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VPHM:
One reason why I have invested pretty heavily in VPHM is that I was surprised to see a microcap biotech or pharmaceutical stock even mentioned (thanks, MSGI) on a value investing board, let alone one that actually fits the criteria. I am new here but would be interested if there are any other biotech stocks on SKILLZ1's list; I have not seen any others discussed. In my experience, most small biotechs don't have any E, and I know of none that has a single digit forward PE.
While VPHM can withstand scrutiny as a value play, there will be news about its development pipeline before the end of the year, including phase 1b results for an early stage drug to treat hepatitis C virus called HCV-796, a drug for which the company appears to have high hopes.
And, for the "to da moon" crowd, in the fall Schering Plough is expected to make an announcement about its future plans, if any, for Pleconaril. VPHM once traded near $100 per share because it had developed a compound that showed promise as a cure for the common cold; that compound -- taken orally -- had serious side effects, the FDA turned thumbs down, and the stock sank like a stone. Pleconaril is the name for the intranasal variant, thought to have a much better side effect profile. VPHM sold all ownership rights to Schering Plough, but is contractually entitled to certain progress payments (up to $65 million), and to a high single digit royalty if it is ever marketed. FWIW linked below is an article that, without mentioning Pleconaril by name, is somewhat promising about the science.
http://news.yahoo.com/s/space/20050526/sc_space/nocureforcommoncoldbutawiggleintherightdirection
I mention all this to state what is probably obvious. If/as this stock takes off, it is likely to be attractive to investors/funds that are not wedded to value investing concepts. And if the pipeline news is good, and sales of Vancocin are anything like the "conservative" guidance given by the company, I think that in 2005 the stock might achieve and sustain a price well north of anything remotely justifiable from a value perspective. For value investors, a truly difficult sell decision.
I have probably posted too much about this one. I am not trying to pump it; quite the contrary. Bobwin mentioned in a post that he has been burned in the past by biotech; I have third degree biotech scars myself.
Steve
Joeiniowa re IPII:
I bought IPII pre-split at split adjusted $6 and sold 3 months later shortly after NASDAQ listing for $8. Thought I was pretty smart.
Could not believe Q1 earnings numbers, and have watched the stock go up $3+, while massaging ego.
Bought back in today at $11.90. On the few occasions when I've done this in the past, it has been a mistake. Hope this time it's different.
Steve
VPHM:
Another insider buy, albeit modest, on 5/26 at $3.77 and $3.90.
Steve
MSGI re VPHM:
Nice to see a close above $4.00.
Steve
MSGI re VPHM:
Great start today -- up about 9% on significant volume.
Steve
OT -- The Microcap Kitchen
rrufff:
Thanks. I will check it out tonight.
Steve
OT -- rrufff
I know that SI is Silicon Investor. What is TMK board?
TIA.
Steve
MSGI re AMRE:
Concerned that this is all smoke and mirrors. On the other hand, if NAUC is a business and not just a business plan . . .
I may stick my toe in the water again tomorrow.
Thanks for your thoughts.
Steve
MSGI re AMRE:
I was in and out of this yesterday in a modest way. Have been expecting NAUC to sell off, but it seems to be holding up well. Do you think retracement in AMRE is about done?
TIA
Steve
avandalay05 re ERS:
FWIW:
I just sold remaining 30% for $8.00. But what do I know. It may have a lot further to go, and for those still in, I hope it runs "to da moon."
One thing I do believe: most of the people buying now do not know a thing about the company. And when the selling starts, it will be ugly. Maybe back to $6. Since I bought this stock only a week ago after reading about it on this board and reviewing the numbers, it is probably easier for me psychologically to "play it safe."
Good luck. It is a great little company, I think. But I liked it better at $6 than at $8.
Steve
Maybe I'll hope for $8.50!
ERS:
I have owned a couple of stocks that the IBD crowd took an interest in. It is all about momentum. And when they decide to exit it will be a stampede.
FWIW: I sold 70% early today at $6.75, and am holding remainder hoping for $8.00. But I am ready to bail at the first sign that the run is over.
Steve
News:
"ViroPharma Incorporated (NasdaqNM:VPHM - News) today announced the commencement of a Phase 1b proof of concept clinical study in hepatitis C positive patients with HCV-796, a novel antiviral compound that the company is co-developing with Wyeth Pharmaceuticals, a division of Wyeth (NYSE:WYE - News). HCV-796 is a potent orally dosed compound that has the potential to interfere with the replication of hepatitis C virus (HCV). Preclinical studies have shown that HCV-796 is the most potent of all anti-HCV compounds developed to date between the two companies."
