Register for free to join our community of investors and share your ideas. You will also get access to streaming quotes, interactive charts, trades, portfolio, live options flow and more tools.
Register for free to join our community of investors and share your ideas. You will also get access to streaming quotes, interactive charts, trades, portfolio, live options flow and more tools.
Not ONLY was our revenue higher year over year(a new ALL-TIME Q2 record by the way)..........but it also costed LESS to produce those revenues.
So HIGHER revenues with LESS costs. Efficiency at it's FINEST.
The learning curve also is referred to as the experience curve, the cost curve, the efficiency curve, or the productivity curve. This is because the learning curve provides cost-benefit measurements and insight into all the above aspects of a company.
The idea behind this is that any employee, regardless of position, takes time to learn how to carry out a specific task or duty. The amount of time needed to produce the associated output is high. Then, as the task is repeated, the employee learns how to complete it quickly, and that reduces the amount of time needed for a unit of output.
As the saying goes...Success has many fathers but failure is an orphan!
Love it! However, it is worth noting that Lyft (Uber wanna be) has some agreements with delivering scripts to patients through an insurance program. In truth, that is what gave me the idea but Uber is, well, Uber and, therefore, funnier!
Okay, once more with feeling...
Of course going it alone would be impractical and costly. That will not happen. What Kirkov provides is the executive to act as a conduit for a different distribution mechanism. What does that mean?
In the model with LCI, it was up to LCI to develop the customers and they could because they were already selling CNS drugs among others. However, the buyers of Elite's Adderall are established Elite customers, even if LCI did the hard work to create them. But that was part of the benefit of an agreement with LCI.
Going forward, Kurkov's job should now be to let the customers know Elite will continue to provide their DEA quota of the Elite manufactured drug and it would be "Uber Eats" bringing it to them under Kirkov's direction. As a result, Elite would get a bigger portion of the revenues or better said, they would not have to pay as much for delivery as opposed to what LCI was doing. Not to diminish the challenges, it would be up to Kirkov to keep up the business relationships.
And people say Nasrat's not being strategic!
Good points. What we do not know is what negotiations are being done. LCI does not need bad news being announced and, given the public news/noise about Adderall, it would be big news. Perhaps, Elite is providing them some room to maneuver. Let me be clear, Elite is going its own way but will need some actual distribution network that they do not have in-house and, I know and they know, it would be too costly to develop right now.
These comments notwithstanding, what is happening is the execution of the plan. Perhaps, all too often, investors wait from some profound PR by the company or CEO, while glossing over the markers apparent to those who understand the strategic nature of the business. For more than a year, Nasrat has been talking about what they are now doing...and it is something I have been talking about in my questions to them for two years. (Elite gets free consulting and I like to think I am protecting my investment)
The timing of Kirkov's appointment just following the LCI deal termination tells me what is clear...Nasrat has a clear plan and he is executing it. And, by the way, no CEO PR's plans. How can investors discern the plans? By paying attention to what is being done...
Sky, I read your posts with delight in seeing what happens when someone brings a small, rusty knife to an intellectual gunfight about NWBO! Please do continue.
And when going back into other discussions, we would note that the pandemic has upset the equation. How easily that is forgotten. I rather not do homework for others, but a quick review of the transcripts of calls would have found the developmental delays were discussed.
And, yet, given a framework within to write, we have no clear evidence of a grasp on the alleged deficiencies of Elite's CEO in communications. I will not drop a hint, I will plainly state, that is BS. I have come to learn that claims of knowledge, absent evidence offered when asked, suggests a thinly presented argument; particularly when the effort is deflection...
Anyone could have written that general and specifics deficient post.
Provide examples of when unrealistic expectations were set. Discuss, in parallel, what was happening with Elite's finances in relation to the macroenvironment. Let's focus on post-Sox CRL, when the company needed to sell existing assets to fund its existence (remember, those opioids that still have not been commercialized by Nostrum, which is focusing on blood diseases); y'a know, back in the days when the challenge was to keep the lights on. Then pivot the explanation to THE pivot to CNS drugs and the subsequent development that was good but had setbacks due to Covid, as has everyone. Then, drop a line or two into the narrative that speaks to how Elite planned well enough to have API on hand to continue manufacturing rather than struggling with a supply chain that has crippled even big companies, as most API comes from China and India. Finally, toss in a few comments on the strategic thinking that was obvious when investors were surprised with a partnership with Dexcel that portends ex-US distribution (an important facet in this is that NO business tells anyone about such strategic decisions until executed; kind of like the recent loan and buying of the property that was a strategic and financial tour de force). Then, what about an IR perspective and a final word on how investors do not fully grasp the importance of the safe harbor statement and the explanation of how it managed to remain open through the pandemic, a not unimportant matter that could have seen a devastating impact if forced to close; as that would have led to an FDA factory audit before being able to reopen. No small issue, as their retained earnings were not that robust to survive closure for any length of time. Now, I am done...
