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Of course, the loss of the patent litigation damaged Amarin. But in the early days, they were pressed by analysts to recognize the exposure a company with a single product (and nothing in R&D) spending massively on sales and marketing. The now former (and that is one reason for being former) CEO seemed to be undeterred in his belief, and this commitment was while the litigation was in the pipeline. His mistakes were marked by hubris and and a lack of scenario analysis.
As to this...
What is the difference between a distribution company and a marketing company.
If going that way is less profitable for Elite, why would they do that instead of looking for a new distributor?
Almost everyone will lose. But not exactly everyone because there are assets NWBO holds, from patents to plants (facilities) and can be sold to cover some debt. So, my point remains, if preferred holders convert it is like a "religious conversion", they are believers!
Please provide some clarity about this...
absolutely correct, good stuff
Crash, spot on observations and something that real investors show be aware of. So much meaningless nonsense gets tossed around by the unknowing that "insiders" are selling to lower the price and, thus, get more shares...just nonsense. No Form 4s, no sales. And, as you point out, holders of preferred shares are like holders of debt and get first dibs on leftover assets in a BK filing. Generally, the long term value of holding preferred is that they serve like bonds to provide a long term dividend.
However, when preferred holders decide to convert it is not generally because of tax implications but because of the belief the company is going to reward them for holding common shares, as common stock tends to outperform bonds and preferred shares. It is also the type of stock that provides the biggest potential for long-term gains. Finally, it means by converting, preferred holders believe the company is not a threat for BK. Not an insignificant point!
Thanks for paying attention and allow me to explain a bit better...
Amarin decided to do a massive hiring for sales and marketing, but a deadly combination of Covid and the loss of their patent in litigation has damaged them in the US. They dumped their US S&M team and cut operating costs, in no small part because of the loss of market share to generics. They have repeated the same mistake in the EU, which is a very different place and, despite getting EMA approval (EU equivalent of the FDA), the countries get to negotiate price themselves and commercialization in one country does not mean in another.
This is a good example for Elite to be aware of and, of course, I have communicated that to Elite, along with my concerns about what they might do with commercialization. I made it clear in my emails to Dianne/Nasrat that such an expense would be foolish. I did that when I recognized the threat LCI was and this was long before Nasrat even mentioned going after distribution licenses. (Just to be clear, I send emails not just with questions for a CC but with suggestions and observations, some of which have mattered. Elite gets free consulting and I get to try to influence my investment being managed.)
So, at this point, how Nasrat has framed the discussion is okay. He would not be hiring a workforce, but a management arm for marketing and likely come up with a different distribution channel. Just to throw names out there...Cardinal Health, McKesson, AmerisourceBergen. However, those companies are very big (and also got caught up in the opioid litigation) and likely would be more costly than a LCI or another firm that has the reach and would need the business (as LCI still does, as its financials should show). As Elite is a business that operates on a cost strategy rather than differentiation, costs need to be controlled and Nasrat has clearly done that.
Nonsense...
He is planning his moves. The discussion about getting approvals for doing their own distribution telegraphs his longer term intention. I am willing to be Nasrat will pull the trigger on a new approach before LCI even gets around to figuring it out. As someone who has looked at LCI, they are the company that appears mismanaged...and loaded with debt and losing money Q-Q.
Sure, I am kidding and this is not accurate...
? The hedge funds and market makers who engage in widespread illegal naked shorting have been perpetrating this scheme for nearly three decades and have honed their skills to the point that they make Swiss cheese out of laws on illegal naked shorting by sculpting incredibly sophisticated strategies to avoid detection.
? The data that is needed to determine the extent of illegal naked shorting is held in non-transparent, proprietary data bases lodged with the Prime Brokers and DTCC (owned by Prime Brokers) who tightly guard and block access to this data.
? The illegal trades are done in a Wall Street that is now dominated by high frequency and algorithmic directed computer trading and is conducted often in dark pools in which trades are not reported publicly. Much illegality can be and is conducted in this shady environment. We outsiders can have no idea as to what is going on, nor apparently does the SEC.
? Illegal naked short selling allows hedge funds acting in concert to flood the market with phantom or counterfeit sales of a targeted company’s shares. They can sell an unlimited number of phantom or counterfeit shares to overwhelm natural buying interest in a stock. The object of this manipulation scheme is to drive the stock price down allowing the short seller to cover at much lower prices. The Holy Grail is to drive a company into bankruptcy and never have to cover. The hedge fund, Prime Broker/ DTCC collaboration has devised many strategies for illegal naked shorting.
