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By diluting to 1B shares Nasrat is basically selling 10% of the company for $10M. If he goes that route he is desperate beyond measure. There is no logical reason why he would do this unless he holds little value in the near term success, liquidity & value creation.
This isn't sideways. This has been a slow drain in share price.
I'm not sure which I'd prefer. Buyout would be nice, but usually leaves value on the table. Licensing is a long-term play, but ignores future competition could encroach.
I think they will net less than that. I am assuming 30% mfg margin + 10% on sales. My 10% is aggressive. I think it will be closer to upper single digits (whoever their partner is).
Based on a guestimated pricing and 100% revenue going to Elite, which is far from accurate. Seems fiction continues to grow as price drops lower like a fish tale.
The lower PPS is somewhat surprising as I believed it is caused my further dilution as we near the end of the LPC dilutive deal. The question becomes whether the deal gets extended or not.
Unless you count the non ADF market? That is 100% of the market today. Not even a logical assumption to exclude non ADF.
They are also CFP without SG&A. Let's not kid ourselves. CFP without R&D isn't CFP.
Recently created THC doesn't provide euphoric effect. It is labeled as class one with THC in general, but won't be for long. You'll see.
Might want to read a little more into the latest capabilities as it isn't smoked and has no euphoric impact. Although I don't see it fully impacting opiates for a few years, but you never know how the new administration will act. Playing the "ignorance is bliss" card only works for so long.
Yes, 2018 would be timing for SequestOx. However, we will see any favorable reaction from Elite and/or Puracap within the next few months depending how study results turn out. We are also waiting on 2 ANDA FDA responses this year that could be as early as 1H 2017. If those by chance get rejected or delayed for additional requirements, Nasrat's goose is cooked.
I believe CEO understands the urgency. IMO if he didn't understand the competitive landscape he would be taking on less risk by waiting for one FDA approval to fund the next NDA/ANDA's trials, and repeat the process. However, in going this route there are more risks and more hiccups as we've already seen. 2017 can be exciting year for the company, but depending on FDA responses, it may just be another year of delays. Hoping that isn't the case, but you can't ignore the fact it's what we've experienced so far. I'd like this to be the watershed moment for Elite, the year our tech is validated.
I am glad you brought this up. I forgot about the advances in the THC oils without the side effects of recreational marijuana. I have seen news reports for those that have Parkinson's & other related kinetic challenges and within a few minutes the results are amazing, but still causes extreme drowsiness. The strides are exciting as I can see this extending to pain too. I see this as much farther off than SequestOx. In the end, one product isn't going to rule the pain market. We are all biologically different and need different options.
I have family that works for a biotech that based on DNA makeup they can tell schizo patients the best drug for them out of the 20. Removes trial/error and serious side effects. The world is quickly moving towards personalized medicine. What an amazing time in which to live - to see these advances, Elite holding one of many.
I am interested in your thoughts. How so?
End of June at next cc would be better date to compare. Will have 2 new filings, potential Perc ANDA approval & SO update by then. If the stars align, Elite can will finally start to gain leverage for negotiations.
Yes and no. The market is forward looking until trust is broke. Then the company has to prove it has real potential and the stock will rise. If investors don't buy the management hype the stock stays flat at best which means if NDA or ANDA approval does happen intrinsic value may be immediately realized with a loud BOOM in stock price rocketing north.
Every company uses timing or weather to cover up poor performance.
Only because they claimed they were ADT & FDA agreed. Nothing more, nothing less. Nasrat stated this on a prior cc. Any statement claiming approval or FDA stuffing Elite is baseless trash.
I know very well. That is why the cash balance is increasing. Love how there is a partial picture described here.
How much did they get from dilution & selling NOL's?
That is incorrect. Hamburg and FDA didn't approve anything. She permitted the continuance of the application process.
I completely understand the timing of inventory. What you are missing is failing to connect the dots. They have had "timing" excuses 2 quarters in a row for explaining their poor revenues. That is an issue.
Logic says to have more cash from revenues coming in each week/month is that sales need to be increasing month to month. Simply not happening. To see the wording they had to use in comparing to LY of 6% growth is weak, at best. Cash isn't increasing from operations.
We have no idea whether the additional requirements were due to data concerns presented during any of the trials. It took plenty long for us to find out about the Tmax concerns well after management knew that blew up in their face with the CRL.
