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Hey Blue,
Yes, a quick Google search can get you a lot of info if you want to validate any of my following comments:
As with most drugs, an overdose can at the very least increase the significance of the drugs side effects (in this case “Symptoms of an overdose with Lyrica may include mood changes, feeling tired, confusion, depression, agitation, restlessness or seizures”).
While it may not be as lethal as say opioids, you certainly try to mitigate overdose if possible. If a physician can mitigate overdose (both intentional and accidental – imagine if you accidentally overdose and get behind the wheel, or if your kids get into the medicine cabinet) through the effortless prescription of one brand over another (all other factors remaining equal), it seems logical they would do so.
You can quickly run a Google search and find several articles related to its overdose as well as the increasing intentional abuse of the drug. While it doesn’t have the abuse rap of opioids, that doesn’t mean it is omitted from such action.
Here’s a helpful brief snippet on why it has been intentionally abused:
“What are the effects of Pregabalin?”
“Pregabalin can produce feelings of euphoria, relaxation and calmness. It can also enhance/increase the euphoric effects of other drugs, like opiates.”
The following is all personal thought:
I still can’t put my mind to the market impact that a technology like PODRAS may have (if successful of course). I imagine someone like Samsa prosecuting a physician on behalf of an ill-struck or heaven forbid deceased loved one, where an overdose could have been mitigated simply by prescribing another brand. I’m not a lawyer, so I’m not sure what kind of accountability the physician would have in this case, but I would go so far as to suppose that a physician would fear the risk of lawsuit or at least the risk of defamation.
You can apply similar rationale to the manufacturer of that drug as well. Consider what a company like Pfizer or Purdue would do if their product was that inferior. Imagine the pressure they would face in that market (litigious and marketing pressures), perhaps even the political pressure to withdraw their product. It happens in this industry.
My best guess to the reason they haven’t & won’t partner Regabatin “any day now” is because they will want to wait until PODRAS studies are complete. Whether PODRAS is or isn’t ready to be incorporated in this version of Regabatin to be partnered for development later this year is a big variable in value and potential marketability of the product. Pending the outcome of PODRAS studies, they may have a different set of interested suitors to partner with, and surely the values and details of the partnership will vary.
This is just a guess upon considering the business environment behind such a deal. If you’re IPCI, you’re not going to give away the farm on such a potentially market disruptive technology just to have a partner to help you through, you’ll want top dollar. If you’re a potential suitor, you’re not going to give top dollar unless you’re sure you know what you’re getting into (referring to having the PODRAS studies completed).
With respect to Rexista, I am really hoping for a delay on the PDUFA date… to me that would indicate the FDA is much more likely to wait for the studies to complete and consider approval. This would prevent IPCI from having to pay the application fee and endure the long wait of the application process… again. Hopefully the FDA will see what kind of a burden that would be and how that would prevent an incrementally better product than what is available to get to the market (granted the studies are positive), without considering the fact that IPCI followed the FDA’s guidance the whole way. But like I said, that is just what I am hoping for, otherwise to go through the whole process again… ugh... yeah, a couple years.
I am staying long IPCI however, and personally am really looking forward to approval and commercialization of just 1 more ANDA, as should new investors… valuation is all subjective until there are real earnings. Breakeven is a great milestone which they will have accomplished with just Focalin and Seroquel, but as you can see it doesn’t do much for creating a floor in share price like a P/E valuation will.
With that being said, the next ANDA will be big in my opinion, and at these levels new investors should understand where IPCI is outside of Rexista and how that can hedge the risk of Rexista. If their next generic only means $ 5M to the bottom line, similar to Focalin (one that they don’t manufacture on a cost plus basis), that would be $ 5M in earnings as they are at least breakeven with Focalin and Seroquel, and a 15 PE puts IPCI at a $ 75M market cap, or $ 2.25 – $ 2.50 per share without putting any value toward the remainder of their pipeline. That’s a nice return for those who can pick up shares at a measly $ 1.20, and that only considers 1 ANDA, without a manufacturing agreement at that.
