Elite Pharmaceuticals Inc (ELTP)

[WeeZuhl]

q12h as causation for increased dependence and eventual addiction

q4 or q12 makes no difference. I've had patients who I inherit after they've been taking Percs (or whatever) for years, and when I suggest a wean off, they drop them without every looking back. I have other patients who get 1 prescription from their orthopedist and take it as directed for a month, and when I try to get them off of it, they go through true physical withdrawal- including tachycardia, nausea, vomiting, diaphoresis, rebound pain. No way to tell who's who, but definitely a genetic component. Addiction is a family affair.

KMPH's market value has decreased by over $100mm on this news. Based on this valuation decrease it must be concluded that KMPH investors anticipated and priced in an adf label before yesterday's news.

Can anyone recall a company getting a drug approval that was so disastrous? To get a full understanding of what happened to Kempharm yesterday, go look at their website. The entire company stands on one leg, and they got knee-capped. Every drug they are developing is based on the exact same pro-drug platform to prevent abuse. Had it worked as envisioned, it would have been a blockbuster. But it was only marginally successful, and without ADF label, KP201 is very expensive generic Norco. Their entire pipeline just went back to the drawing board. I believe the technology still has potential and the company (or at least the tech) may survive, but I cannot see cause for many green days in the near future for KMPH. It is not that approval was baked-in. It is that without ADF label, they have nothing.

Notice also on their site that for each opioid agonist in their pipeline they have to create new ligand pro-drug. ELTP 2 bead modular tech works for every agonist without modification.

These facts suggest that an ADF label has been priced into the market for ELTP, and actual approval of that ADF label may not result in the huge increases in valuation some are predicting, and failure to obtain the same could cause a decrease similar to that experienced today by KMPH.

Obsessive focus on the price after approval may cause one to miss the importance of the approval with ADF label as validation of ELTP technology. Kempharm is a timely example of how important (read: valuable) the ADF label is. If one cannot get beyond thinking about the extent of "the pop" on approval, then it is clear the ramifications of the pending FDA decisions are not fully understood.

Failure to obtain ADF label would be similarly ugly day for ELTP and the 2 bead technology. We would have no business competing with generic oxy without an ADF label. Without the ADF's, I would be left with the downside of my investment, which, lucky enough, is exactly what I came looking for when I found ELTP in 2011- a development-stage generic pharmaceutical company.

I've posted the science to look at. The tech is solid, maybe the best available. Make sure to understand what ADF's can and cannot do, and if one decides to bet on an ADF, I like the odds here. No more versatile platform for the money. And go ahead and have fun and flip some shares if it goes our way. Maybe I will, too. But that day is just the beginning, and the price on that day will be of little relevance to me beyond the smile on my face.