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Data from Novo Nordisk has raised the bar for Viking when it releases trial data this month
Viking Therapeutics Inc.'s stock fell 5.6% Friday, in a pullback from recent highs, after strong data from Novo Nordisk on an oral version of its weight-loss drug raised the competitive bar for Viking, which is expected to release data from its oral-drug trial late this quarter.
Viking's stock (VKTX) has been on a tear ever since the company posted positive results from a mid-stage trial of an injectable version of its drug VK2735 in late February as a treatment for diabetes and obesity.
The stock more than doubled the day the data were released, and it's now up more than 277% in the year to date. The stock is trading above $70, while it stood at $18.28 at the start of the year.
Viking is viewed by some as a cheap play on the weight-loss-drug craze compared with the two market leaders, the Danish Novo Nordisk (NVO) (DK:NOVO.B) and Eli Lilly & Co. (LLY).
William Blair analysts said they view the efficacy bar for the coming oral-tablet readout as having increased to 4% to 5% from 2% to 3% previously, based on investor feedback.
Novo Nordisk's readout on its amycretin drug from Thursday showed a placebo-adjusted weight loss of about 4% at week four.
"While we emphasize that the study provides only a glimpse into the clinical profile of amycretin (small study with short follow-up with undisclosed patient baseline characteristics), we concede that investors will invariably place undue weight on the amycretin data, given the exceedingly large commercial opportunity in the metabolic dysfunction space," analysts Andy Hsieh and Alexandra Ramsey wrote in a note to clients.
William Blair, like all 10 analysts polled by FactSet, has the equivalent of a buy rating on Viking's stock, showing just how much excitement its trial data has created.
VK2735 is a GLP-1 drug; GLP stands for glucagon-like peptide. It works by mimicking the effect of a gut hormone that can help control blood-sugar levels and reduce appetite.
Novo Nordisk's Ozempic drug for diabetes and Wegovy for weight loss have become so popular the company is struggling to meet demand, and its main shareholder is buying a contract manufacturer to help it ramp up supply. For now, both drugs are only available in injection form, and experts agree that oral versions would be a game changer.
Oppenheimer analysts agreed the bar has been raised for Viking.
Analysts led by Jay Olson said they have three potential scenarios for Viking's stock when the data are released.
A best-case scenario calls for 25% upside potential if it reveals 3% to 4% placebo-adjusted weight loss with a 75% possibility of success; a middle scenario of 10% downside if the data show 1% to 2% efficacy with a 15% possibility of success; and a worst-case scenario of 20% downside for lower efficacy or unfavorable tolerability with a 10% possibility of success.
Still, the company's recent reading on the injectable form of VK2735 far exceeded expectations by demonstrating 13.1% placebo-adjusted weight loss at week 13 with favorable tolerability, they wrote.
That "supports a potentially best-in-class profile among dual-agonistGLP-1/GIP therapies. We see positive read- across to oral VK2735, which is expected to achieve 60% bioavailability compared to subcutaneous in steady state, while we anticipate Viking could similarly beat expectations with oral VK2735," the Oppenheimer analysts wrote.
Jefferies analysts initiated coverage of Viking with a buy rating, describing it as a strong mid-stage obesity player with scarcity value. Analysts led by Roger Song assigned the stock at a $110 price target, which is 57% above its current price.
Jefferies is forecasting a total of about $12 billion in peak-adjusted sales for VK2735 as a treatment for obesity "and note palpable strategic interest in the metabolic space from big pharma."
Read now: Viking Therapeutics' promising weight-loss drug data makes the company a takeover target
The analysts noted that Viking is also developing a treatment for NASH, or nonalcoholic steatohepatitis, that produced promising liver-fat reduction in a Phase 1/2 trial. NASH is a more severe version of nonalcoholic fatty-liver disease, or NAFLD, the name for a range of conditions that occur when excess fat builds up in liver cells.
NASH is the main reason that patients require liver transplants, and there are high hopes for the therapies currently in development.
For more, read: Inside the NASH drug boom: New drugs for a 'silent' liver disease that affects millions near FDA approval
Viking is expected to offer a readout on its NASH product in the first half of the year.
-Ciara Linnane
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03-08-24 1359ET
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LLY has recovered from the NVO news, and is now up. Hopefully VKTX also starts to recover, and soon shows 3-4% weight loss from its VK2735 oral 28-day Phase 1 trial.
sab63090, sorry to hear what you are having to deal with as a result of RSV shot aftereffects.
I remember your IDCC analysis 10+ years ago when it was under $10. That was my biggest winner ($7 to $90) until the recent move in VKTX which I accumulated at around $4 average (after losing big in CLVS).
