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Yes Samsa,
but using your numbers, those 20Mln of Revenue would be royalties = earnings for IPCI (without counting millions in cash from upfront payments and milestones)
With 28mln shares and a 20 P/E multiple you get a 14$ price per share.
So conservative means > 10$ per share, which is more than 5x current prices.
Right Angelo,
if we see a big name in the partnership, I think the future of IPCI (and ours as well) could change dramatically.
In 3 to 5 yrs....
Samsa,
you are right about the timing for company cash and approval letter.
That's why I'm always hoping (with huge frustration) on focalin's further approval and/or possibly another ANDA approval.
In this way we should get some revennue/cash which would give the company more room for negotiations and more buffer for possible FDA delays.
we are conservatively reasoning as if IPCI is a single pipeline company, and conservative it's ok for me...but they have several pending ANDAs and just one in the next weeks would change a lot for the share price.
thanks Doog !
My personal idea about the Focalin FDA mess, is that IPCI decided not to sue for "political" reasons: since they were and they still are positively and actively speaking with FDA on Rexista, it would probably be wrong for a small cap like IPCI to go against them (even if I think there would be room for legal actions).
I share your points on the complexity of the Agreement; I think the schema that Angelo has already outlined a couple of times on this board is what they should work on.
Multiple steps, with upfront payments based on deadlines, royalties based on volumes, and options on the future abuse deterrant patents and NDAs.
If Rexista is the elephant in the room, PODRAS is the mammut.
What seems to be really interesting for us is that IPCI is developing a technological Platform, which should attract some Big Pharma, taking us to a likely take over in 3-5yrs from now....at which price I really don't know.
Samsa,
I started my position in 2012 as well.
I'm still hoping for a Focalin "surprise" before Rexista filing, that would help to propel the share price. Would like to see IPCI based around 3 before Agreement.
I really would love to see a strategic partenrship for Rexista and all the abuse deterrant technology signed with a big player, my favourite being Pfizer and Purdue.
next 6 months will be crucial.
Trenches, Samsa,
thanks for your dd and contributions to this board !
Samsa, Amigo,
my idea is that we had a change in the market consideration about IPCI's management over the last 3-4 months and I believe this started to materialize after the keppra approval.
The management made 3 mistakes (JMO) and they are now paying the price:
1 - keppra approval pushed share price above 3$; confidence in IPCI was high at that time; then not having a plan for an approved drug (even if the drug is marginal in terms of potential revenue) was a bad sign
2 - (something Sprot Always mention): IPCI didn't inform the market about the deadline of the Agreement with TEVA regarding one of the ANDA. It became clear only during quarterly report that the deal was overdue. Bad communication is never good
3 - the worst (for me): very bad timing for the new share issuance
It's therefore clear to me that the management has now the responsability to regain market confidence, which I think (as someone else here) will be IF the Rexista partnership looks strong financially and strategically.
Having said that, the ANDAs strategy was initially good; just consider that they are waiting since 5yrs (5 years!!) for approvals; its beyond reasonable business risk assessment for any co.
FDA stating it will clear the backlog by year-end looks ridicolous to me...but would be fun to see what happen if by march 2017 we have all the pending ANDAs approved.
Last point: Rexista is the elephant in the room, but from now until december we should get positive developments on other products. Many here are considering IPCI like a single product biotech...which is NOT.
Samsa,
I think that it is mainly due to companies' market cap.
EGLT has now a 176Mln mkt cap while COLL almost 280Mln.
Looking at the chart they were even much higher in 2015.
IPCI is just above 50Mln and it is very unlikely for a fund to consider companies below 100Mln of mkt cap (which means at least 3.5$ per share at current shares count)
JMHO
Tek, you didn't reply on my last post about valuations...
I share some of your considerations, but I am more aggressive on the share price effect coming from an upfront payment.
You said maybe we get over 3; an upfront payment will come with a more comprehensive Agreement, therefore giving a more precise idea of future cash income.
Anyway, a 50mln upfront would mean almost 2$ per share of cash...therefore I think that predicting a price around 3$ it is very conservative.
An important point is HOW we arrive at that point (Agreement announcement); if we are at 1$ or less, than I agree with your 3$ or little above. Another story if we arrive there and we are above 2$.
Also consider that short squeeze coming once it becomes clear the company's future is changing
I'm not saying we fly.