While any number of ANDA’s could be approved any day, don’t write off even their latest application for Ranexa…
If I understand everything correctly, per GDUFA, IPCI’s Ranexa application (submitted in December 2016) falls into the 5th cohort (5th year of GDUFA’s applicability) and the performance target for the 5th cohort is that 90% of all ANDA’s are reviewed and acted upon within 10 months of submission, which is right around the corner! I’m not sure I have seen any chatter on this yet, if someone already brought it up I'm sorry if I stole your thunder.
Hey Vik, if Rexista studies are inexpensive and they feel they can penny pinch their way by on Focalin/Seroquel revenue and use just a little ATM, we probably won’t hear anything at all as they have been doing just that for months I believe.
IMHO it would be downright silly to do an offering here (not impossible, but silly). I say this simply based on the mathematics, whereas say they needed $5M to do complete required Rexista studies and maintain a sufficient cash balance for operations. They would probably have to sell 7M+ shares in order to raise just $5M at these levels after lowering the offer price to generate buyer interest, fees, etc. That’s roughly a 20-25% dilution for just $5M cash…
An alternative may be where they can give a partner say an extra 10% of Rexista profits for the upfront payment of $ 5-10M to help IPCI cross the finish line, which is chump change for big pharma and a good deal for someone to get in this space. I don’t know what those numbers would be, so move them anyway you want, but it would be in the best interest of the company & shareholder value to give up a little more in a partnership agreement than dilute at these prices (ie give up 10% of profits on 1 drug than dilute the company 20+%). It’s very straightforward, so I’m hoping a CFO understands this!
To be short here is simply betting that there is no partner at the table to help with cash concerns, and there is no further development on the ANDA front, which is unfortunately very plausible.
While the adcom surely made the outlook of Rexista look bleak, they were at least consistent voicing the need for safety studies, so if they can complete them and they are favorable… who knows! My best guess is the FDA will delay the PDUFA data if they are close on these studies rather than issue a CRL on Sept 26th. I’m not going to place a bet on that however, I’m just looking at the generic safety net, recognizing that the FDA is making strides on the ANDA front the last few months (average of 69 approvals per month the last 6 months vs just 51 approvals per month the 6 months prior).
To cover all options, let say the sell the rights to Focalin to PAR… let’s just round IPCI revenues to $5M, if PAR we’re to give just $ 30M for those rights, it’s merely a 6X earnings multiple for them since there is no added cost to PAR (which is beyond a great deal btw), and that better be enough cash to operate until more products are commercialized! Just saying… IPCI is undervalued, but unfortunately it is too easy for investors to see the risks at play as well. GLTY
True, but the current tech behind Rexista w/ nPODDDS addresses the immediate release need, which will disrupt the current market dynamic… As described on pg. 19 of their March investor presentation, nPODDDS is described as: “Drug release provides a defined Point of Divergence (POD) in the initial loading dose provides a quick onset of action, followed by a shift in the drug release rate to a controlled release or sustained action.” They have articulated this in more detail in presentations/interviews in the past.
Users need quick acting medication to relieve pain, making IR important, but ER is great for covering pain throughout the day/night. The ideal product would have both, with ADF properties... such as Rexista (all dependent on if the FDA agrees to the claims made by IPCI regarding the product of course).
Right, right, the amazing conference call that subsequently sent shareholders praying 14 cents/ share holds up… Not sure what you're looking for here even, I guess ELTP is of no relevance to IPCI, they are not even listed as a secondary competitor in our latest presentation… while it's of no surprise this message board doesn't think very much you, it's humorous to think that IPCI management doesn't think very much of your company either. You probably don't care though, looking at some of your posts, that big buyout of ELTP you're pumping is right around the corner eh? Sorry Doog, you must have ELTP wrong, logically that big buyout will be before their reverse splits, there's no way this guys could possibly be wrong about anything!