I came back to IH after 3+ years looking for VKTK analysis and am impressed with the level of knowledge and acumen on this boards participants. Mufaso's posts on VKTX seems spot on (thanks Mufaso for sharing your analysis). I invested in VKTX about 3 years ago for their VK2809 NASH drug (which in itself is best in class and has better results than Madrigal's soon to be approved NASH drug); but am pleasantly surprised by VK2735 data in the past year.
Wishing you quick recovery and good health.
-Divya
Jim, sorry to hear this sad news. My prayers to God almighty to give you and your family strength to bear this loss.
8K Filing: Some good news
Item 8.01. Other Events.
Asustek Actions
On December 20, 2018, the U.S. District Court for the Northern District of California (the “Court”) issued an order on the parties’ motions for summary judgment filed on August 16, 2018. The order was filed provisionally under seal in order to provide an opportunity for the parties to propose redactions of confidential information before release of a public version. InterDigital’s motion was granted in part and denied in part. The Court: (1) granted InterDigital’s motion as to Asustek Computer Incorporated ("Asus") being judicially estopped, due to Asus’s prior inconsistent positions, from arguing that the parties’ April 2008 patent license agreement (“2008 Asus PLA”) is “non-FRAND”; (2) denied as moot InterDigital’s motion as to issue preclusion preventing Asus from re-litigating issues decided in the parties’ arbitration; (3) granted InterDigital’s motion that as a matter of law, Asus cannot void the binding and enforceable 2008 Asus PLA; (4) denied InterDigital’s motion as to Asus’s Sherman Act claim; and (5) granted InterDigital’s motion as to Asus’s promissory estoppel and California UCL claims. The Court denied Asus’s summary judgment motion in its entirety.
Huawei China Proceedings
On December 24, 2018, InterDigital was notified that the Chinese Supreme People’s Court (the “SPC”) granted InterDigital’s petition for retrial of the October 16, 2013 Guangdong Province High Court decision which affirmed a Shenzhen Intermediate People’s Court ruling that the royalties to be paid by Huawei for InterDigital’s 2G, 3G and 4G essential Chinese patents under Chinese law should not exceed 0.019% of the actual sales price of each Huawei product. The SPC also issued a mediation order that terminated the proceeding. The SPC’s grant of InterDigital’s retrial petition suspends enforcement of the decision of the Guangdong High Court and, combined with the SPC’s issuance of the mediation order, effectively vacates the Guangdong High Court’s decision.
Pre-market volume shows 186,900. Any news?
LG's approximately $28 million yearly revenue, at 20% tax rate is $22.4 million after tax, or $0.64 per share.
At a conservative 15 times earnings, it should be worth $10 per share. IMHO, it should take us to mid-80's.
In addition we may be getting some past due in form of patents. So, not bad overall, IMHO.
Compared to the earlier guidance, the mid-point of 4th quarter recurring revenue is up $7 million.
Assuming it is a fixed fee contract, it will be about $28 million a year.
Also, in the conference call we were told that the fixed fee revenue will go down about 20% due to new accounting rules starting Jan 1st 2018. This $7 million increase in quarterly revenue takes care of about half of the $14.7 million (20% of $73.7 million) expected decrease starting Jan 1st 2018.
Now we need ZTE/Lenovo/... to help us at least maintain the recurring revenues.
IMHO, a company like Microsoft will be able to monetize it much faster. I strongly feel that IDCC will receive a buyout offer in not too distant future.
Interesting change in ownership. Creative planning out of Kansas City are the largest independent RIA (Registered Investment Advisor) in the US ($32 billion assets under management).
http://creativeplanning.com/
If you follow this link,
http://www.nasdaq.com/quotes/institutional-portfolio/creative-planning-872574
they invest mainly through ETF's, and very few individual stocks. For some reason, during 3rd quarter they decided to increase their stake in IDCC to $95 million, now holding approximately 3.9% of outstanding shares.
Owner Name Date Shared Held Change (Shares) Change (%) Value (in 1,000s)
BLACKROCK INC. 09/30/2017 4,634,616 387,765 9.13 331,375
VANGUARD GROUP INC 09/30/2017 2,932,583 67,162 2.34 209,680
CREATIVE PLANNING 09/30/2017 1,320,197 1,312,951 18,119.67 94,394
http://www.nasdaq.com/symbol/idcc/institutional-holdings
I don't think so. The press release states that the license expires end of 2017.