Just another example of the effort to manipulate the share price...
Also, if you notice a large amount of volume before the end of the day, or right at the bell…some of that volume is the shorts covering their position so they don’t increase the overall short interest and draw the attention of investors/short squeezers or regulators.
Repetition is the mother's milk of learning...
Yeah but they own their own building now. Nasrat told us, several times.
What is going on here ?
I tend to believe a CFO when no one has brought this nonsense to the attention of the federal law enforcement authorities. On that I would conclude...still nothing alleged and, since the "crime" has a 7 year statute of limitations, the clock is ticking if anyone has evidence they want to submit to the SEC who will then get the FBI involved, as they handle such investigations.
The law offers to pay whistleblowers a monetary reward if they: 1) Provide original information that the SEC does not already know, 2) give tips that result in monetary sanctions that exceed $1 million, and 3) offers knowledge that lets the SEC carry out enforcement action successfully
Please...While a valuation does provide an assessment of future value, it is prospective and would not have captured a number of Elite's assets today. Things like patents, buildings, equipment, product portfolio, and, should we forget retained cash and cash flow? I think not. Also, the valuation was done at the end of 2013. SOX did not get the CRL until July 2016. Its impact on that valuation would have been limited because it was in its early stages and one must consider the mortality rate of NDAs.
As for a cost to a buyer, the reality is a buyer would do the same thing I spoke of when determining the valuation of Elite. I am just saying what happens and offer some grounded numbers. They are fact based, but I have yet to see any numbers offered in rebuttal that extend beyond opinions.
Check the June 2018 CC...about it here is what I said...
As for a ratchet...The CFO (Carter Ward) said that is untrue. Should he be lying or even misinformed he would be subject to criminal sanctions. Since there is no reason to believe otherwise, please provide a factual explanation as to what is meant by the alleged ratchet and how it would be executed.
The CFO was clear that there is no toxic ratchet and if the CFO made a claim that was in error, he would be violating federal laws and could be prosecuted (as it would be a crime of general intent, which does not require conscious intent; just doing it is a violation). So, I tend to believe a CFO when no one has brought this nonsense to the attention of the federal law enforcement authorities.
Stick with what I wrote...focusing on market cap is a trap.
What does the valuation provide when considering the O/S? That answer is yes. But let's be clear, my DCF does not say that and it is because a DCF is a point in time analysis. From my experience, the consulting companies that do valuation analyses use sophisticated algorithms that extend beyond DCF, so they capture more of a company's value. For example, a DCF does not take into account the assets Elite holds (patents, building, equipment) but the analysis by a third party does and that is why we can believe a third party analysis and, frankly, why the SEC does as well.
So, coming back around...I have more faith in a third party valuation analysis than I do a DCF, even if I do it.
We have been through this nonsense about Elite multiple times. Ratchet, Ratchet, Ratchet, Frankfurt listing, Frankfurt listing, Frankfurt listing, blah, blah, blah...
Here is what I wrote and this should provide substantial insight. Perhaps keeping this on hand will help with further questions about Elite's valuation being more than the paltry four cents (or 3.7, but it will go up today, just watch). Here is what should be known because it is factual and math based...and it was based on December 2021 outstanding shares. I am busy and will not update the numbers to the following, but anyone else can...
Okay, let’s return to the valuation using the 2013 mid-point of $2.10…With the diluted shares outstanding of 1,011,281,988 (in December 2021), let's do a little math…
The diluted outstanding share count in 2013 was 494,811,263. If we take that and divide it by the current diluted outstanding share count of 1,011,281,988 (again, December 2021) = 0.489 or 49%. What is 49% of $2.10? It is $1.03. That means, based on the current diluted share count and holding steady the old valuation midpoint of $2.10, Elite’s shares would be valued at $1.03…TODAY! NO argument about the math. This is a correct valuation based on the poison pill.
Those are the facts and repeating that the valuation was fake is nonsense, as the poison pill had to be based on EVIDENCE of a valuation by a third party, otherwise not only would the SEC not have accepted it, they could have charged Elite with a violation of SEC law and since that did not happen, the evidence is clear that a valuation was done.
Yes, and so can anyone who does some research on Elite. You might even find a post or two from me on IHUB about how, if we accept that Elite had to do a valuation analysis to put a poison pill in place, even adjusting for dilution, Elite's worth is substantially more and, with achievement of profitability, even more so.