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=127735862
I agree Tekterra, labeling is likely why EGLT isn’t soaring… They may have received approval, but the approval doesn’t back all the claims, which essentially doesn’t make their product all that much better that currently marketed products. I just posted that link above for reference, but I didn’t find the original story so take it for what its worth as of now.
What it means for IPCI – while not for the same exact product it is comparable/future market. If this is true, there is still a large gap to the “best in class” technology IPCI is hoping to get its first approval for.
Without much time to digest this, I’ll post my analyst thoughts. In the summary from the link above, it states “it cannot be concluded that ARMYO ER has physical and chemical properties that are expected to reduce abuse via the oral route.” No shocker as I believe only Rexista with PODRAS is going to try and claim that for all types of oral abuse, to include overconsumption.
However, the next line may need another look. “Abuse of ARYMO ER by injection, as well as by the oral and nasal routes, is still possible.” Combine that line with “physical and chemical properties that are expected to reduce abuse” from the first snippet, perhaps Rexista is fine in this regard, as it seems like the physical properties of the active ingredients in Rexista change enough to make abuse difficult. From slide 9 of their latest presentation, they clearly state the physical properties of the active ingredients change:
-Coagulates instantaneously if crushed/pulverized and then hydrated
-Once hydrated, forms a viscous hydrogel that is difficult to: (Syringe, Inject, Snort)
From this, while not addressing the full suite of abuse methods, we can only hope the Rexista submission has fully addressed these concerns brought out in the EGLT filing. Since we all like to be super skeptical, perhaps Rexista’s filing played a part in this observation/decision of ARYMO (I wouldn’t put money on it, but when board – speculate!).
As shareholders we must all see the added risk, that being how is our product going to fair come approval time with similar claims? The FDA wants to get better products to market, but they aren’t just handing out approvals. I consider the ARYMO decision an added risk as it once again shows that the claims are challenging to support, but added reward as there is still a gap in technology from other marketed/approved products to prevent abuse. As always, I’d love to hear the thoughts of others.
Another Metformin (Glucophage) approval yesterday. So one on 12/7 & the other on 12/13… can hope they’re picking some by product and IPCI’s is in the hands of a reviewer. Glucophage is the largest market of all ANDA’s IPCI has submitted at $ 2.4B (and growing fast), and it has already gone generic so commercialization could be upon approval/partnership. It would be a nice surprise bump as this would bring hard dollars while we await more definitively timed catalysts such as the patent approval and the NDA acceptance.
I wouldn’t be too sure that this is 100% negative. Perhaps it even allows IPCI to gain revenue as they may be able to manufacture themselves on a cost plus basis like their deal with Mallinckrodt. Or maybe IPCI’s approval on other strengths is on the heels of this one as Par likely had to jump through similar hoops for their ANDA requirements as IPCI’s version. Of course, it may hurt changing their sales face from Par to whomever if that be the case down the road. There is just nothing known at this point, so wait and see.
Thanks much Angelo, I'll share the response when received.
http://www.raps.org/Regulatory-Focus/News/2016/11/01/26106/Generic-Drug-Backlog-at-FDA-A-Dive-Into-the-Confusing-Numbers/
Trying to help out with a little more public DD, but this is an interesting article that could be looked at a couple ways. It mentions:
“Furthermore, for those ANDAs submitted prior to 2014, there are fewer than 100 ANDAs that have been left untouched by FDA, with no communication to industry.”
When I say it can be looked at a couple ways, I mean a) does IPCI really have 5 (Glucophage, Effexor, Protonix, Lamictal, & Pristiq) of the last 100 remaining ANDA’s submitted pre-2014 untouched? Or b) has IPCI received word from the FDA and not communicated such events?