The total revenue guidance for the period includes non-recurring revenue attributable to the expected recognition of the remaining portion of the non-refundable prepaid balance on a patent license agreement scheduled to expire at the end of 2017
According to Yahoo, the next year (2018) average earning estimate is $1.17 per share and revenue estimate is $313.53 Million.
The FASB changes are really hurting us, and the company has been unable to sign any significant licenses since Apple (almost a year ago).
IMHO, if this does not change we could go down significantly, based on $1.17 estimate for next year.
Holding & Praying!
Earnings Estimate Current Qtr. (Dec 2017) Next Qtr. (Mar 2018) Current Year (2017) Next Year (2018)
No. of Analysts 3 3 3 3
Avg. Estimate 0.68 0.28 4.05 1.17
Low Estimate 0.64 0.24 3.98 0.92
High Estimate 0.72 0.3 4.12 1.44
Year Ago EPS 3.85 0.93 8.78 4.05
Revenue Estimate Current Qtr. (Dec 2017) Next Qtr. (Mar 2018) Current Year (2017) Next Year (2018)
No. of Analysts 4 4 4 4
Avg. Estimate 91.48M 77.79M 418.96M 313.53M
Low Estimate 88.2M 68.3M 415.1M 274.6M
High Estimate 95.7M 99M 423.4M 394.6M
Year Ago Sales 273.87M 94.53M 665.85M 418.96M
Sales Growth (year/est) -66.60% -17.70% -37.10% -25.20%
https://finance.yahoo.com/quote/IDCC/analysts?p=IDCC
Something is up?
Bid $72.65 Ask $80
1200 shares traded, last trade $72.80
Today is my birthday, maybe IDCC wants to give me a birthday gift.
JMHO
I think based on the current recurring revenue they can increase the quarterly dividend to $0.40 (or $1.60 yearly).
Here are the calculations:
Currently yearly recurring revenue:
Apple $110 million
Huawei $70 million
Samsung $70 million
Others $110 million
------------
Total Recurring Revenue $360 million
Less Annual Expenses $220 million (approx. $55 mil/quarter)
------------
Gross Profit $140 million
Less Taxes (35%) $49 million
------------
Net Profit $91 million
Or $2.50 per share (based on 36 million shrs out)
A $1.60/share yearly dividend out of $2.50 per share yearly net profit will give us a nice $80 price based on 2% yield, while we wait for additional licensees and 5G/iOT revenue growth.
JMHO
Loop, if these are RSU's, it is very egregious. These guys need to be asked to leave. I just voted NO.
To give them 4 million shares (2.4 new + 1.6 from old plan) over next 3 years. For what?
Remember their BS goal of $800 million in revenue in 3-5 years.
Mr. Meritt just got 51,320 RSU's as per this 3/17/2017 Form 4.
Form 4
(3) The transaction reported represents the vesting of an award of performance-based restricted stock units granted to the reporting person on March 15, 2014 pursuant to the company's 2009 Stock Incentive Plan in accordance with the 2014-2016 cycle under the company's Long-Term Compensation Program. Based on the achievement level of the 2014-2016 cycle performance goal, 200% of the reporting person's target performance-based restricted stock unit award, or 51,320 restricted stock units, vested on March 15, 2017, together with 2,386.5179 additional shares representing accrued dividend equivalent units.
Looks like something good is coming.
Just put in an order to sell 500 shares @ $86.95 and it got executed within a minute.
Mickey, you are in our prayers.
Your optimism and positive energy, together with the chemo, will help you beat this terrible disease.
I am hoping too. I bought another 2500 shares at approx. $86 hoping for a rebound by ASM time (June).
And also sold 25 June $87.5 puts for $7.58 (2500 shares).
Loop & olddog967, those figures are very close to what I saw in Sierra's 4Q 2016 earnings release:
SWIR Q4
"Gross margin was favorably impacted by a $14.4 million reduction in our cost of goods sold as a result of a change in estimate of our Intellectual Property ("IP") royalty obligations, of which $13.0 million relates to a one-time adjustment in our accrued royalty obligations effective October 1, 2016, and $1.4 million relates to a lower royalty accrual amount for products sold during the three months ended December 31, 2016."
I have followed Sierra for about 10 years (because it was an IDCC licensee), and bought a decent chunk in February of last year (when it fell from around $50 to about $10 over 12 months).
It made a huge move after the 4Q result which beat because of this IP adjustment, and their iOT module being selected by Volkswagon for its connected cars.
The stock has almost tripled from where I bought it, buy it still sells for about 1.3 times sales, no debt, only 32 million outstanding shares, and very well positioned in iOT.