How is that for starters?
Since I see no hands raised, what can you tell us about how differently Elite might have handled any number of things? I have not been reticent to speak of my perspective. So, I would like to hear your thoughts. Please feel free to be as expansive as you wish...I am as serious as a treat attack.
This conflates myriad issues. First, the business; second the science; and third those who are playing the game of buying/selling shares. It is hardly a novel idea that a poor business might find willing buyers of shares. For that I offer AMC & GME. It is also obvious that businesses can spend years trying to get traction before investors begin to realize the value of the company. For that I offer Apple and, if we want to remain in the pharma/biotech field, I offer Moderna and Alnylam. Anecdotally speaking.
Whether one wishes to acknowledge the science behind NWBO or not doesn't matter. The truth will speak for itself and will need no interpretation. As Yogi Berra might say, it ain't over for those deriding NWBO until the fat lady sings; but I think I hear her warming up in the background!
Let me add some specificity to this...
OTC investors are nothing but armchair quarterbacks that pretend to know everything, yet know nothing...
I am smart and that is why I have not bailed on Elite, just the nonsense.
Great explanation, thank you!
Precisely...
Nonsense
Again, do we really know if Elite received a similar quota for XR as IR? I think not! That is a question worth asking.
Just so we are clear, Elite gets the quota. LCI gets what Elite can produce based on the quota.
It just occurred to me that we shareholders have not asked a salient question...is the low XR sales due to a very limited quota vs. IR?
Despite not raising the quota, the dispersal among the suppliers does not have to be the same. If companies have issues with their contribution, it would be expected that their share of the quota be reduced and, correspondingly, those consistent suppliers with additional capacity would be given an increased amount.
The Wall Street Journal reported today that even though the FDA only announced the shortage this week, "manufacturers and retailers have been signaling for months" that it was becoming harder and harder to fill Adderall prescriptions. Bloomberg reported in early August that "packaging capacity constraints" at a Teva factory were causing Adderall supply disruptions. Last month, NPR reported that a "labor shortage" was the culprit.
Despite the shortage, the DEA has indicated that it does not intend to raise the limit next year.
Well said, JJ...thanks.
JJ, I ran into this and it is or should be an eye-opener for those thinking Elite is being manipulated by small hands or none at all...
According to FINRA REGULATIONS only the stocks above $2.00 can be used as margin collateral. Then only the value of the stock over the $2.00 threshold can be added to the margin pool. As example a $3.00 would allow $1 for margin pool.
Similarly cash requirements for accounts less than $25 million in value to short a stock one needs to hold cash of $2.50 per share short sold even if $0.01 or less. So if you suspect your penny stock is being shorted then it shorted by accounts valued at $25 million or more. The big money rules the roost and can manipulate stock prices with impunity. The system is designed in my opinion to favor big accounts and cripple small ones to allow big accounts to crush retail that dares to trade.
Should Elite investors be surprised the share price is being inched down ahead of what will likely be a new quarterly high for revenues and further discussion of business development? Of course not. This is not a joke but a continued effort to drain enthusiasm of shareholders, who need to remember the 4X increase in revenues over the past three years along with profitability that continues to be misunderstood for the major accomplishment it is. The "dark forces" try to keep the focus on the meandering of the share price as it that reflected business health. It does not, not matter how often it gets stated. The value of Elite exceeds the market cap, which, by the way, is less than the annual revenues! But hey, no manipulation to be seen here.
I get it, the glass will always be half empty of shareholders of Elite...
Seriously? What do shareholders get? How about - an economically vibrant business unencumbered by a lack of capital and now capable of making development commitments!
JJ, thanks for the post. Educating Elite investors helps frame the reality that is occurring and is unequivocally disconnected from the business development and financial results of Elite.