I had asked for Penna’s email on this board a couple weeks back, looking to address this very question. Now that the NDA is completed, perhaps this is a good time to ask. I will if someone can provide the email, or anyone else can if they already have his contact info. It would be very bullish if all 5 have not yet been touched as the FDA will surely like that untouched number to go to 0 as soon as possible, but then again it would be bearish if they had been looked at and need attention as that may re-start a long wait.
Of the two approvals this year, they might have been the least immediate PPS impacting ANDA’s possible, as Keppra is the lowest revenue and Seroquel has to oblige to 180 days exclusivity. Pristiq is the only other ANDA to have not gone generic it looks like and may have a similar exclusivity period. I’m just saying as another ANDA approval should still give a better immediate PPS impact as they can commercialize right away, and pending the validity of where IPCI's 5 ANDA's stands in reference to less than 100 untouched remaining, they could come sooner than later. Although, ANDA’s are clearly no longer the meat in this pipeline dinner plate, but they are still nice to haves.
http://www.accessdata.fda.gov/scripts/cder/daf/index.cfm?event=reportsSearch.process
Did Par just receive full approval for Focalin on 11/30… am I missing something? Was this one a generic of their own and not tied to IPCI?
To consider, let’s look at what happened with PTIE. They submitted their NDA on March 29th 2016. They received their acceptance to review from the FDA on April 12th, with a PDUFA date of September 25th. That’s within 6 months of filing, though acceptance to review very prompt after filing.
IPCI will most likely follow a similar time frame, with acceptance for review likely coming much sooner than 74 days and IPCI’s PDUFA date set for May 2017, within 6 months of the filing date.
We must all be pleased they filed within their latest guidance, it sets yet another clock for this soon-to-boom star. I’ll be in touch, looking forward!
Can anyone provide Domenic Della Penna's email? I would like to simply archive it, I've seen some folks post it here before, I should have taken note. Thanks!
In their presentation that just posted on the IPCI website, they noted they will manufacture on a cost plus basis. That greatly reduces any cost risk on the manufacturing side for IPCI and locks in additional margin. Very happy to see that is the arrangement for a company new to manufacturing (kudos to management there). The presentation reiterated the Q4 filing time frame for the NDA, also good news. Still, I'm looking forward to the competitors launch of Seroquel on or near November 1st. After getting unnecessarily burned on the remaining strengths of Focalin it will be a nice catalyst to lock in that launch time frame of on or near May 1st for IPCI.
The MM will build options spreads even without trader activity. Over the last day, those spreads have all shifted upward significantly greater that the relativity to PPS. For example, you probably could have snagged January 2016 options with a $ 5 strike for 10 or 15 cents per last week. Today, you’d have to pony up 25 cents each at least, and the PPS is hardly different that late last week. This action is best seen visually in implied volatility constellations.
Another odd part is that April 2017 options became available yesterday, so normally you see the spreads with sooner strike date decrease or perhaps stay about the same, but not increase greater than the relativity to share price. This is where my speculation stems from, since the MM builds the spreads beyond trader activity, this shift is very odd and there must be rationale.
I'm going to be a speculating homer here, “grill” me if you want, but I think we hear something in the next 48 hours. I have no concrete evidence of course, but I have never seen such tension between PPS & options. The implied volatility has just shot through the roof today on this thing... does anyone else follow the options here and see what I do?
Sorry to sound like a J/A, I didn’t mean it like that, I just wanted to point out that those numbers don’t pass the sniff test. GL
I like sitting silent and reading others posts, but I must beg to differ here guys. I know some of you like to be conservative, but $ 20M/ yr in net revenue for IPCI means that Focalin, a generic copycat in a price war to get market share with lots of competition, is more profitable per market size than Rexista, best in class with what we know so far (no food effect, bioequivalent to Oxy, and the most abuse deterrent properties – no competitor can say all 3 which is why competition won’t hold down the profitability of this drug). The math doesn't hold up...