Hei Tek,
I'm not sure about your estimations, but anyone fell free to correct me if I'm wrong in what I'm writing here down. I get a value that is double yours.
If you start from revenue/sales, you can try to determine EPS (and some suggestion on how to possibly arrive there have been proposed in this board), then you go for a P/E multiple . you should try in a range between an iper-conservative 12 and an aggressive 25.
So let's use your ipotetical 300Mln of revenue for 2017: let's say that we arrive at 50mln of Net earnings from that (16% of revenue = net income margin).
now with a p/e of 12 (and this is conservative for a growth company)and 28.6mln shares we get
eps = 50Mln/28.6mln = 1.74
for a p/e of 12 you need a price per share of 1.74 x 12 = 20.9pps
so reversing your reasing, for a 10 dollar target you would need a 150Mln revenue.
with 900Mln of revenue, and 16% net income margin (144mln of earnings), 12 p/e : 60pps
I repeat myself: I can be wrong in the above calculation; more than happy to hear what Others think about it.
Samsa I was referrring to the post #16628 of Angelo and the following @ 16629 in reply.
Apparently there was an Agreement about the first 6 ANDAs to be filed (Keppra was indeed the 7th and not partnered).
That's it. would be more than happy to have more info on this (maybe the Agreement had validity deadline ?)
Really like the contributions made to the board during the last days
On Par website the following is shown in the home page
"Par Pharmaceutical is part of Endo International plc – a global specialty pharmaceutical company improving lives, creating value."
therefore the merger is now effective.
I couldn't find any evidence of Par still having an equity interest in IPCI; anyway 4% in 2007 should be less now (how many outstanding shares were in 2007 ?). If the partnership for the ANDAs still valid, then the time to market after approval should be fast.
From the last calculations and projections some of you posted in this board, I think that we can consider a conservative/realistic valutaion of 11.50-21 usd per share in 12 months from now, taking into account rexista and current 2 strenghts of focalin only and, if a I read correctly, wihout milestone and/or upfront payments (just royalties).
agreed...and whether or not FDA is going to approve Others Focalin strenghts (it's been more than a year now or so)
You can be right,
but remember that IPCI is not a single drug company, it is a really small co. (and therfore made some mistakes along the road) but has a lot of potential.
It's true that generics in the pipeline are small deals compared to the NDAs, but if FDA decides that 5 years of waiting its enough to get an approval, then we should start see some nice additional and increasing revenue (as approvals start to come) to sustain the development of the much more lucrative drugs.
This point is crucial: just FDA action on generics ! and the stock will greatly benefit in the coming months...
IPCI could become profitable just with the generics royalties, (but it's in the FDA hands)...Rexista and Poddras will then push to price much much higher then 6-8 $.
Let's wait and see what kind of partnership will come out for Rexista (I would strongly vote for a Purdue mega-deal on all the opioids Platform)
it seems reasonable.
would be helpful in the meantime to receive the focalin residual strenghts approval..just to count con 2-3 more mlns of yearly revenue.
then filing, then partnership agreement, then Seroquel...
then ..happy Xmas
Sorry, just my list of wishes....or not
This step would probably accelerate partnership discussion; now potential partners do know that Rexista seems to have room for a very good position in the competitive landscape.
FDA looks like is on our side with the Rexista story...or at least not against us like for Focalin and other generics.
Are u saying you are acting on some privileged info given you directly by the CFO?
It's illegal by definition and what you are doing is against SEC-Rules. Pay attention
Pitty i can't put it over here, because that would be
1/against SEC-Rules
2/a violation off privacy laws
I think that the keppra approval without being followed by a partnership to sell it (even if honestly with very low revenue expectation) and the wrong timing in the new shares issue casued to market players to totally loose confidence in the company.
Shorters didn't cover and they are now in control. Only FDA news could change dramatically this environment.
Remember we hit 3 with keppra news and market expectations on following developments.
Hei Sprot,
we should meet one day
1.40 was touched in 2009...should be a strong support...hopefully
that makes sense. in this case we are going to see an enormous pressure on the downside.
This would also mean that the subriber is not a potential partner, but just a financial player.
just trying to understand. didn't change my mind about the big picture.
going down this way in this moment sound like irrational (to say the least) or due to some bad news leaking
Don't like the price action...selling pressure is too strong, considering avg volumes before the drop below 1,90 e moreover considering the new shares issue just closed
Any idea of why shares beahving this weak on relatively high volumes ?
