Patrys Ltd: A Detailed Analysis of Financial Stability & Prospects

This report provides a financial analysis of Patrys Ltd, an Australian biopharmaceutical company listed on the ASX. The analysis examines the company's financial stability, past performance, and future prospects. It highlights the company's history of losses, declining revenue, and decreasing cash reserves, but also notes its debt-free status and potential for growth based on its innovative product pipeline and patents. The report compares Patrys' performance to the broader Australian biotech industry, noting its underperformance relative to its peers. Despite past financial struggles, the report suggests that public confidence in the company and improving fundamentals, coupled with strong management and effective marketing, could drive future growth. The report also suggests potential funding options for the company, including issuing right shares, corporate bonds, or securing bank loans. Desklib is a great resource to find similar solved assignments.

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NOTE ON FINANCIAL STABILITY OF PATRYS
&
FUTURE PROSPECTS
1.0 Background
1.1 Patrys1 Limited is a public listed company on Australian Stock exchange trading at AUD 0.05
on 01-06-2018. The company is engaged in the business of development and commercialization
of biopharmaceutical products for treatment of cancer. The company is headquartered in
Melbourne, Victoria. The company is financed by equity with no debt.
1.2 The company has 2 technology platforms: one is IgM monoclonal antibodies and other is suite
of nuclear penetrating antibodies for cancer therapy. The company distributes its product in
different countries such as US, Japan, Canada etc.
2.0 Data Analysis
2.1 The Company has been incurring loss over the past2 years. The company has 1.073 Billion
shares outstanding as on date with the following key ratios:
Sl no Particulars Ratio
1 Price to Earnings Ratio Earning is negative hence not
computed
2 Price to Book Ratio 24.1488
3 Price to Sales Ratio 99.0543
4 1 year return 936.23%
5 Market Capitalization AUD 0.0535 Billion
The o
2.2 Other key factor for the purpose of analysis has been detailed here-in-below:
1
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Sl no Particulars 30/06/2017 30/06/2016
1 Operating Cash Flow (1276.981) (1531.357)
2 Long Term Debt 0 0
3 Cash and Cash Equivalent 1910.952 3215.039
4 Total Revenue 531.729 867.653
5 Net Profit (1057.876) (1080.784)
6 Net Intangibles 663.75 708.75

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2.3 Measuringpast performance of the company is an important tool for investors to understand the
prospect of the company. It helps to understand whether the company has underperformed or
has met the expectations of the investors. This is an insightful signal for future performance of
the company.
2.4 On the basis of the above data, it may be seen that the net loss has reduced over the year on
year while revenue has decline. Further, cash and cash equivalent has reduced drastically on
account of losses year on year. However, the prices and market capitalization has risen by
936% on account of trust on future prospect of the company.
2.5 It may also be seen that company is virtually debt free which is a very significant factor for the
future prospect of the company as it can reap the benefit of the same.
2.6 On a deeper analysis of previous data, an annualized five-year figure for PAB’s4 earning which
stands at AUD (4.64). Thus, the loss has declined over the years which are a positive signal for
the company.
2.7 We can further assess loss of company by looking at the industry in which the company is
operating. Over, the years, Patrys has seen an annual decline in revenue of -7.25%, on average.
This under performance has been driver of the company’s inability to reach breakeven. It is
very prospective to analyze whether the entire industry experienced this headwind?.
2.8 On analysis of the companies on similar sector level, the Australian biotech’s industry has seen
a rampant growth by double-digit 21.75% over the past year, and 34.09% over the past 5 years.
Thus, on the basis of it may be concluded that the same uplift has not been reflected in Patyrs
accounts and has not been able to gain as much as its peers.
2.9 Further, the prices of the company cannot however be dependent on past fundamentals only.
One has to take an in-depth look on the vision, management future endeavors etc
2.10 On this front, the company has huge patents5 in its pipeline and many assets are under
development stage of the company which shall give it a competitive edge over its peers
provided proper management and marketing is carried out. Further, a power6 new cancer
treatment approach being developed by the company can be a game changer and can give a
sharp boost to revenue and profit of the company.
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2.11 Thus, on the basis of the above it may be concluded that company growth potential is strongly
driven by its innovativeness and patents. Management plays a key role in its future outlook.
Further, it may also be seen that general public has huge confidence in the company and the
fundamentals are improving slowly with a strong cash pile at its disposal.
Comment: The growth prospects look positive on the basis of innovative product in its
pipeline.
2.12 The subject company can raise fund through following options:
 issue of right shares;
 Issuing Corporate Bonds;
 If above option does not work company can opt for loan from banks;
 Company may also sell some loss making units.
References:
Patrys.official website [document on the internet];Patrys Limited; no date [cited 2017] Available
from:http://www.patrys.com/
2Pratys.Annual Report[ document on the internet].Pratys Ltd Annual Report ;2017 Available from
https://www.asx.com.au/;
3 Bloomberg official Website [document on the internet];Patrys Limited share price: 2018 [cited 2018 June 02].
Available from: https://www.bloomberg.com/quote/PAB:AU
4Simply Wall St. With A -54.14% Earnings Drop, Did Patrys Limited (ASX:PAB) Really
Underperform[document on the internet] Simply Wall st.;2018, Available
fromhttps://simplywall.st/stocks/au/pharmaceuticals-biotech/asx-pab/patrys-shares/news/with-a-54-14-earnings-
drop-did-patrys-limited-asxpab-really-underperform/
6Ramsay Health Care Limited. Financial and Strategic SWOT Analysis Review[document on the
internet].Global Data;2017 Available from:https://www.bioportfolio.co.uk/product/196263-patrys+ltd+%28pab
%29+-+financial+and+strategic+swot+analysis+review.html
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