We are selling into 1/3 of the Focalin market with our 2 strengths, so roughly a $ 250M market, and we receive roughly $ 3.5M in annual revenue AFTER splitting with Par. If Rexista (which may change the scope of the market entirely) were merely as profitable as this generic, with roughly 10X the market size of what we are selling into for Focalin, that would be $ 35M revenue/year for Rexista under the same agreement structure/profitability as Focalin, so your estimate of $ 20M revenue/year for Rexista suggests Focalin is even more profitable than Rexista? Really, half as profitable, really? There is manufacturing, sales force, distribution etc. etc. with Focalin… so none of that can support a reasonable case for lower profitability since they will have to partner/license in a similar structure. An increase in R&D on the next products should be offset with a higher P/E ratio to recognize future growth, plus IPCI openly said they will be looking to partner for R&D on Regabatin so it probably won’t even come out of pocket. Even build in a big bump in expense, you have to admit the top line you’re all using doesn’t seem reasonable.
Bottom line, Rexista is a market disruptor and it will be much more profitable no matter how they get it to market, end of story.
Actually Musky, I don’t know and want to avoid speculation since this could be closely related to IPCI’s filing as well. I am hoping whatever product related issues it could be (perhaps food effect related as this is a growing hot topic since Pfizer’s product failed this aspect that they may not have had as much awareness to prior to their filing) IPCI has already addressed it through their studies, and any technical issues with the filing (perhaps labeling as ADF labeling is rather new as well was part of the issue but that’s not confirmed either) IPCI can learn from prior to their filing. Even though ELTP held a call on the 18th to discuss the CRL, no info has been released yet as far as I can tell, but should be released sometime soon and we can see if that has any indication on IPCI’s filing. There is a lot of chatter on the ELTP boards, but nothing with solid information so I still refrain from speculating along with them.
Perhaps when ELTP’s filing issues are released it helps IPCI ensures their filing meets FDA standards, but I believe IPCI has already worked closer with the FDA thus far in their product development to address FDA requirements, so they should already be fully aware of any potential holds up and how to address them prior to filing. This abuse deterrent formulation addresses a huge social issue, and the FDA is doing all they can to get products like these to market, so it makes sense that they would have been very clear when working with IPCI thus far. We will see if there is any potential impact to IPCI’s filing once the ELTP CRL info is released, but I wouldn’t think so prematurely.
Hey Musky, absolutely, there is no way around it, no phase 3 and no food effect are big looming issues. It is comforting at least (to me) that these potentially large issues (bioequivalency + therefore no phase 3 & no food effect) have been addressed by the company with statements regarding the successful studies on both this year. Time will tell whether the FDA agrees with the studies and these statements are “as advertised”, which will hook the rest of the potential investors. Personally, I have no pessimism towards their statements, and I am willing to take risks for potential rewards, so I won’t be waiting until re-affirmation to get in and miss a run from this level (assuming you feel similarly otherwise you wouldn’t be here, am I right!).
Until this is fully commercialized there will always be battles, such as debating with investors who prefer the most conservative approach, and others who have merely grown impatient. All you can do is post news in the timeliest manner, offer your opinions, touch a few people who haven’t made up their mind, and continue to shower this board with the end state for those that are simply holding with no other intentions. You have done all of these very well, no sense in giving up now! I know you’re tired about fighting the uphill battles day in and day out, but you share my feelings as my optimism has only grown in the past couple of months.
The big picture is really getting focused as of late, the timeframes have become more and more defined (closer to the filing/understanding of FDA timeframes from then on), it is clearer how big of a deal the food effect is and abuse properties are to differentiate Rexista and gain market share, and people are getting a better grasp of the value (not just market share, but AngelaFoca has done a great job of digging up margin estimates based on a prior deal for a competitor that far exceeded my conservative estimates especially given how IPCI has let their product progress to sign a more favorable deal), cash is no longer a concern, etc. Whether you are trying to be as conservative as possible (Tekterra/Samsa – calling it like I see it guys, seriously no offense it is a reasonable approach to bring balance), or as accurate as possible (you/AngeloFoca), we’re dealing with very big numbers! Again, for any other readers, play with the numbers however you like based on your own assumptions (this is a better visual than what I had posted before), but most likely you’ll be surprised how big of a number you are looking at considering the main focus of this is just adding Rexista, nothing else!
