The engines have fired up at last for MDX. ( BPRG ) At long last they are being recognised for the force they will become over the next two years. On the cusp of disclosing huge revenue-earning deals with Global pharmacists. These have been hinted at as being unrolled before the years end, but may be in the next days.You still have time to get in at a bargain-basement price before the SP takes off for real shortly.

Bertas you are aboutappointment of FinnCap as nominated adviser and broker first daysomething to say.

FinnCap email this morning to fund managers.


Subject : FinnCap Research - Morning Meeting Note (Cattles, Meldex, Savills)

Meldex International*, Keith Redpath

Meldex has a very straightforward business model: it sells prescription pharmaceuticals through its Dexo subsidiary, and OTC pharmaceuticals, vitamins, minerals and supplements through its Melbrosin subsidiary. A development function applies a proprietary formulation technology to create novel products with improved characteristics. MDX has appointed finnCap as NOMAD and broker.

-There are three components to Meldexs strategy of building a profitable, sustainable and growing speciality pharmaceutical company: sales and marketing of Meldexs own and in-licensed products; royalties from sales of out-licensed products in other territories; and product development for partners on a fee-for-service basis with milestone payments and royalties.

-Meldexs operations are truly international, with its own sales and marketing operations in the UK, Italy, France, Germany, Austria and the USA.

-Meldexs strategy is to grow both organically and by acquisition of companies and products. In addition it seeks to expand the geographical reach of its distribution network.

-Consensus forecasts for Meldex are 4.1p of earnings for the year to 31 December 2008, which at yesterdays close of 27.75p places them on 6.8x earnings and 1.1x consensus forecast sales of 51.8m, which we believe undervalues the company on industry norms for these metrics.

Very small on-line buying amounts availablesome only 1000...something strange happening? Are they all sold?

Need to look at those figures but first thought is that working on the generally acceptable average earnings ratio of 12, MDX are only undervalued at best by 42%, equivalent to a fair SP of roughly 44p, hardly the three figure numbers bandied about on this and other BBs. Own Broker forecasts are also notoriously over-ambitious so fair value probably less - seems the market agrees.

You should know better PT...under promise - overdeliver.

Quick boys fill yer boots ... quid by xmas :-)

Anyway PT eps of 4.1 on market norm (PE 15) equates to 61.5p...does it not? Your are the professional I am only a semi.

"New advisor" = good ... "experts in raising capital" - not so good......

...experts in brokering agreements between 'greedy selfish BODs caught trying to line their own nests with extra shares at knockdown prices prior to selling out, and shareholders who caught them' would be even better :-)

Semi ? Surely you are fully detached ? ...... couldn't resist that one, it was too easy :-)

Im detached from some of the spazzzmows Bert.
Someones chasing the rats tails. Yippeeeeeee!

Rescue rights issue coming soon .... you heard it here first.

I think this move cuts out any dodgy theory with the existing bodI rate RT as a deal makerI am with you on thinking the worstbut this looks kosha. Dil... leave it out!

;-))

29 minutes, Tabatha.

Better luck next week. ;-))

Luck dont come into infoits either good or bad.. although I am very..very
lucky!.dont forget to borrow the Sunday Mailnothing is written yetmight be good news for mdx?must cut the lawnthen get ready to go out with six friends we havent got.what have you got planed?.N0.82 for onewith extra curry sauce.

Luck doesn't come into it. Well , maybe if it did, you might get the week's price move correct

Kissy, kissy. ;-)

FinnCap Research today --by Keith Redpath--summarises in his morning note:-
Consensus forecasts for Meldex are 4.1p of earnings for year to 31 December 2008,which at yesterdays close of 27.75p places them on 6.8x earnings and 1.1x consensus forecast sales of 51.8m, which we believe "undervalues" the company on industry norms for these metrics..
well guys--just shows how cheap these shares are at present!..they should really be on a rating of at least 20x earnings= 82p per share!!--BUY--LOL for patient investors!

20x earnings in a bear market? Doubtful, I'm afraid.

Why 20x?

Personally I don't see how the figures add up. MDX 2007 figures demonstrated a proforma if the acquisition was included for the full period, so here's a few things to think about.

EPS of 4.1p for 2008? EPS for 2007 was 0.5p. That's quite a dramatic increase.

Assuming margins remain constant (and actually with rising costs throughout 2008, I think margins will be under pressure, not improved) an interpolated EPS would be in the region of 2.7p on the consensus forecast turnover of 52M, with a net profit of 5.3M.

To achieve 4.1p earnings, profit would have to be 8M, equivalent to a turnover of 80M. Don't forget the consensus is 52M. Like I said it doesn't add up.

This puts MDX on a PE of 10, working on 12 x earnings = SP of 34p. Undervalued then, but not by much. Judging by the reaction (or lack of it) today, I think the market agrees with me.