Thanks for making that point...there are a lot of irons in the fire and I think the next CC is going to be more interesting than usual. Elite may well have a new high for quarterly revenues. We may hear something on Dexcel and where Elite is going with LCI or a new partnership, and the status update on ANDAs. Interesting times ahead.
Have you ever been involved in negotiations on partnerships? Nasrat has and he has done reasonably well...SunGen helped with product development, LCI helped make Elite profitable with distribution and Dexcel offers distribution outside the US. Relax!
Thanks for the note, I was wondering about a PR on Sabril. Given the LCI discontinuation, your point about a new agreement being signed could make sense. If true, I would like to see two PRs...not one.
Thanks for sharing the moment...outstanding.
So let me see if I understand this logic... illuminating inference can be obtained from an anonymous poster on a public board, someone who is totally disconnected from the managerial decisions or internal insights in or with NWBO?
Not sure if that is a WOW or a LOL. How about - WOW, what unmitigated BS, LOL...
And there is the rest of the picture...some excerpts from their annual report...
Turning to our balance sheet, June 30, 2022, cash and cash equivalents totaled approximately $88 million. Net sales decreased 12% YOY and gross profit for Fiscal 2022 decreased 56% to $33.2 million. Total Debt: $ 908,891,000
Was this said?
So they turned down Merck ?
Maybe it’s simply that Merck want more than NWBO was willing to give at a price that was too low.
Thanks for the outreach. I saw this and wondered what is going on with LCI. They still have IR 5mg tabs and XR 5mg capsules as products on their site, but what matters is, as you indicate, they are discontinued according to the Orange Book. At the least, this is a question for Nasrat on the next CC. But, what type of question? Here are data points to consider...
* LCI needs revenue and they have sure fire revenues with Elite's products, this when there is high demand for their partner's products (a partner that gets the DEA quota).
* Their partnership with Elite extends to other drugs and LCI would know what Elite is working on, to some extent, and it could add to their revenues if the partnership continues.
* Elite is in a better position to re-negotiate a new deal both with their products under development and with the prospect of being a bigger supplier to LCI.
* Elite benefits by maintaining a distribution network that is already in position and both LCI and Elite benefit from the increased demand and likely an inflationary pricing that would be tied to demand (as per the law of supply and demand).
* It appears to me that, given their situation, LCI needs Elite more than Elite needs LCI because, with more volume and more products, Elite would be an attractive partner for another firm.
* The hiring of Kirkov still makes sense and more so with the additional products under development. Up to this point, who is spending the time making sure the distribution is done well? With more products comes more complexity of operations. Having Kirkov and LCI both make sense.
* If Elite was interested in a new partnership with LCI, they would have asked for LCI to discontinue those products as a sign of good faith.
Thoughts?
Much as indicated when I did the analysis of Q3 2021...
the average ROA for pharma is 4.07%. For Elite, its Q3 2022 ROA is a very healthy 7.15%...higher than the pharma average. Again, this is about how efficient Elite is in using is assets to generate earnings. Some believe that ROA is one of the most important ratios when considering how effectively a company operates to generate earnings.
Back when I was dealing with the press, I knew that sometimes the key points of what I said would be omitted. For example this is what I said...
The reason I can speak to these things is that it was part of a discussion I had with my students on the macroenvironment. I also know from having had to deal with China back in the day of being a global manager.
The reason I can speak to these things is that it was part of a discussion I had with my students on the macroenvironment.
Well, much has transpired since 2018. A number of companies had plans on continuing big spending to grow in China, but they are now under review. I am agnostic on China, but I am aware of the risks and have been critical when firms and investors think it is de-risked.
My perspective is and has always remained clear...unable to get even onerously priced loans, the billion shares + is how Elite was able to keeping the lights on. Now it has the ability to get financing that, along with its cash flow, can pay for product development and G&A. This ain't the Elite many of us first bought shares in and it is the ability to conceptualize a different strategic path that enabled Elite to survive and now thrive.
Elite is focusing on the future and that includes the prospect of $100M in revenues, which does not even require the 4X increase they have seen in three years. Yet, the products in development should generate more than 4X over the next three years and...just so we are clear...$32.2 M in 2021 revenues X 4 = $128.8 M...
Not that is truly worthy of an LOL!