Conservative
Market Size 2,300,000,000
Market Share X 15% = 345,000,000
IPCI Proft Share/Margin X 15% = 51,750,000
Plus ANDA Revenue 3,500,000
Less Operating Expenses (11,000,000)
Before Tax Earnings 44,250,000
Less Taxes X (1-26.5%) = 32,523,750
Divided by Shares/O / 28,600,000 =
Earnings Per Share 1.14
Earnings Multiple X 12.00 =
PPS 13.65
Aggressive
Market Size 2,300,000,000
Market Share X 25% = 575,000,000
IPCI Proft Share/Margin X 30% = 172,500,000
Plus ANDA Revenue 3,500,000
Less Operating Expenses (11,000,000)
Before Tax Earnings 165,000,000
Less Taxes X (1-26.5%) = 121,275,000
Divided by Shares/O / 28,600,000 =
Earnings Per Share 4.24
Earnings Multiple X 18.00 =
PPS 76.33
I'm not so much looking forward to the filing in August, but rather the acceptance of it shortly after. It creates a definitive timeframe for this NDA, investors can count on that much more than the ambiguous timeframes of the past, and can see the revenue at the end of the tunnel and the more technical folks can start to factor in success rates and discounting for time periods until the decision date. The company is still losing money, so the ANDA’s aren’t enough to generate the kind of interest we’re hoping for nor a real valuation, but this NDA is a much different story. Obviously it isn't easy to explain and mostly my opinion, I value this company higher than it is, which I why I have an investment in it. Your questions are valid and I am not discrediting them at all, I’ve had those questions myself, and my response is just how I believe this will play out. I'm sure I'm not bringing you the comfort you seek, but keep in mind, there have been quick 10 baggers before IPCI, and will be after... simply because the market doesn't price these right more often than you think.
I believe the validating moment will be upon FDA acceptance of the NDA filing. Until then, I don’t believe IPCI has validated themselves to the market enough yet to generate a comparable valuation (the $ 3.00 - $ 4.50 range based on comps is again at that timeframe). It’s hard to compare until then since that is pretty concrete evidence the market would look for as to where they are in terms of establishing a new timeframe to market. While ELTP and PTIE have both already had that confirmation and the market acknowledged that catalyst, IPCI is still a couple months away. If at that time we are still lingering far below comps in terms of valuation, I too will think I must be missing something. Until then, it is the steady as she goes waiting game it has been for some time now.
Just to put the current valuation into perspective, ELTP's primary product candidate is a direct competitor to IPCI's, ELTP got some bad news and just got hammered on the market today, and is still valued with a $ 150 M market cap. IPCI, who will now presumably get to market before them with a superior product, is still only valued at $ 45 M. Comparison logic would say IPCI should be at least $ 4.50/share, once filing is accepted, but that's based on a simple comparison.
Another direct competitor would be PTIE. As most of us here know they have had many struggles with their product, which has led to partnerships falling apart as well. Even they are value at over $ 100 M market cap when they have to concede 9+ % to Durect plus split their earnings with whomever they partner with for commercialization and their product candidate is merely in the queue (where IPCI's will be for months after filing is accepted), so this comparison would suggest at least roughly $ 3/share for IPCI at that time. Neither ELTP/PTIE other pipeline products exceed IPCI's terms of potential value (rather IPCI's is much better), and IPCI's product has not had the issues of their competitors’ products meanwhile offering more from an ADF perspective, so this is probably a very conservative comparison to predict a range of $ 3 - $ 4.50 in the next few months as the filing is processed/accepted for review (not considering any other potential catalyst).
