Regenerative medicine and vaccine development business Admedus Ltd (ASX: AHZ) posted a net operating cash flow loss of $9.561 million for the six months ending December 31 2014 recently. Notably the business has only around $9.6 million cash left in the bank as staff costs alone far outweigh revenues.
Other costs included in recent financial reports include large expenses for travel, consultancy, marketing, administration, "corporate", operations and advertising.
There's little doubt Admedus has been investing heavily in promoting its CardioCel regenerative patch used in surgery to treat heart conditions, but the spending does not seem to have translated into significant sales success.
For the first half of the financial year CardioCel sales were reported at around $1 million, with total business revenues for the period at around $4.8 million. Not very high for a company ascribed a market value of around $175 million when selling for 11.5 cents. The business also has immunotherapy vaccine trials in progress but these are at an early stage and a long way off potentially producing any revenues.
Admedus is expecting to receive research and development tax rebates this financial year, but unless CardioCel or other sales pick-up the business looks to be fast running out of cash.
The company has a history of raising capital in order to help promote sales of products like CardioCel, but so far seems to be long on promise and short on delivery.
Given the company's financial position and decidedly patchy outlook in my opinion the stock looks a sell at 11.5 cents.