JMHO
I agree. I am expecting the recurring revenue to go to $450 - $500 million range by end of this year.
Then the real growth will come from iOT. I recall reading some white paper by IDCC that smart cities could help save something like $358 billion in the future.
Handset royalties mix is going towards 75%/25% (fixed/per unit) of the $500 - $600 million target.
iOT connections and software sales is where we will hopefully get good growth & revenues in the future.
JMHO
la-idcc-fan, most of the projected revenue for 2017 has not been received
From 10-k (Page 38)
10-K
"At December 31, 2016, we had $952.8 million of cash and short-term investments and up to an additional $1.1 billion of payments due under signed agreements, including $228.5 million recorded in accounts receivable that is due within twelve months of the balance sheet date."
This 228.5 million recorded in accounts receivable will be received as cash increasing cash and cash equivalents, and reducing accounts receivable.
I think we will be OK if we get a LG and/or ZTE by this years ASM.
JMHO
Loop, thanks for your thoughts.
I hope we are able to get LG and/or ZTE before our stock price drifts much lower.
The recurring revenue range of 360 - 380 millions does not compare well with the 665 million revenue we had for 2016.
LG contract expired end of 2010. Based on what we are getting from Huawei & Apple, what range would you expect for past sales (2011 -2016) and ongoing quarterly revenue?
TIA
la-idcc-fan, what surprised me most was that the stock reacted positively to Apple license news in mid december, and was trading very strongly until earnings came out, despite the company having clearly stated that the recurring revenue range was $360 - $380 million.
Just like any other stock, it is very hard to time and trade this stock.
I have been a very blessed shareholder since 1993, and am very thankful to management for taking the company where it is today, and the experts on this and prior boards for sharing their thoughts and expertise.
On a personal note, i had sold 10,000 shares last year (50% of my position) in the $65 range. When the stock hit $100, it felt as if after almost 25 years of patience, i had left $350,000 on the table.
Then this past Wednesday, worrying about the forward guidance, i sold another 2500 shares at $101. On thursday, after the earnings, i was blaming myself that having known the recurring revenue range, why did i not sell the entire position before earnings and buy it back 15% cheaper.
In the end, it is all about fear and greed my friend.
The stock was ahead of itself based on fundamentals. If we get ZTE, LG and others licensed, the recurring revenues will be in $500+ million range and the stock price at new highs.
We are very lucky to be invested in a leader in a high growth sector of the market (5G & iOT), with a strong management that has bought back almost 50% of its outstanding stock (down to 35.5 million shares), and has executed very well under very difficult circumstances (anti patent holder environment).
All IMHO.
One of the reasons, IMHO, is that what fixed fee revenue we get from Apple going forward (approx. 116 million a year) is less than the $133 million per unit royalties we got from Pegatron in 2016.
Apple fixed fee covers products from all its ODM's (Honhai, Pegatron etc).
Even with Apple signed our recurring royalties have not gone up. It has given us better stability (fewer cry babies like Pegatron, Asus, Sharp who sign a per unit license and then complain they are paying too much) and hopefully will help sign others.
We need to sign the holdouts like LG, ZTE, Lenovo and others to move the recurring handset royalty base to $500 - $600 million range, and also grow the iOT business (Avanci, Harman, CA).
A positive in the report is the $5.9 million in technology solutions revenue from Intel. Wilth Intel getting a share of iPhone market, plus adding CDMA capabilities to their modem, this should continue to grow.
An LG or ZTE license is what is now needed.
Note: With the stock price back under $94, the chances of converting the debt to stock ($316 million) next quarter, are also doubtful. For the convertible to convert ealy, stock has to trade over $94 (130% of conversion price), for 20 of last 30 trading days.
Another very strong statement from 10-K:
Cash and Short-Term Investments
At December 31, 2016, we had $952.8 million of cash and short-term investments and up to an additional $1.1 billion of payments due under
signed agreements, including $228.5 million recorded in accounts receivable that is due within twelve months of the balance sheet date
Some details from 10-K:
10-K
"As discussed above, in fourth quarter 2016, we entered into the new Apple PLA. During 2016, we recognized a total of $169.3 million of
revenue under the Apple PLA, which included $141.4 million of past sales.
Also as discussed above, during third quarter 2016, we entered into the Huawei PLA. During 2016, we recognized a total of $154.8 million of
revenue associated with the Huawei PLA, which included $121.5 million of past sales."
This translates to Apple paying $27.9 million fixed royalty each quarter ($169.3 - $141.4).
And Huawei paying $16.65 million fixed royalty each quarter ($154.8 - $121.5) / 2 quarters.
