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On the important subject of conflicts of interest: my posts reflect my perspective as an individual shareholder. My posts avoid the kinds of bias that might be evident if I was seeking some sort of compensation from the company or if I had solicited Elite management to hire me in some capacity.
Wow, an entire post themed on the quote "do better." But who exactly is being quoted? "Do better" certainly does not appear anywhere in the linked post. I like to say, "It is time to expect better from Elite management," which happens to be very true. Each and every time I say it, I have just described an example of the exact kind of behavior for which we should expect better. None of my discussions of ethical behavioral involve any mathematical formulas, which seems to present an unexpected challenge. Nonetheless, the context should be clear.
Here is where I "do better" at quoting what I said:
It is easy to identify with those who hate to see a CEO rewarded for failure. Eventually, it is necessary for the few people in a position of responsibility to step up and confront the beast. It is time to expect better from Elite management, including and especially the board of directors.
It is not a perfect analogy because WeWork is not (yet) publicly-traded, but the management tools employed by Adam Neumann as CEO of WeWork show some significant similarities to the tools used by Nasrat Hakim, including profligate spending of company resources on failed projects, without any internal controls. Neumann used private companies that he controlled to sell or lease assets to WeWork at inflated prices and then caused the company to repeatedly insist it was only paying him a "fair market price." Neumann used anonymous and obviously over-estimated company valuations in an attempt to snooker investors. Neumann used the overwhelming voting power of his preferred shares to dominate the board room and solidify his control.
This stuff matters. For years, Neumann was able to get away with what investors later referred to as "antics," but when it came time for the company to move to the next stage with their IPO, it all came crashing down, especially the fake valuation. It matters.
By the way, Neumann walked away with over a billion dollars, while thousands of employees were laid off. The company's future is highly questionable. It matters.
Interesting list. Not sure I see any examples that correlate well with what Nasrat has pulled off for the last 6+ years. I should have thought of McClendon. I used to follow Chesapeake closely. I recall he drove his truck straight into a bridge abutment at 90 MPH on a sunny day less than 24 hours after he was indicted. I don't follow WeWork, but I know that Neumann's conflicts of interest derailed their IPO. He was forced to resign, crying all the way to the bank. I've never heard of the others, but it seems like leasing a building at market rates is a long way from buying millions of dollars of ANDA's at heavily-inflated prices.
What filings are you referring to? Mikah's transactions are not public. It is extremely unusual for the CEO of a publicly-traded company to run a privately-owned competitor, as evidenced by the fact that nobody can provide even one other example of it.
These nonexistent SEC filings are similar to this call, a dreamy figment of Elite unreality.
There were no calls between Nov 2013 and Feb 2014. This event is either a misremembered dream or hypnagogic hallucination. Like all of the Nasrat worship I read, it is not based on real life.
Wow. This is miraculous. Although the supposed 3-tier valuation was done in 2013, it was not made public until **AFTER** the run up was over. This post is inaccurate, unless it is asserting that Nasrat Hakim caused the run up with illegal insider trading. Also, the $2+ valuations represented "current value of future products." Not one of the "future products" in development at the time of the valuation ever amounted to anything, other than dilution. What we did have at the time of the run up was active trials of MULTIPLE NDA OPIOIDS.
No kidding. This post needs an index. In all that mumbo-jumbo, I can't find the section about the CEO avoiding conflicts of interest, and I cannot find any of the examples of public CEO's who do business with their own private companies. In fact, I cannot locate any relevant discussion of the CEO's fiduciary duty to shareholders. In my value system, mathematical formulas are not helpful tools in analyzing ethical vs. unethical behavior.
This is not a matter of opinion, this is a fact. The CEO and the board have a fiduciary duty to every shareholder. Nasrat owes it to you, and he owes it to me. It is his obligation to avoid conflicts of interest, and it is the board's job to see that he does. Look it up.
What competitor? Who else was interested? What legitimate investor wanted to go halfsies on a narcotic ANDA with a 5 cent pharma? What does it matter who owns it, besides us, since the contract for profit splits is already written? The only competitor to Elite in this deal was Nasrat when he stepped in and outbid us. This was a distressed asset and could have been picked for next to nothing, until Nasrat got in the way. Was there any other offer? Was there an assessment of current value by an independent auditor? This is the definition of conflict of interest, and it is a complete failure on the part of Nasrat to fulfill his fiduciary duty to shareholders.
