TRANSCRIPTION OF FINANCE NEWS NETWORK INTERVIEW WITH STIRLING PRODUCTS LIMITED
(ASX:STI) MANAGING DIRECTOR, PETER BOONEN
Clive Tompkins: Hello Clive Tompkins reporting for the Finance News Network. Joining me for an update from pharmaceutical’s company Stirling Products is Managing Director, Peter Boonen. Peter welcome back. Let’s start with your announcement this morning, the appointment of Professor Glyn Tonge as a non-executive director. Can you give us some background on him?
Peter Boonen: Professor Tonge was introduced to us through institutional interests in London and following that introduction, we’ve had the opportunity to get together a number of times both in the UK and in Australia. And Professor Tonge showed a very strong interest in what we’re doing and also very solid understanding, where he’s got a solid background in pharmacology in the industry. Then later on in the actual practical sense and in the investment industry, he’s worked as an analyst, he’s worked as a funds manager. So when the opportunity arose and the discussion centred around what he could contribute to the board and to the company, we of course jumped at that with open arms and we very much look forward to a great relationship and a great contribution.
Clive Tompkins: Now to your new plant in Canada. When we last spoke you mentioned the purchase being subject to court approval, you’ve got that and have settled on the property. What does the purchase mean for Stirling Products?
Peter Boonen: Purchase price and terms of purchase price Clive, is for Stirling just a massive opportunity. The plant’s near new, it only opened for about two months before it unfortunately went into receivership and if we were to build it today and have it up and ready as a going concern as it is today, replacement costs would be in excess of $20M. So for Stirling, clearly, that’s you know if you have a look at our market cap today, it’s just the Plant and adding our other property if you like, there’s 2 cents a share. So, you know where it adds and consolidates a tangible asset base, which we’ve been working on and then also offers that massive opportunity to create business manufacturing and profits derived there from. And most importantly from a very, very low capital base rather than a highly leveraged or mortgaged situation where, if from our position, we’re looking at a terrific return on funds invested. The other big plus is the terms on which we’ve bought it, where it’s essentially three and a half years extended settlement and vendor terms.
Clive Tompkins: So do you have any immediate plans for production?
Peter Boonen: Yes Clive absolutely. Where we are positioned as a company now, we’ve got our relationship with Cipla and we’re launching our Stirling Health brand in Australia as of this month in fact. Now we’re exploring situations with Cipla where we can use our plant to advantage, that which will add to our own generic capacity and our own capacity to make other pharmaceutical product. We’re having discussions with other parties now in relation to contract manufacturing, and we’re also having discussions with the Canadian Government with regard to some of the projects that they have an interest in, that we may be participating in using our plant. So we’re very much looking forward now to certainly putting it into production and certainly to have it operating profitably in the relative short term.
Clive Tompkins: And how much does the plant cost to run in its current state?
Peter Boonen: At the moment the way we’ve taken it over $15K a month, we’ve got six months before we’ve got to start making capital repayments which are then $25K a month. So on the basis that we start to click in some contract work manufacturing work, things will scale up - so we’ve got a head start, we’ve got a six month head start where it’s a very, very low, let’s call it holding cost, $15K a month.
Clive Tompkins: Peter now for an update on your products, how’s progress - first up, Immunoxel?
Peter Boonen: We’ve just got Ethics Approval for a trial that we’re doing in the Ukraine which is actually its application to flu, so not sure if you should preface that by diseases. And in Nigeria we’re expecting Ethics Approval anytime very soon for our trial with AIDS patients and our TB HIV co-infected patients. And we are continuing with our trial work, our validation work essentially westernising the data.
Clive Tompkins: And now to R-Salboutamol?
Peter Boonen: R-Salboutamol in its animal application, we’ve joint ventured that with Animate Animal Health in South Africa. They’re continuing with the trials leading up to commercialisation and they will lead the commercialisation efforts on that on a joint venture basis. And from the human side the R-Salboutamol for obesity application, we’ll still sit on. We’re essentially moving the whole company towards being a generics and pharmaceutical and human healthcare group.
Clive Tompkins: And what about progress with the inhaler?
Peter Boonen: Our inhalation drug platform - we’ve engaged electrical engineers, plastic experts, design engineers. By the end of the year or the first quarter next year, we should have a range of pre-production models available for testing and trialling.
Clive Tompkins: And finally your other botanical products?
Peter Boonen: With our other botanicals and including Immunoxel as dietary supplements, we’re very close to having a major initiative in launching from North America and it’ll launch firstly as an internet based network sales organisation, where we can spread the information or the information can go out literally to millions. The purchasing initiative also goes to millions as opposed to trying to get it into shop shelves and educate a market to purchase through retail.
Clive Tompkins: Peter Boonen exciting times ahead, congratulations.
Peter Boonen: Thanks Clive.
