Quarterly Activity report

https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02940296-3A666948&v=7bc42bd11d853ed5e8c28f2ffcd6a069ee5cd6b4

Well the market certainly liked it (up over 30% so far today)

Nice to see genuine cash flow positivity

Things seem generally headed in the right direction. I like the management focus on reducing costs and concentrating on Australia and Europe

Main concern is the lack of increase in revenue from the main pain relief segment and well as the poor outlook for the second half due to "phasing" and "currency". I need to understand better what is going on there

Remains very cheap. EV/revenue is less than 1, even with the big SP rise today

IF they can continue to grow revenue in Aus/Europe and control costs, this could easily multibag.

The product has always been good. From here it's all about management executing

The historical pattern seems to be that the SP jumps on positive announcements and then drifts back down. If that pattern repeats, I may be tempted to add to my small irl holding

This is one that I got terribly wrong. I sold out at least a year ago for a big loss but glad I got out when I did.

They have a great product in Oz and should have been able to make it work internationally. Execution and capital management have been abysmal and it doesn't seem to be getting any better.

Another example of an Australia health company that cannot turn a great product into a viable business. So disappointing. This slide tells you all you need to know:

good luck to anyone still holding !

I got high on the green whistle today while getting my wisdom teeth extracted, while high I seemed to have become a shareholder in MVP again. I've now got a week off work to regret my decision and do a deeper dive on MVP. On a high level though:

The good things happening with MVP:

• Demand is growing in Australia, and prices are to be increased in Australia
• UK paediatric trial - submission expected Q3 FY24.

The concerning things happening with MVP:

• Australia still seems to be golden country for Penthrox.
• Penthrox is still the crown jewel of this company with limited diversification.
• The "US Re-entry" is STILL being played out - FDA has cleared Penthrox for a clinical trial.
• Exit of China market - need to look into this further but it seems like a missed opportunity? Poor execution?
• Review of Europe model and scale back of spend in France due to "market conditions"
• Revenue up 47% but EBIT (-$18.3) and NPAT (-$5.6m) still at a loss. Capex is still large, approx 24% of revenue
• I last exited MVP at $8.70 in 2020 - 4 years later the share price is now $0.835

Disclosure: Held IRL.

The retail entitlement offer closed, with only 21% take up. That is not surprising considering the shares have been trading at a discount to the offer, currently sitting around 12%. Why take up the offer when you can just go on the market and buy the shares?

That means that Bell Potter will need to underwrite ~$20m. And they are not going to want to be left holding the bag. So they are going to want to sell those shares over time no doubt. Which means, there could be further downward pressure on MVP. This is obviously exacerbated by the recent result which was not fantastic (Europe grew slower than expected, etc).

In terms of cash flow for MVP however, I think they will have enough cash to fund the expansion for some time. We shouldn't need to worry about further dilution unless there is a massive failure in the FDA approval process requiring an expanded clinical trial, or massive failure in the European scale-up requiring more SG&A without the incoming cash flow.

I think anybody that has been paying attention to MVP knew this one was coming. A Capital Raise has been announced, the important info - 1 share issued for every 9.5 held at a price of $2 a share. Options will also be issued at a price of $2.80, 1 share for every 2.5 of the new shares issued expiring on the 30th of September 2024.

Total funds to be raised is $30m with the money directed to go towards Australian expansion and European growth. An update was also given on guidance;

• revenue: A$22.4m; +37% on prior corresponding period (PCP)

o Penthrox revenue: A$13.7m; +29% on PCP

o Respiratory revenue: A$8.2m +53% on PCP

• underlying EBIT1: A$(14.7m)

• EBIT: A$(15.9m)

• cash at bank: A$20.4m

Personally I hate this new trend of options that come with capital raises. If one like the business then buy more shares instead of this nonsense but I'm sure others opinion differ for a variety of reasons. I will be taking up my allocation in full as I hold this company IRL and still believe in the product and have used it first hand (I'm sure plenty on strawman members have). The real question is if management have the capability to execute their growth in Europe and North America so shareholders will be rewarded which still make this a high risk company to be invested in as that answer seems less than straight forward.

Endo International plc to distribute Penthrox in Canada

• Release Date: 10/05/22 15:35
• Summary: MVP signs new Penthrox licensing agreement in Canada
• Price Sensitive: Yes

I thinking the share markets were bearish in May 2022..So MVP could get some momentum going forward..