And of course Mikah had nothing to do with Elite being profitable. Mikah has used Elite to launder their garbage ANDA's. Mikah picked them up for thousands of dollars and sold them to Elite for millions of dollars. Most of the original 13 sat in the pocket of Nasrat's investment pals at Epic for years, and they still have not been commercialized because they are all crap drugs nobody uses. I actually have prescribed phentermine a few times, but 5 ANDA's for it seems unhelpful. Meanwhile, Nasrat burns through hundreds of millions of shares via LPC to develop opioids that never contribute a dime toward profitability. Revenues fall so low that the single digit share price disqualifies any further LPC dilution, so Nasrat turns to the Chinese Communist government in the form of SunGen to finance the CNS drugs (but not before helping us out with trimipramine on credit).
The commies in China did far more for this company than Mikah. What exactly is Mikah supposed to have done to make Elite profitable? Where are the other examples of public CEO's who make deals with their own private business on the side? This level of Nasrat worship is truly delusional and has no basis in facts or history.
Look at the list. It's all on the distribution side, other than giant manufacturers who were behaving unconscionably about how much opioid they were distributing to concentrated areas. Elite had zero legal liability for past, current, or future participation in a highly-regulated market, unless of course they were doing things like Insys. Is there concern that executives at Elite were engaged in this kind of stuff?
Percocet, Norco, Dilaudid are prescribed thousands of times per hour around the globe to treat acute pain. Elite sold methadone and Dilaudid for years without incident. There is no shame in treating pain. Methadone treats opioid addiction, in case you didn't know. There is nothing illegitimate about any of them, and if there was, why were millions and millions of ELTP shares wasted to develop them?
Right. Let's leave the profitable Adderall's with Mikah so we can buy the other garbage ANDA's, like trimipramine for $1.2M on credit and 5 ANDA's for phentermine, which accounted for 5 of the 13 original ANDAs we bought for $10M, also on credit. It's funny to see the concern about recouping the investment. As I said before, I guarantee we pay more in interest to Nasrat every month for the trimipramine deal than we get from trimipramine in revenue. I would be happy to be proven wrong by Nasrat or Carter, but I won't be.
My posts have not advocated for the CEO's resignation but rather to put a stop to these bullshit non-arm's length deals with the CEO's private company. I also have pointed out the multiple, obvious conflicts of interest that give an APPEARANCE OF IMPROPRIETY to the CEO's ownership of a secretive private company. Again, I would be interested to hear of other examples where the CEO of a publicly-traded company does business with their own private company, but so far nobody has identified even one other example of this. If this is on the level, why doesn't every CEO do it?
What an asinine take. I can count on three fingers the number of investors who are asking to remove Nasrat as CEO, and anybody who smartly sold their shares is long gone from this board. Nasrat wasted hundreds of millions of shares on bunk projects that did nothing to prevent bankruptcy. The CEO has a fiduciary responsibility to shareholders, not vice versa.
For God's sake, it was the shareholders who saved this company from bankruptcy by tolerating a 4X dilution in our position while the CEO "delivered" a lower share price and empty pipeline. The CEO privately co-owns the only two assets that produce any significant revenue, while he continuously, repeatedly sticks the shareholders with underperforming ANDA's at overinflated prices in borderline-corrupt non-arm's length deals. A brand new investor who has enjoyed all the benefits of a growth market over the last few years can now acquire my exact same position for half the price that I did over eight years of acquiring & holding ELTP shares.
Seriously, I really mean it. This post is the dumbest thing I've ever read on this board. and that's an accomplishment.
Nasrat has addressed this specific issue in a previous call. He does not PR any FDA news until he has a hard-copy letter in his hands. This policy was less noticeable before Thurston Howell III broke the post office.
5.65 million prescriptions in 2018, not bad. You can plug in whatever $$ amount you want for cost per prescription. $50 seems very high to me ($10-45 on goodRx), and even that is still under $300 million/year.
This is good news, but let's be realistic. It's not a billion dollar drug, nor will it be in 2025 or ever.
Not sure what you mean by this. Any drug could be an international drug if approval was sought from the appropriate regulatory organization. As far as I know, Elite has no international approvals. I asked Dianne at one point about seeking approval for isradipine in Canada and received the standard thanks for inquiring go screw yourself response.
If you can find something more recent, please post. I am fairly certain that fewer people are taking nifedipine now than 10 years ago. I am completely certain it is not a billion dollar drug- then, now, ever.
Nasrat, it's very good how you made the share price go down to 5 cents. The shareholders are all happy that you banished those bad opioid ANDAs before they could make any money. We're all much happier with the trimipramine deal you made for us with Mikah. It's very good how you had less revenue this quarter, and we know it will be very good next quarter, too, whatever it is. It is very good what you have done, Nasrat, and we are all very pleased with you.