I may be misremembering, but since Pfizer beat us to the punch our branded was demoted to a generic option that is pushed out a few years due to exclusivity whether or not Troxyca actually launches or not. That was originally 201. I will look back at notes this weekend.
I thought generic Troxyca was ELI-201 that will be filed, but not approved for a few years due to Pfizer filing first? Perhaps I need to review my old notes.
Definitely a good & much needed add to the company. The aspect that I've been reflecting on is the facility expansion that I believe drove the higher COGS absorption. Being strapped for R&D cash, no CFO (I could be wrong here as CFO isn't cream of crop) would risk liquidity by investing in a $800k facility expansion without near term benefits. This gives me great confidence in ANDA submissions from last year. I can't imagine expansion would be for 2 small generics transferring back to Elite from Epic.
Here is a direct quote from Q4 2016 transcript:
"As I said before I do not prefer having a reverse split, but if we have to, that will do. We are at least a year away from that decision and we will discuss it in future calls".
This was in Feb 2016. Just so you are aware we are now at that "one year away" mark and our CEO is getting pretty fed up with the OTC. Just sayin
He can, but that is an awful lot of dilution for $10M. I don't think he would dare dilute that much, but I've been wrong before with this company. Remember the FDA can't stop us. They can only delay us...and delay us...and delay us again...and again...and yet again...
All fine and dandy until you run out of options for cash and have no serious partnership. Yep.
So you are saying without SequestOx we don't have a company to market. Then why would we move forward and invest millions in R&D for other products using the same tech? If on that premise partners and investors can't be made, the cart is getting put before the horse down an unproven path.
I don't think he will max out LPC at these rates. I could be wrong. It causes more dilution than he'd like. The question becomes how much R&D do we do in Q4 outside of SequestOx to buy us more time & cash. Cash burn now dilutes future benefit. I don't think he'd do another LPC deal, but his back is against the wall until something gets approved. Timing for LPC end date makes decision little harder.
I don't think he will max out LPC at these rates. I could be wrong. It causes more dilution than he'd like. The question becomes how much R&D do we do in Q4 outside of SequestOx to buy us more time & cash. Cash burn now dilutes future benefit. I don't think he'd do another LPC deal, but his back is against the wall until something gets approved. Timing for LPC end date makes decision little harder.
Go read prior scripts. It is public info. He said the decision is at least one year out - was stated one year ago so nearing timeframe for decision, but much as changed from their plans since then.
CEO previously stated he intends to max out LPC agreement, but was before share price was this depressed. If maxed out would net around $10M. Reverse split is already on the table as an option to get to NASDAQ. Will be interesting to see how creative CEO will be or if he'll just turn on the dilution spigot. He must understand the float is killing the share price.
A few years ago he stated once we get some solid proof in our hands is when self promotion would start. He has only shot himself in the foot here, by not getting word out, while being the largest investor.
Well for one the generic pipeline stopped growing sequentially on a quarterly basis 6 months ago, which means there is little to fund R&D.
I will relisten to the call as the script doesn't pick everything up correctly. I thought he used future tense as in the 2-month studies will start this quarter. In addition to his other commentary I interpreted this as calendar, not fiscal 2017.
I agree with some of your points, but don't put words in my mouth. I said cc was ok. I don't consider it "solid". Far too much uncertainty still with some huge hurdles still ahead.
$0.50 is highly unrealistic by summer. I could see us getting to 0.20's IF we get ANDA approved AND sales start actually taking place. Having an approved drug is good. Having sales in crowded markets is another. Situation will also depend on new SequestOx formulation outcome. If Puracap moves forward with a deal it is a good sign, not for sure a done deal w/ FDA (nothing is), but very positive for sure to help get pipeline cooking.
My honest fear is that any upfront payment(s) we receive will fund part of R&D. ANDA sales will take a while to ramp. I worry ramp will be too slow to keep funding at pace that we may be going down, bottlenecking the pipeline.
This cc was ok. Looking back 2015 was a setup year for SequestOx. Then it moved to 2016 & now 2018. Good thing out of the continual delays is that Elite is setting up for far more than just one drug. SequestOx is still the blockbuster, but now there is potentially much more coming on board later this year. And we sure as heck better have a sales & marketing agreement in place if/when an ANDA is approved.
In the end, I believe stock will be stuck for few months and start to move north in the summer and from there won't retreat.
*too
Lovely auto correct