More in PR.
VPHM:
News:
"ViroPharma Incorporated (NasdaqNM:VPHM - News) today announced the commencement of a Phase 1b proof of concept clinical study in hepatitis C positive patients with HCV-796, a novel antiviral compound that the company is co-developing with Wyeth Pharmaceuticals, a division of Wyeth (NYSE:WYE - News). HCV-796 is a potent orally dosed compound that has the potential to interfere with the replication of hepatitis C virus (HCV). Preclinical studies have shown that HCV-796 is the most potent of all anti-HCV compounds developed to date between the two companies."
There is more in PR.
Steve
re ERS:
Yahoo! Finance home page has article on 10 highest rated stocks under $10. ERS is #8.
Steve
cliffvb re VPHM:
My approximation of $1.00 per share in earnings for 2005 was real “back of the envelope” stuff, primarily because I think the company itself has been and continues to be (pleasantly) surprised by the performance to date of Vancocin. The company has only owned the product for 6 months, has raised the price twice already without any complaints or pushback, has confirmed that March sales were materially stronger than February sales, and stated on May 18 that its (significantly raised) guidance of May 3 was already looking “conservative.”
That said, the $1.00 per share number assumed that the latest guided range for net product sales did not take into account the recent 26% price increase for Vancocin. If this assumption is correct, and using the mid-ranges of the company’s recent guidance for sales and expenses, I get: $76.5 million sales, less $41.5 million expenses, plus about $15 million for the effect of the price increase, or about $50 net income. Using the diluted share count in the most recent 10-Q (i.e., about 52 million shares), you get $.96 EPS, which is what I meant by “about $1.00.”
Upon further reflection, it is quite possible that the latest guided range for sales did take into account the recent 26% price increase for Vancocin. If so, the rough math above leads to $.67 EPS.
In my own assessment of this stock, I have not attempted to be any more precise, because I don’t know how much reliance to place upon the company’s Vancocin guidance. It’s not a matter of distrust – from what I can tell the company is indeed trying to be “conservative.” It’s just that we are in the first inning here, and, while the company knows it must say something, I get the sense it’s not sure what to say.
But I do like all the insider buying, including the most recent (i.e., 5/19) director purchase at $3.76. It is hard not to like the stock at $3.88, given all of the above. Whether forward PE is 4, 6 or 8, I certainly agree with MSGI that it is unprecedented for a pharmaceutical company, especially one with $100 million market cap and, from what I can tell, an interesting pipeline in development over and above the drug providing a current revenue stream.
All IMHO and FWIW.
Steve
Bobwins and board re VPHM:
I should undoubtedly clarify an earlier post. I have not read anywhere that the company is guiding to $1 in earnings. It is simply my sense of what their guidance means, and I apologize if a post of mine was misleading. To be more accurate:
On March 10, the company's PR states:
"For the year 2005, ViroPharma expects the following:
- Net product sales: $62-$66 million, representing growth
of 15% to 22% over unaudited net product sales of Vancocin
in 2004;
- Total operating expenses: $46-$58 million, including:
-- Cost of Sales: $20-$24 million;
- Included in cost of sales is the royalty to Lilly,
which is expected to be between $9.0 million and
$10.5 million. There are no royalties payable on
net product sales below $44 million or above
$65 million.
-- Research and development expense: $16-$21 million;
-- Marketing, general and administrative expense:
$10-$13 million;
- Approximately $3 million of marketing, general
and administrative expense is expected to be
associated with the medical education program
for Vancocin.
- Cash balance: ViroPharma expects to be at least cash flow
neutral in 2005, with a cash balance at year end 2005 of
$45-$50 million."
On May 3, the company's PR revised this guidance in the following respects:
"For the year 2005, ViroPharma expects the following:
-- Net product sales: $74 to $79 million, representing growth of 37% to 46% over unaudited net product sales of Vancocin in 2004;
-- Total operating expenses: $38 to $47 million;
-- Cost of sales: $12 to $13 million;
-- Cash balance: ViroPharma expects to be cash flow positive from operating activities in 2005."
These are not small changes.
Frankly, my sense from the presentation yesterday was that the company is already beginning to see its guidance of May 3 as too conservative, but is reluctant to re-raise guidance 2 weeks later!
Again, sorry if I have misled.
Steve
MSGI re VPHM:
I listened to the presentation tonight. Certainly the CEO (De Rosen?) was pretty enthused about the company's prospects.