Apple is licensed until Sep 30th 2021, so 19 more quarters.
Thus Apple license is $169.3 million (for 2016, past and 4th quarter) + $530.1 (for 2017 thru 30th Sep 2021).
Total Apple license is thus approx. $700 million.
Samsung is paying at the fixed rate of $17.25 million each quarter.
Thanks olddg967, Robo SC, vegas_options & jeffree.
And JimLur & other amazing contributors over the 22+ years I have been invested in this great company.
Jeffree, IMHO the ex-dividend date is Monday the 10th.
Here is my explanation:
Based on T+3 rule i.e., settlement date is 3 business days after the trade date, anyone buying today (the 7th), will have a settlement date of next Wednesday (the 12th), and will thus qualify for the dividend.
Buying of Monday (10th), will settle on Thursday (13th), and will not qualify for dividend.
Less than 25,000 shares, and we are in the GREEN!
From TDAmeritrade ThinkorSwim platform, I see only a headline:
"Dougherty & Co. Downgrades Interdigital to Neutral'
The current stock price of $79.20 is 9.4% higher than the conversion price of $72.37.
My questions:
1. Why is the bond trading 22.2 % (and not 9.4 %)higher than the face value ($122.20 vs $100)?
2. Why is someone buying bond for $122.2, which translates to approximately $88 per share ($122.2 / 1.38172), when they can buy the stock for $79.20?
Thanks in Advance.
Note: The $1.50 dividend on $122.20 bond, and the $1.20 dividend on $79.20 stock yields roughly the same. So, IMHO, bond does not have a substantially higher dividend yield to justify the extra 12.8 % (22.2 % - 9.4 %) premium.
la-idcc-fan, those are my thoughts also.
From this site that olddog967 gave:
http://finra-markets.morningstar.com/BondCenter/BondDetail.jsp?symbol=IDCC4344569&ticker=C648989
During September about $30 million of bonds have traded ranging from $114 to $122.
Unless the buyers are looking to convert, they all will loose money if they hold to maturity.
These $30 million bonds will convert to about 400,000 shares.
So these bond buyers are paying premium prices (over current market price), to accumulate whatever stock they can get their hands on.
JMHO
Jeffre,
Do we know how much money is left from the $400 million buyback program?
This is the statement from the 2nd quarter earnings release
"During second quarter 2016, the company repurchased 0.3 million shares of common stock for $18.6 million. From July 1, 2016 through July 29, 2016, the company repurchased an additional 0.1 million shares at a cost of $5.7 million, bringing the total number of shares repurchased under the company's current $400 million stock repurchase program to 6.7 million shares at a cost of $313.7 million."
Mickey, the fundamentals are great.
But, IMHO, this constant resilient move with,
1. No insider sales
2. No effect of downgrade
3. Bond price trading at $121.50 for $100 face value bond
4. Very impressive presentation on analyst day (I recommend everyone listen to the 2 hour webcast)
is because a bid is probably in the works.
Most likely Intel, who bought about 9% of our patents for $375 million.
This is all JMVHO.
olddog967, is this calculation correct?
Based on bond price of $121.50, someone is paying approximately $87.93 for each share of IDCC (1215/13.8172 = $87.93).
IMHO, they are not buying a $100 face value bond at $121.50 for its original 1.5% yield.
And if they buy it for $121.50, hold it to maturity and do not convert, they will only get the face value of $100. Unless they convert, they loose $21.50 less the 1.5% interest (approx. $6).
If this is correct, then the bond price is telling us that we are going much higher.
TIA
Thanks olddog967!
Since we have a very small float, buying these convertible bonds is probably another way for an acquirer to buy share of IDCC.
Also, even at these levels there has been no insider selling.
Hoping for a bid or a significant license in near future.
JMHO
Thanks Hydro_Gen.
A couple of new licenses (LG, ZTE, Lenovo ..) has the potential to take us over $94 price.
Hopefully that happens this year.
Questions regarding 2020 convertible debt ($316 million)
1. Are these convertible prior to maturity, if the price trades above the conversion prior for certain number of trading days?
2. Any way to find out who holds these bonds and what are they currently trading at?
TIA
IDCC Valuation:
35 million shares @ $77 = $2.7 billion.
Net Cash = $819 million - $316 million = $0.5 billion (approx).
So, net of cash, we are valued at only $2.2 billion.
This is with $500 - $600 million / year revenue goal (mid point $550 million) from conventional handset & infrastructure market.
Not including the iOT & M2M growth opportunities (which are considerable based on the industry projections), we are only at 4 times the revenue.
Still very undervalued. JMHO.