It appears like IPCI had worked a lot closer with the FDA as they have progressed with their product candidate, so they should be well versed in how to file this NDA successfully. If the market won’t price this accordingly in the meantime, I’ll be among those who will wait until final approval (perhaps 8 months away at best guess) where it certainly will be valued based on market valuation principles rather than speculation.
Amigo, great call out on the taxes part, this is what discussion boards are for! I did some research and I believe IPCIs tax rate is 26.5% (Canada is a little odd, but I believe if you piece together their providence taxes this is what you get, which is a good tax rate when compared to the US). So in essence just add a X .735 to the end of the formula to incorporate the after tax earnings and get your end share price.
While you are using the broad market of $ 768M as a topline figure, please remember IPCI currently only has 2 strengths which represent 1/3 of that market, so when comparing (let's use round numbers) that brings the real market they are addressing to achieve current revenues down to $ 250M. Their market share of that new pie has stabilized around 33% according to their latest report, so again round that for simplicity to $ 80M in gross sales for Par. Since IPCI received just $ 3.5M, we can back into margin and by doing so we can see Focalin generates just over 4% margin, typical of low cost generics (and likely why it is taking a while to get someone to bite on Keppra, since it has such a small market in comparison to their other ANDA’s – a problem I don’t see them having with their other ANDA’s once approved). This also means that in your valuation you're not only using the full market of Focalin when they are truly in just 1/3 of it, but you are also extrapolating that low generic 4% margin for a potential best in class NDA... which after pointing this out I hope you will see this is simply not logical. If I absolutely had to speculate what IPCI’s post – split margin would be, I would say 15% of gross sales, but that is purely my opinion based on my research for the product at hand, everyone here can come up with their own number, I’m just advising caution about using Focalin’s 4% as a baseline if you wanted to be accurate.
The formula should be Market Size X Market Share X Post Split Margin + ANDA Revenues – Operating Expenses X Market Multiple / Shares Outstanding = Share Price. Plug in any variable you want, but just as an example for where I believe we sit this time next year with Rexista commercialized I’ll use $ 2.3B market, 20% market penetration, 15% post - split margin, $ 3.5M existing ANDA revenue (though I think we can all agree we better have more by this time!), $ 11M annual operating expense, 12X market multiple, 28M shares outstanding. (2.3B X 20% X 15% + 3.5M – 11M) X 12 / 28M = $ 26/share. Again, this is just an example of valuation based on how they currently are structured to receive revenues, feel free to use any variable assumptions you like (for example if you go with a 15% market share and 10% post split margin you get about $ 11.50/share, or if you go with 25% market share and 20% margin you get $ 46/share), some may be more conservative, and some more aggressive, but this is a pretty standard valuation given the information I am aware of (feel free to rip it apart if you disagree, I am all about a debate and am not conceded enough to believe I have the magic numbers). I figure any additional costs for further product development will likely be offset by development partnerships such as what they hinted towards with Regabatin, or should be offset by a higher earnings multiple to consider future growth. Happy debating! I apologize to those of you who hate math and this bores you!
“Wonder how the market will react when we pass end of July without NDA-Filling?”
I wonder as well. Will anxiety prevail and punish this guy or will the market believe that the filing is so close a few more days/weeks is immaterial in the grand scheme of things? It would be an interesting event to see to say the least (not that this stock hasn’t already been interesting!).
However, I highly doubt we will ever see it actually play out that way. I’m expecting they have a quarterly update coming in mid-July or so. Back in April when they communicated “the next three months”, while it sounds concrete, in this world of development/project management, that’s rather ambiguous. I would expect a solid update during their quarterly in mid-July to re-align expectations which will give shareholders & the market a much more accurate filing date.
In that quarterly update, if they are not on track and/or they leave an ambiguous timeframe, the concern will show in the stock price. If they are on track and it will take just a few weeks after the quarterly update or less, I think you see the uptrend take off immediately from that point. I just think that tipping point will be mid-July after the quarterly update gives us all a better indication of status rather than the end of July which would be the run-out of the last communication in April. Good luck!