One of my expectations is that when the poison pill expires in October 2023, if the share price remains low, Elite will do another one because the folks who have the manipulators working for them will likely try a leveraged buyout; although that would have to be approved by shareholders. However, here is the issue with that...How many stock holders want to alleviate their sunk costs and be willing to bail with a couple of pennies profit?
Due to both raiders and traders, a poison pill will be put in place and, if they listen to me, they will only announce a mid-point share price, if at all; unlike the stupidity of the full range last time.
Eagle25, thanks for the response and the suggestion about the book. You make an interesting observation about why we shareholders are in the dark and, unfortunately, often blame the companies, when their hands are tied, and the vagaries for approval remain.
Dude, good to see you here. Much to learn, dig in, and consider the serious opportunity...now!
NASDAQ2020 come back!!!! LOL
A large part of the reason BP spends heavily on advertising, beside the fact they can, is because, courtesy of the Clinton Administration, we have direct to consumer marketing that is not allowed in the EU (as I mentioned in a previous post). It is why smaller companies struggle to compete with marketing/advertising.
This was most obvious in one of the most insidious examples in pharma history. Purdue Pharma's marketing included supporting various doctors to push their opioids as not addictive...that is right...NOT addictive as opposed to those of others. Why? Because Purdue claimed they had an abuse deterrent mechanism that prevented dose dumping. As if an opioid was not addictive. Yet, if the FDA was paying attention, the data showed Purdue's deterrent was not as long lasting as claimed. Purdue filed Chp 7 and continues to pay fines and settlements, as do their owners (it is private). Yet, Sackett family still pocketed billions. The FDA? They drank the kool-aid.
Precisely...
Worse than that...IT IS DOWN 15% SINCE THE Q ANNOUNCING INCREASING REVENUES AND CONTINUED PROFITABILITY!
From a statistical perspective, as it relates to correlations, Elite's share price adjusted for dilution was better when it was near BK than when profitable. If correlations matter, they should change course!
As the above should show, the logic is upside down...kind of like an inverted yield curve!
Bill Belichick was a loser for many years until he was not...Nasrat is Elite's investors Dollar Bill!
There is a failure to understand how, in three years, Nasrat strategically pivoted from a reliance on pain meds to other meds that have increased revenues 4.3X, resulting in profitability and preventing BK; they also got a big boy business loan, bought a building and, in so doing, saved the company significant amounts of money, and he is moving new product development forward, all without further diluting shareholders! The sum of all those things, irrespective of all the noise, does not suggest or infer effectiveness...it is evidence of management effectiveness and that Nasrat has effectively shepherded the business. Yes, he stands the most to lose and to gain, that is why he will not lose and neither will shareholders who hold on to their shares like a winning lottery ticket. Anyone can pick at things, but such is the case with all companies and management. Like sport teams, company outsiders are certain they could manage better. That is an illusion!
I am done responding, I have things to do.
As an investor, my concern is business development. Irrespective of the p/s, Elite is growing the business. So, it relates to "opportunity costs". Here it is what to consider...
In microeconomic theory, opportunity costs represent the potential benefits that an individual, investor, or business misses out on when choosing one alternative over another.
Wrong...traders care about the stock price and obsess over its daily ups and downs. Investors care about business development because that is what management is responsible for achieving. And Elite has achieved it. No CEO, no research about CEO performance, says a CEO can control the share price other than by business success. FULL STOP!
To that end, Elite has achieved growth and profitability. Unless none of that matters any longer, despite being on the OTC, at some point investors will see their persistence win out. Either hold or not, is a decision for every shareholder.
One more point...many buyers of Elite stock got in and thought they would achieve a windfall with SOX and now are stuck, because...? Fill in the blank.
On this...
Yes, agree that Brexit affected UK to EMA coordination,
As to Europe, selective analysis of major European jurisdictions in the field of patent law – Germany, France and the UK (yes, I know they are no longer in the EU) – proves the existence of diversity between the institutional elements of competent patent courts in these countries, such as centralized (France) vs decentralized court systems (the UK), also general legal (France) vs specialized patent expertise of the judges, separation of infringement and validity issues (Germany) vs single treatment of these issues (France and the UK).