Unless I'm missing something, the company is guiding toward about $1 in earnings this year on Vancocin alone, guidance that is "conservative" (yes, their words) in the sense that they don't seem quite sure themselves how good the Vancocin story is going to get. De Rosen also sounded optimistic about the rest of the pipeline, especially HCV-796.
In an earlier message you noted: "My only concern is that they were filling the pipeline with Vancocin and it may not have been due to usage of that much Vancocin." Could you elaborate? I don't understand.
I have bought some shares already, but am tempted to take what for me would be a big position here. I'll be reading the 10K and 10Q fine print this weekend. Frankly, any cautionary thoughts would be appreciated, because right now I can't think of a reason not to jump in.
Thanks.
Steve
MSGI re VPHM:
Any reaction to the B of A presentation today?
TIA
Steve
cliffvb re ERS:
According to briefing.com, posted on Yahoo message board:
"17-May-05 14:49 ET In Play Empire Resources -- New High Profile (ERS) 5.20 +0.10 : Making a new 52-week high today is Empire Resources, a distributor of a wide range of semi-finished aluminum products to customers in the transportation, automotive, housing, appliance and packaging industries. Last night, the co reported another strong quarter with EPS of $0.23, more than double the $0.11 earned in the year ago period. Helping to keep costs low is that the co does not typically purchase inventory for stock; rather, it places orders with its suppliers based upon orders that it has received from its customers. This way the co avoids commodity price fluctuations and does not incur inventory costs. Investors are impressed with the steady EPS growth with results of $0.49, $0.37 and $0.23 the last three years. Also, if Q1 is an indication, the co is on track to beat last year's mark. There are no analyst ests, but even assuming flat yoy results the last 3 qtrs would be EPS of $0.61 for a p/e below 10x."
This and a dividend too.
Steve
MSGI re VPHM
After your prior posts I checked out the company enough to learn of recent earnings and and debt paydown, but for some reason did not look into insider trading history. Today's filing by the CEO, however, did get my attention, and I bought some more shares at $3.60.
I know next to nothing about technical analysis, but today's action sure looks like a breakout of some kind. May even see $4.00 before the close.
Thanks again. There is much to like about this story, and a lot of potential upside IMHO.
Steve'
MSGI re VPHM
Unless I am once again misreading an SEC Form 4, CEO purchased 28,500 shares in the open market on 5/12 at prices around $3.50. Probably explains early action in the stock this morning.
Thanks for posting about this stock. Things look very promising.
Steve
tmcal6 re IPII earnings:
It has always been my understanding that quarterly earnings for a company's first 3 quarters must be announced no later than 45 days from the end of the quarter, and that Q4 and year end earnings must be announced within 90 days. Thus, I have assumed that IPII (and many others, for that matter, including CTIG) must announce by tomorrow. Perhaps that understanding is incorrect.
Steve
Argyll re MMRK:
IMHO, no reason to sell here. News is excellent.
But dividend announcement created "expectation" of $.12 or $.13.
Steve
elohssa re PDGE:
You write: "But in the 10-K it looks like PDGE involvement with mold is training."
While there is mention of remediation training, the 10-K states the following:
"INDOOR AIR QUALITY / MICROBIAL REMEDIATION:
"Health professionals have been aware of the adverse health effects of exposure to mold for decades, but the issue has gained increased public awareness in recent years. Studies indicate that 50% of all homes contain mold and that the increase in asthma cases over the past 20 years can be linked to mold exposure.
"We provide mold remediation services in both commercial and residential structures. Such services include decontamination, application of biocides and sealant, removal of building systems (drywall, carpet, etc.), and disposal of building furnishings. We have experience in remediation, detailing methods and performing microbial (mold, fungus, etc.) abatement in commercial, residential, educational, medical and industrial facilities."
The 10-K also states re increase in revenue during FY 2005 from $36.0 million to $60.4 million:
"The increase was due . . . in part to increased revenues from mold remediation."
And the press release announcing FY 2005 earnings described PDGE's continued "successful diversification into the mold/restoration industry" and the licensing in late 2004 of "another technology that is a safe and chemical-free method to remediate mold, viruses and bacterial hazards."
Certainly my investment in PDGE is based upon the understanding that that the company is already significantly involved, and looking to increase its involvement, in the mold remediation business.
Steve
hweb2, re PDGE:
I agree completely that it is a terrific bargain. As I thought at $1.55, $1.50, $1.42, $1.40, and $1.38, purchasing all the way down. I can't afford too many more bargains like this one.
The Barrons overhang is undoubtedly a factor, whether or not they are actually selling.
Steve
yield, re MMRK:
I guess I was hoping for some extraordinary event.