"SeroquelXR is far and away the only potential blockbuster of the bunch!"
I'm not so certain (in a positive way), I've been reading for a while now how big of a deal Seroquel is, and I definitely agree, but I'm going to give some love to another ANDA in their pipeline. A year ago Glucophage (indication for diabetes) had a market of $ 905M vs. a Seroquel market of $ 1.3B. The last I saw, both Glucophage and Seroquel had market sales of $ 1.3B. To me, that suggests that while Seroquel formerly had the largest market in terms of sales, the 40%+ annual sales growth of Glucophage has gone quietly unnoticed by many and could easily have a larger market than Seroquel (which sales remained relatively flat year over year) today. IPCI's Glucophage ANDA was filed back in 2010 so is still one of those "any day now" type of deals, and with a market of $ 1.3B and growing fast, it will merit a lot more attention and shareholder value than say the $ 168M market for Keppra. Competition on one vs. the other will surely play a factor, but thought 40%+ growth was worth a call out.
If he's predicting just a 10-15% drop in price, and acknowledging the chance of a pop, he's probably long the call options, it just makes sense (and there is hardly a material open interest in the puts). Look at the October calls, you can probably snag them at .35 or .40 per share. By October, we will see at least the Rexista filing. Compare that to PTIE who is only at that stage and is valued over $ 100M for nothing more than IPCI has to offer (no current revenue/less ANDA & NDA pipeline potential) and IPCI's NDA is best in class (pre-PODRAS even). That's $ 4+ per share as a low ball comp in my opinion (which I believe a filing/acceptance will generate enough market interest to get there). Let's say this goes to $ 5.50 because that number has been thrown around so much, if he snags .40 Oct's, he'll bank a 750% return, while the long shares still generate 300%. If he believe's there is any chance at a pop, he wouldn't be short calls anytime after June/July (July cutting it very close), that would be silly. If the thought is nothing will happen until then, he could be short a some June/July calls and make a few bucks easy. Needless to say, there is big opportunity here.
Just seems like a very peculiar recommendation given the claimed perspective. A recommendation to wait for another mere 10-15% drop to simply doesn't seem justifiable given the risk of missing XXX% gains on simple news that we all expect coming in the near term (perhaps a few months, perhaps longer).
In contrast to waiting for a 10-15% drop, almost anything will erase that opportunity to buy lower. It doesn't matter if it is a surprise new ANDA approval, partnership on Keppra, approval of the remaining doses of Focalin, submission of Rexista NDA, partnership on Rexista, or what I haven't heard many talk much about yet is a partnership on Regabatin which the CFO has mentioned will happen as they will pick up the development of this NDA right after Rexista is filed and will seek partnership to fund such activities. In order to play this equity from as many facets as you in order to not miss a catalyst hit you would need much more capital than many here presumably have. Sure, likely nothing much will happen tomorrow, or next week, or in the next month for that matter, but 10-15% doesn't seem like enough value for someone with less capital who can simply be long or wait on the sidelines for a price drop.
I can understand the methodology you are perhaps using as a hedge strategy, but like I said, your recommendation may only work for a select few who have the capital to do so, and not the majority of investors across this board, would you agree? I'm surely not here saying $ 1.50 is out of the realm of possibility, after all cash is a near term concern and even though they are proven very frugal, no monetary earnings events means they need to sell at least some shares for financing and that may be enough to send it pass support and reach $ 1.50. But I will say candidly that no one is here to make 10-15%... so why would they risk it (unless you have enough capital to hedge a long positions say via options)? I've seen a lot of people make snarky comments about you potentially making a lot of money if this goes to $ 5.50, while we continue our conversation I just want to remind people about how options can help one leverage their position take advantage of volatility in a either direction or both directions simultaneously, so a blunt 67k shares isn’t necessarily the mode here.