Analysis of cases litigated in Europe in the cross-border context also proves that in addition to institutional differences there are substantive patent law challenges, such as infringement by equivalent, obviousness, and general knowledge. The latter include a number of pharma challenges where the challenger won, as patents are often understood and treated differently by the individual national courts and judges. In simple terms, the same patent can be held valid in one European state and be invalidated in another.
The EU reimbursement does not always mean full cost coverage as most governments control market access and/or pricing of pharmaceuticals using direct price control, indirect price control, utilization control, or a mix of all these methods. Further, almost all the European countries employ reference pricing by using the prices of a pharmaceutical product in one or several countries in order to derive a benchmark (reference price) for the purposes of setting or negotiating the price of the product in a given country. Another barrier for EU drug market success is direct-to-consumer advertising, which is not allowed in the EU.
Thanks for the response. As UK/EU working in lockstep, I get it. The FDA letting someone else complete the inspection and accepting it, well...I will bow to the possibility that oncology is a different area. It would certainly make things less complicated. Please let me/us know what you find out.
Good point and you might be correct, I know it is true with Israel. Here is what they say about Project Orbis, but it is not an absolute acceptance...
The FDA Oncology Center of Excellence (OCE) initiated Project Orbis in May 2019 to provide a framework for concurrent submission and review of oncology products among international partners.
Collaboration among international regulators may allow patients with cancer to receive earlier access to products in other countries where there may be significant delays in regulatory submissions, regardless of whether the product has received FDA approval. Pivotal clinical trials in oncology are commonly conducted internationally and these global trials are increasingly important for investigating the safety and effectiveness of cancer drugs for approval in the United States. Future drug development may benefit by establishing a greater uniformity of new global standards of treatment, leading to the optimal design of these important trials.
Since its inception, Project Orbis has received many oncology marketing applications and led to the approval of numerous oncology drugs for patients across the world.
Based on what I know from watching the industry, the FDA must approve a manufacturing facility for a drug approved for sale in the US; whether manufactured in the US or ex-US.
April 6, 2018 The FDA issued Dr. Reddy’s a Form 483 after an inspection of its Medak, Telengana facility in India determined it did not establish quality agreements with material suppliers and failed to complete multiple CAPAs in a timely manner, among other violations.
After a hiatus of two years (due to the pandemic), the US Food and Drug Administration resumed its onsite inspections of drug manufacturing units outside its borders – including China and India. It has been following this practice to make sure that all the medicines which enter into the country follow the set standards.
Right and I have no proof the sun will rise in the East...
Let me suggest, in a blinding flash of the obvious, this is evidence of Elite's p/s being manipulated!
While my exposure to NWBO management is admittedly limited, if I learned anything in that very demanding Fortune 50 environment I worked, it was that long term decisions need to be made to grow the business, irrespective of what happens with the share price. Strategy does not play to the audience, its goal is business growth.
One other thing I learned was that neither analysts nor investors were privy to the key decisions that are made and, consequently, cannot know them until events unfold. One of the more humorous things we did at meetings was laugh (albeit politely) at some prognostication made that was disconnected to what we were doing.
Even by accident, NWBO management, like the blind squirrel, will find the acorn it needs to survive and thrive.
Every time I hear this nonsense of bringing the p/s down, I equivocate between feeling nauseated and doing an eye-roll.
Buy or not, but investors want Elite's p/s to increase. PERIOD!
Sometimes I cannot help myself and want to remind those in the deep end of the pool that it requires certain swimming skills...so...
Running a "shell game" with the 'did/didn't blind' is getting old. It seems that many real investors keep pointing out which shell the pea is under and, yet, we are subject to another effort and, while I do understand the reason for the persistence, it still rankles.
Remind me...What is it that is said about doing the same thing over and over and expecting a different result?
Wrong...
You act like our troubles with the stock price are recent.
Clearly, the data is in. NWBO's science folks have taken the checkered flag, that means any outside science expertise is no longer needed. Now it will be the business people and decisions at the forefront. Sometimes better late is never!
Sorry, but doing a DCF is not a complex analysis that requires a statistician. This is exactly why Elite investors should welcome any and all DCF analyses. Why? Because, as any statistician would say, we would get a regression to the mean and arrive at something we can all agree on. That would be some mean regression...LOL!
bio, it is not my style to merely say...Nice post! Though it was. Rather, it is to offer an observation and, in this instance, it relates to this point about commercial manufacturing...
It is such an incredibly important part of their marketing application and absolutely a central annex necessary for inclusion before any application for marketing can be evaluated.
And I knew you knew :)