patients, a subgroup analysis of genotype 1b patients demonstrated that 86 percent (ITT analysis) of these patients achieved SVR12 when treated with simeprevir in combination with PegIFN/RBV, compared to 43 percent when treated with placebo in combination with PegIFN/RBV.

http://www.medivir.se/v5/en/uptodate/pressrelease.cfm?releaseid=4EDB6FC299690E5F&year=2014

http://www.medivir.se/v5/en/uptodate/pressrelease.cfm?releaseid=38CAB19B5909B757&year=2014

The cost debates are getting more intense, due to the larger and larger patient groups are lining up to get the new superior treatment regimes. But has the cost debate been properly reviewed by analysts?

CVS Caremark estimates Sovaldi alone will add $300 to everybody’s insurance premium, with megadrugs for other common diseases like cholesterol and diabetes coming.

http://www.marketwatch.com/story/gileads-earnings-report-affects-every-american-2014-07-23

In fact and surprisingly often, articles referring to future Gilead competitors do not even mention Olysio/ J&J/Janssen/Medivir.

The dedicated swedish (Avanza/Medivir) bloggers have highlighted and answered many key questions in the Olysio market share discussion. One of these bloggers, Prisma, comments (summarized and translated by C.E.S.I.):

https://www.avanza.se/placera/forum/forum/medivir.html

“Today, Olysio is offering a treatment that costs 25-40% against competitors with high cure rates in genotype 1 and 4 with interferon-based treatment. The hype regarding interferon free treatment for a broader group of patients started primarily by analysts in the United States where insurance companies by law must offer the best treatment with the best side effect profile,  if approved by the FDA. Today, the market is focusing on the best treatment(s) – to a very high drug cost.

However, it seems that  US analysts forgot to take the non-insured patient community into consideration. Medicaid / care (100 million persons), prisons and veterans´ organizations are price sensitive! Analysts seem to have missed the fact that this type of drugs are so expensive for the community that the price often becomes a more important factor than convenience in drug recommendations. The key question is and will always be: To cure one patient in a comfortable regime or three in an uncomfortable regime?  In addition, Olysio cure rates are often better in its genotypes with interferon than e.g. Abbvie and BMS without supplimentary interferon. Most health care systems outside the United States are very price sensitive, thus in the future, Interferon-based therapy might still be attractive (as the price drops significantly). In addition and for  the majority of the current genotypes, the cure rates is equal or even higher.”

If J&J/Janssen/Medivir succesfully keeps a small market share, the yearly liquid assets will remain very high (multi-billions). I do believe that sales will decline, but only marginally or moderately.

Simeprevir/Olysio is also a key money maker for Johnson&Johnson. The following statement is extracted from the Johnson & Johnson´s 2014 Second-Quarter Results report:

“The strong sales results were primarily driven by new products including OLYSIO®/SOVRIAD® (simeprevir), for combination treatment of chronic hepatitis C in adult patients; XARELTO® (rivaroxaban), an oral anticoagulant; ZYTIGA®(abiraterone acetate), an oral, once-daily medication for use in combination with prednisone for the treatment of metastatic, castration-resistant prostate cancer; INVOKANA® (canagliflozin), for the treatment of adults with type 2 diabetes; and IMBRUVICA® (ibrutinib), a kinase inhibitor for the treatment of mantle cell lymphoma and chronic lymphocytic leukemia in patients who have had at least one prior therapy.”

http://www.investor.jnj.com/releasedetail.cfm?ReleaseID=859681

Johnson&Johnson/Janssen is not a one-trick pony. I expect that over time, the company and it´s world class sales force aggressively will nurture global sales by signing new deals with more countries and creatively drive sales of new combinations containing Simeprevir. The presumable (lowering) drug price strategy* will of likely also be applied by Johnson&Johnson/Janssen/Medivir.

http://www.streetinsider.com/Analyst+Comments/Generic+Sovaldi+For+Poor+Countries+is+Nothing+New,+Says+RBC+(GILD)/9809945.html

0% global Market share within a few months? My prognosis and answer is simply “Very unlikely”.

In this link you´ll find Medivir´s entire research portfolio, but in this (first?) article, I choose not to comment upon additional potential near future share value triggers.

http://www.medivir.se/v5/se/RnD/project_portfolio.cfm

Let´s just state that Medivir’s research portfolio should mature as time goes by…

Medivir has recently introduced new drugs on the market: Adasuve (schizophrenia, the first inhalable drug for the treatment of agitation) and Suscard (angina, the most common heart disease in the Western world). Medivir has also in-licensed a RS-program from Boehringer Ingelheim

Jefferies has published this estimate of near future sales:

https://twitter.com/H3NPHLO/status/446265282802094080/photo/1 ,

but today’s figures are substantially higher:

https://twitter.com/A_White_Prism/media

Main risk: That the competitors near future launches very quickly results in a 0 % global market share for Olysio and Simeprevir (in various combos). Ok, new drugs and combos are entering the arena (Merck, Gilead, Abbvie etc, Bristol Myers Squibb etc.). Gilead will have an edge in the US with its (expensive) Ledispavir/Sofosbuvir (the Simeprevir/Sofosbuvir combo will also be expensive).

AbbVie, with the antiviral agents ABT-267, ABT-333 and ABT-450/ritonavir, will require multiple treatments per day (which might be classified as a difficult/complex practical procedure for the patient)

http://www.fiercebiotech.com/story/gilead-gets-its-hep-c-combo-fda-abbvie-race-heats/2014-02-10

http://www.fiercebiotech.com/story/abbvie-heads-fda-its-hep-c-combo-race-gilead-merck/2014-04-22

http://seekingalpha.com/article/2260133-gilead-sciences-killing-the-competition-with-sovaldi-but-does-this-make-gilead-a-one-trick-pony

Miscellaneous risks (not mentioned above):

Risk 1: Gilead withdraws sales of Sovaldi (Sofosbuvir) after launch of the Sofosbuvir/Ledipasvir combo. I see this as highly unlikely. Primarily and to the best of my knowledge, Sovaldi is the biggest launch ever of a new drug in first-quarter sales .

Risk 2: External negative market factors (global crisis, war, global stock market collapse).

Risk 3: Unexpected toxicity findings post drug launches.  The probability should be low due to the short period of treatment (24 or 12 weeks, soon maybe 8!)

Update Jan 2015: The market does not embrace JNJ sufficiently and the sales has been lower than the market expected. Therefore C.E.S.I. awaits the right moment to re-enter Medivir.

Best regards, Cutting Edge Science Invest

Cutting Edge Science Invest is currently not a share holder (this post was slightly updated jan 20, 2015)

Cutting Edge Science Investor can not guarantee, or take into  accountability, the content of truth and accuracy of the information in this article/post.

Thus, Cutting Edge Science Invest requires that a possible reader gather complimentary information if any type of investment in the company described above is considered.

In other words: Cutting Edge Science Invest´s provides personally biased information and at best also “general information and opinions”.

The article/post does not contain professional investment advices.  

Cutting Edge Science Invest also wants to point out that the real risks are those you never knew existed – until it was too late.