I definitely agree the decline in manufacturing revenue is the bigger problem. There was zero reassurance in the call, especially when the CFO acts like we're all bunch of idiots. I'm not sure if he is more offensive because of the condescension or because of the lying.
He acts like the 3 cent floor in LPC III is a legal technicality which has no real significance, without ever referring to LPC II and the fact that the 8 cent floor prevented the company from accessing the capital for nearly half the agreement. All the commitment shares for LPC II were completely wasted on a useless agreement, not to mention the obvious fact that the dilution through LPC II is one of the factors that caused the share price to fall well under the 8 cent minimum needed in order to utilize it.
And he is being completely disingenuous when he acts like the LPC dilution has resulted in any "growing revenues" [sic]. The original 13 ANDA's were purchased with a promissory note and then shares, same with trimipramine. The Adderalls were financed mostly by SunGen, and that is why Mikah now owns half instead of Elite owning 100%. As far as I can think of, every single development project that was financed through LPC I and LPC II has been either abandoned or sold off for pennies on the dollar. Can anyone describe any current source of revenue that was the result of capital from LPC?
Finally, his comment about expansion through acquisition is more like a warning than a promise. It's like he's saying, "Lookout, shareholders, that's Mikah behind you."
The decrease in revenue in the current quarter is disappointing for several reasons. First, there is usually an increase in sales of ADHD drugs as kids go back to school. A lot of kids go on a so-called "Ritalin holiday" on breaks from school, and pharmacies usually stock up mid-late Summer for the Fall increase in sales. Shipments should have been way up this quarter, but they went down instead. Of course, this year is not typical because of COVID-19, so it would be unwise to put too much weight on the lack of a back-to-school effect. However, it is also unwise to somehow surmise these numbers indicate the company has become more efficient in the last 3 months.
The reason profit increased is because Q2 included more profit splits from previous quarters' shipments. We saw the manufacturing fees during the quarter that the customer received the product, and now those license fees are making their way in. This is the other reason why decreased manufacturing fees are disappointing- because they foretell decreases in license fees in future quarters. Fewer shipments also means more stock on hand and decrease in expenditures for API, which results in lower cost of revenue. In this case, the lower cost of revenue is due to decreased manufacturing and not increased efficiency. So yes, profit did increase while revenue decreased, but it was because of work done in previous quarters.
We had good reasons to expect more revenue, but we got less. That is a problem for the current quarter and upcoming quarters. Fewer manufacturing fees now mean fewer licensing fees in the future, and that is the true bottom line.
More incorrect fact checking. If the share price is 6 cents, then Elite is selling the shares to LPC for 5.82 cents. If the share price is 8 cents, then Elite is selling them for 7.76 cents. Also, there are additional commitment shares due with every purchase, beyond the 5.97M initial commitment shares that have already been delivered to initiate the agreement. LPC services are not free.
This is not a proper way of thinking of herceptin or future AE37 results. The statement is basically saying it would be impossible to have better results than the "cure" herceptin. I think women who have received herceptin after major surgery and with multiple cycles of adjuvant chemotherapy would be surprised to hear that herceptin is a cure. Why did I cut my breast off and vomit through 52 weeks of paclitaxel if herceptin was the cure?
Right. All you regular Joes out there, don't be afraid, go get some coronavirus. Then simply check yourselves in to the Presidential Suite at Walter Reed with a treatment team led by specialists from Johns Hopkins, who will give you Regeneron's experimental dual monoclonal antibodies, Gilead's remdesivir, and a full course of IV steroids to prevent the cytokine storm and subsequent ARDS.
One should bear in mind that Week #1 is far from the most dangerous week in the course of a COVID infection, and none of the above medications ameliorates the hypercoagulability associated with COVID-19. Steroids may help to prevent acute respiratory failure, but they might increase the virus's already high risk of causing a serious blood clot, such as a DVT, PE, heart attack or stroke. I'll have the vaccine, thank you very much.
I would like to believe this is true, but the available objective evidence suggests otherwise. Valuations and projections vary wildly among the amateur analysts on this site and others, but the only true professional analysts who have followed this stock regularly over the past 6 years are from the team at Lincoln Park Capital. They believe it is possible for SP to fall below .03.
Who knows what would have happened if Nasrat hadn't so badly botched the development of SequestOx. But I know this with certainty: SequestOx is the one and only thing Nasrat ever did that made the ELTP share price go up.
If I had to choose between Nasrat and SequestOx, I would choose SequestOx for sure. Even if it never comes to anything, at least shareholders would not have to pay its hotel bill.