I purchased some shares yesterday. Judging from the release the company put out in announcing its next dividend (i.e., that it is "retaining approximately half its earnings"), I would expect earnings in the range you indicated. Looks like there is more upside to go, and a 5% dividend while the story unfolds.
Thanks for the information and for posting about this stock.
Steve
Yielddude re MMRK:
Interesting company and stock. Earnings for Q3 2004 seem out of line with other recent quarters. Any particular reason?
TIA
Steve
OT: SSKILLZ1:
Thanks for your input. As noted, I don't know much about economics. That said, I still don't get it.
When oil prices rise, isn't the buying power of consumers simply reallocated into oil and away from other less valuable (or, to be more precise, less necessary) things? And just as some businesses will incur added costs (i.e., airline industry), won't businesses related to the oil industry enjoy added revenue? Aren't jobs (and, for that matter, IT and other spending) just shifted from one sector of the economy to another? With regard to the consumer who won't change his purchasing habits -- if the price of the high tech gadget doubles and oil stays the same, won't that hypothetical consumer still go deeper in debt? And with regard to the consumer willing to change his purchasing habits, when oil begins to cost more than it is "worth," won't that consumer find some way to buy less of it (hybrid cars, mass transit, whatever)? Why does "the economy" care if the consumer buys both oil and the high tech gadget, as opposed to just one of them?
Absent a value judgment of some kind, I still don't see how any of this is properly called a "tax" or a "drag on the economy." But I should probably find another board for these and like questions. Sorry to digress.
Steve
Bobwins and deathtotaxes:
Mass psychology must have something to do with it. Oil companies make "obscene" profits -- Microsoft just makes profits. Incidentally, CNBC feeds this, constantly referring to the "high" price of oil as a "tax" upon the economy.
I had my problems with college economics, and there is probably a dimension to all this that I am missing. But my intuitive reaction is comparable to Bobwins -- how does "the economy" care whether I buy oil or some useless hi-tech gadget of the moment?
Steve
SWTX, IIIN and IPII/IMPL:
Learned of SWTX on this board and decided to purchase 10k shares in early April, in part based upon what appear to be 2 decent-size open-market insider buys, one in late February, and one in early March. Pleasantly surprised by appreciation during the past two weeks, and sold half yesterday. Plan to watch action on Monday ahead of earnings to decide what to do with balance of shares. Given history of this company, it seems to me that earnings will have to be good -- which recent price action may be predicting -- to lift price above $2.00, particularly where something like 30%-35% of revenues are denominated in Euros. Turnaround in 2004 was aided by dollar weakness, especially during second half of the year, and Q1 2005 earnings will have the benefit of a weak dollar throughout the quarter.
Was in (and out of) IIIN and MUSA during 2004 and did very well. Decided that, if any $$ were left to be made based upon global steel demand (demand that, it seems to me, is likely to remain quite high), the $$ would go to the front end of the process -- iron ore and coking coal. So, I bought major mining companies (BHP, RIO, RTP), which, incidentally, have been hammered in recent weeks.
Purchased IPII/IMPL in December 2004, but sold after Q4 and year end earnings came out in late March. FWIW, I thought Q4 earnings were disappointing, was surprised that the stock held up as well as it did, and became concerned that the price of the stock was being held aloft by reverse split and prospect of NASDAQ listing. Liked the stock better at (split adjusted) $6 than $8.
Timing decent on above investments. Now PDGE, on the other hand . . . . .
Steve
PDGE -- Form 4
I misread the Form. It did not make sense to me either that it would be exercised, and posters on the Value Microcaps board have pointed out the error in my interpretation.
Sorry for the misinformation.
Steve
Guy:
I am new to microcaps and have much to learn about these kinds of financings (and SEC Form 4!). I gather there are still 950,000 cheap shares left to work through.
Thanks for the explanation. This is a great board.
Steve
cliffvb re PDGE:
It did not make sense to me either, and I appreciate the explanation. Looking back over earlier Form 4s the same notation appears.
Sorry for the misinformation.
Steve
PDGE -- SEC Form 4, 4/21/05 -- Second Warrant ($1.60)
It appears that on 4/20 Barrons Partners exercised its right to purchase the full 2,000,000 shares at $1.60 pursuant to the Second Warrant.
Steve
PDGE -- SEC Form 4, 4/21/05 -- Second Warrant ($1.60)
It appears that on 4/20 Barrons Partners exercised its right to purchase the full 2,000,000 shares at $1.60 pursuant to the Second Warrant.
Steve
SWTX -- A good sign, I think.
SWTX -- Earnings to be announced after the close on 5/2.