ELTP .129-Elite-Pharmaceuticals-10K-Annual report highlights.
All data can be verified from these links to the Annual Report http://www.sec.gov/Archives/edgar/data/1053369/000114420412037392/v316806_10k.htm http://www.sec.gov/cgi-bin/viewer?action=view&cik=1053369&accession_number=0001144204-12-037392&xbrl_type=v#
1)The company went from 0 products on market to 4 products on market.
We have four products currently being sold commercially, as follows:
· Phentermine 37.5mg tablets
· Methadone 10mg tablets
· Lodrane D® Immediate Release capsules
· Hydromorphone Hydrochloride 8mg tablets
2)Gross profits on revenues increased from 37% to 58%
Elite almost made as much gross profit on less revenue in 2012 as it did in 2011 before the FDA pulled the cold products
12 Months Ended Mar. 31, 2012 Mar. 31, 2011 Total Revenues 2,424,118 4,265,963 COSTS OF REVENUES 1,013,674 2,675,118 Gross Profit 1,410,444 1,590,845
3)Lab Fee Revenues increased in 2012 to $655,857 from $348,242 the previous year.
The increases in Lab Fee Revenues are almost all GROSS PROFIT, because the only extra expense is the cost of chemicals, as the lab and personnel are a fixed expense.
4)Elite's investment in Novel Labs is still carried on the books at the purchase price in 2006 at 3.3 million dollars. Read the below info and see if you think this is a good investment?
Investment in Novel Laboratories, Inc. 3,329,322
Novel Labs Investment
At the end of 2006, Elite entered into a joint venture with VGS Pharma, LLC (“VGS”) and created Novel Laboratories, Inc. (“Novel”), a privately-held company specializing in pharmaceutical research, development, manufacturing, licensing, acquisition and marketing of specialty generic pharmaceuticals. Novel's business strategy is to focus on its core strength in identifying and timely executing niche business opportunities in the generic pharmaceutical area. Elite owns approximately 10% of the outstanding shares of Class A Voting Common Stock of Novel. To date, Elite has received no distributions or dividends from this investment.
As of June 2012, the US-FDA website lists 16 products approved in the name of Novel and an additional 7 products approved in the name of the Novel’s marketing arm, Gavis Pharmaceuticals (“Gavis”). IMS data also list three additional products being marketed by Gavis. There are accordingly a total of 26 products currently identified as being approved/marketed by Novel and Gavis, with such total representing an increase of 7 products as compared to a comparable point in the prior year.
Furthermore, IMS data for the three products listed, indicate growing revenues over the last 3 years. Such revenues, as reported by the IMS were $7.3 million, 13.1 million and $24.9 million for the years ended March, 2010, March 2011 and March 2012, respectively.
We also know from public information that Perrigo Company acquired rights in 2010 for an undisclosed amount to an additional Novel ANDA approved in 2010 for the product HalfLytely®. Novel believes this is a first to file ANDA. Perrigo expects to be in a position to launch a generic version of this product later this year and they expect to have 180 days of generic exclusivity. Novel will manufacture the product exclusively for Perrigo. Annual sales for the branded product were approximately $80 million according to Wolters Kluwer.
5)CEO made a $500,000 Bridge loan to the company to keep operations expanding.Bridge Loan Facility from Jerry Treppel
On June 12, 2012, the Company entered into a bridge loan agreement (“Loan”) with Jerry Treppel, Elite’s Chairman and CEO. Pursuant to this agreement, Mr. Treppel has agreed to provide to Elite a line of credit not to exceed $500,000. Proceeds will be used to support Elite’s acceleration of product development activities.
Pursuant to the agreement, Elite has access to a line of credit in the maximum principal amount not to exceed $500,000. The Loan carries an annual interest rate of 10%, with such interest to be paid quarterly. The Loan will mature on the earlier of the date that Elite raises at least $2,000,000 in gross proceeds from the sale of any of its equity securities or July 31, 2013. Elite may prepay any amounts of the Loan without penalty. Elite may borrow, repay and reborrow under the loan.
6)CEO Comments from the PR announcing the Annual Report
Jerry Treppel, Chairman and CEO of Elite commented, "We knew fiscal year 2012 would be a difficult year with the loss of the extended release Lodrane® products. Nonetheless, we were able generate $2.4 M in non-Lodrane 24® revenues in less than one year. This was achieved by the launch of four commercial products, contract product development, contract manufacturing and with growth continuing from the existing products. We also now have four additional products before the FDA. In addition to strengthening the balance sheet, we had conversions of preferred shares, had a very important patent issued and built out 15,000 square feet of manufacturing, packaging and inventory space – more than doubling our the manufacturing space. The focus of the future will be development of abuse resistant products utilizing our patented proprietary technology." The Company will host a conference call to discuss the results of operations and provide an update on recent business developments on Tuesday, July 3, 2012 at 10:00 AM EDT. Company executives will also conduct a question and answer session following their remarks.
To access the conference call:
Domestic callers: (800) 346-7359
International callers: (973) 528-0008
Conference Entry Code: 98840
A digital telephone replay will be available approximately one hour after the conclusion of the call for two weeks until July 17, 2012 by dialing:
Domestic callers: (800) 332-6854
International callers: (973) 528-0005
Conference entry code: 98840
7)Issuance of U.S. Patent for Abuse Resistant Oral Dosage Formulation
On May 22, 2012, the United States Patent and Trademark Office (“USPTO”) issued U.S. Patent No. 8,182,836, entitled “Abuse-Resistant Oral Dosage Forms and Method of Use Thereof. The issuance of this patent will further protect Elite’s proprietary formulation for abuse resistant products utilizing the pharmacological approach. The Company has additional patents pending for its technology. A Current Report on Form 8-K was filed with the SEC on May 22, 2012, with such filing being herein incorporated by reference.
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