Are new shares (besides the announced and closed Offering) being issued at the market.
Don't understand where the selling pressure is coming form, given that the cash issued is now solved at least until year end.
Hope is that the next short interest data will show a big reduction in the shorts.
Also very currious to see if we get an indication of who has subscribed the new shares (and warrants).
This is probably your worst message on this board.
Being happy for others being on a loss...
I frankly don't care whether you are right, wrong or whatever about IPCI management. You are just behaving in a disgusting way.
Good luck
Seems that the some new shares have been issued at 1.61 and warrants with strike at 1.95.
Just read on Google finance.
Now cash is no more an issue
Doog I dont know what to think. They have been frugal until now, so why issuing at this moment?? The timing is awful you have to admit it....unless they are selling the shares to a partner. But even in this case the timing is wrong. And you know I'm in Big and long
Unless new shares are for partnership ipci shares will be disintegrated. The odidis will be put in minority and company tookover for cheap and then delisted.
Would be a perfect plan for a big pharma which doesnt want to pay big money for the technology.
Think about it.
I'm loosing big with today but what I fear the most is the management which seems to behave like if ipci wasnt listed...and this could be suicidal.
Sad
Doog,
how are split the Focalin revenue in terms of amount and dates ?
Do you think IPCI is eventually counting on this cash to cover the period until NDA submission ?
Hei Sprot,
once it touches 1.50 are you going to short it more ? Which is your final target: 1.00 ?
Knowing that all we in this IPCI are long and keep on writing about how you are happy when the stock goes down, tells a lot about the kind of person you are or the way you want to appear.
Enjoy for song !
I'm happy for you, and you just confirmed that you and some other traders you are in group with, are shorting this stock.
Lokking at the volumes and bid/ask of the last weeks is just retail shorting.
And regarding possible overnight turnaround (in case of big news relased at markets closed): if it happens before your 1.50 target and you are catch on a short position....
...then you are out of business, I don't think as you said you are going to make money if Tomorrow opens at 5.50....you are SHORT, not LONG. That's fine with me, but don't come to say you are making a lot of money if it jumps overnight...please.
just wanted to say that Odidis are not going to pay any dividend before the company has completed its journey to success.
Didn't mean to say that the can't, just that they won't. JMHO
I think that IPCI won't pay a dividend before having both NDA candidates already approved and in the market.
Biotech companies don't pay dividends, you can sell a portion of your stake and get the equivalent of a special dividend.
JMHO
I strongly agree, Yesterday I tried to make some calculation in order to get an idea of the potential valuation the company could have in 3yrs from now.
But I believe that Rexista filing + an important partnership + definitive approval on Rexista at the beginning of 2017 will put the share price at around 15. (just consider what an upfront payment of 75Mln would mean...3$ per share in cash = earnings)
We have to be strong during this period...shorters and the market maker will try hard
and again you look happy for the stock going down... are you sure that you are not one of those who are shorting ?
if it goes below 1.70 I will add much more.
hope you are not on a multiday short position, begging for your 1.50....which could become instead a 5.50 overnight
I try to propose my numbers, hoping to get more comments e advise on the the discussion Biotech started.
Feel free to correct me if you believe I made wrong assumptions or calculations.
I would use a 5% market capture, but I don't think it's correct to use the sales you get as earnings (as you Biotech did)and then to get eps once you divide by total n of shares.
Of that sales amount you should consider a percentage as earnings (royalties to IPCI) since Intelli has no sales force or network.
Therefore if you consider for instance a low double digit for royalties (12%) then you get 74MLn of earnings.
Then I would use 30Mln of shares (consider the Odidis frugality in issuing new shares) = 2.48 eps.
At this point I would use the market average p/e as reference (14) and go for a conservative 8, which leads to a near 20$ per share valuation.
But there is another big factor, which are the front and milestones payment in cash, usually in the structure product partnership; and that’s the hard part to estimate, but I would look for a conservative total of 250Mln cash (considering ALL the products in the pipeline), which divided by 30/mln shares leads to further 8.3 of earnings per share. Multiply it for the conservative 8 used above and you get a 65$ (conservatively rounded).
85usd per shares
OK, so I think they are betting/hoping/praying for the FDA to approve shortly.
I will join their prayers.