We believe that Neptune will be able to leverage their new outsourced manufacturing relationships to allow the company to grow more quickly in the future by outsourcing the majority of their manufacturing needs. With established manufacturing relationships, Neptune will not have to continue to grow their own manufacturing capabilities. This will save Neptune major capital expenditures in the future, as they were planning to grow the Sherbrooke facility to 500,000kg/year by 2014. This third plant expansion, with an expected price tag of $5 million, may no longer be necessary. We do not expect management to address this as it is our expectation of further manufacturing expansion, which can help Neptune accelerate their growth over time.
Lastly, we believe that management will give an update on the pharmaceutical divisions. In December Acasti Pharma gave a positive update on CaPre® that seemed to be disregarded by the investment community. Acasti released interim data on its Phase II double blinded, placebo controlled clinical study for CaPre®. The data showed a statistically significant 25% (p < 0.05) reduction in triglycerides after eight weeks of treatment in 19 patients with baseline triglyceride levels between 204 and 476mg/dl. CaPre® also decreased Low Density Lipoprotein (LDL), Very Low Density Lipoprotein (VLDL) and non-HDL lipids and increased High Density Lipoprotein (HDL). An update on next steps and recent progress for Acasti would be in line. Since the pharmaceutical divisions are seen to be major value creators for the Company an update on the neurology division should be included in the call.
We stated in the last article, "We see a path for the Company to again produce at the sales and margin levels of the September quarter beginning in about six months, and it is possible for Neptune to reclaim its lost value over the course of the next 12 months." When we wrote the last article the stock was at $1.71/share; as of the close on Friday December 11th, the stock price was $2.35 a rise of over 35% in just under a month. If the news from the call is positive, it is reasonable to conclude that the stock price can return to its pre-accident levels which would be another 100% up from here.
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