Elite Pharmaceuticals Inc (ELTP)

[no2koolaid]

A funny thing happened while on sabbatical from this board…I found two things relevant to Elite shareholders that I wanted to share. Here they are:

First, as noted in this article on Seeking Alpha… https://seekingalpha.com/article/4372566-lannett-using-swot-analysis-to-assess-company

As to the CNS drug category, YOY 2020 v. 2019 CNS drugs were Lannett’s second-largest revenue producing category and had the second-largest sales volume increase among its drug categories. Specifically, LCI experienced a 31 percent increase in CNS drug sales in 2020 v. 2019 before the commercialization of Amphetamine XR. LCI also has an agreement with Andor Pharma to distribute generic Concerta (Methylphenidate ER), which is a CNS drug with an IQVIA U.S. market of about $1.5 billion and was launched in May 2019.

So, there is little doubt that whatever the next big CNS generic Elite is working on, it is not Concerta. It would make no sense to develop a drug that competes with your biggest partner. Rather, the CNS generic Elite is looking to develop is a complementary CNS generic product that would enable LCI to use their commercialization capabilities to continue the success they have had selling CNS drugs to big retail chains.

Second – Remember the four pain meds Elite sold to Nostrum in November 2019 for $1.2M? No? Well, here they are…

Sale of ANDAs for Oxycodone Hydrochloride and Acetaminophen, USP CII (generic version of Percocet®). In November 2019, approved ANDAs for a generic version of Percocet® (oxycodone hydrochloride and acetaminophen, USP CII) 5mg, 7.5mg and 10mg tablets with 325mg of acetaminophen were sold to Nostrum Laboratories Inc. (“Nostrum”) for cash consideration totaling $300,000.

Sale of ANDAs for Hydrocodone bitartrate and acetaminophen tablets USP CII (generic version of Norco). In November 2019, approved ANDAs for a generic version of Norco® (hydrocodone bitartrate and acetaminophen tablets USP CII) 2.5mg/325mg, 5mg/325mg, 7.5mg/325mg and 10mg/325mg tablets were sold to Nostrum for cash consideration totaling $300,000.

Sale of ANDAs for Methadone hydrochloride tablets (generic version of Dolophine). In February 2020, approved ANDAs for a generic version of Dolophine® (methadone hydrochloride tablets, 5 mg and 10 mg) were sold to Nostrum for cash consideration totaling $300,000.

Sale of ANDA for Hydromorphone HCl tablet (generic version of Dilaudid). In February 2020, the approved ANDA for a generic version of Dilaudid® (hydromorphone hydrochloride tablets, 8mg) were sold to Nostrum for cash consideration totaling $300,000.
Sale of ANDAs for Phendimetrazine tartrate tablet (generic version of Bontril). In February 2020, approved ANDAs for a generic version of Bontril PDM® (phendimetrazine tartrate tablet, 35 mg) were sold to Nostrum for cash consideration totaling $300,000.

Recall the enmity the sale evoked amidst charges that Elite’s shareholders were robbed because the alleged aggregated p/year revenue value was $50M? Of course, this SWAG was unattended by any formula that gave it credence. Then, again, without any data offered in support, the value magically became $100M p/year and shareholders were told they should rise up in defiance of Elite’s CEO and management. However, I remember that the allegations were unencumbered by recognition of time to peak revenues, as if Elite could be raking in $100M+ right now. And, also missing was the recognition of the need for a partner to commercialize those drugs in a saturated market with socio-political-legal issues. But, as the allegations were formed in a fact-free zone that sought to inflate emotions rather than answer questions credibly, should we expect anything less?

Speaking of facts, I could not help but wonder how well Nostrum is doing with those four pain meds. However, Nostrum is a privately held company and the evidence of revenue generation is not readily available. Nonetheless, as Yogi Berra would say, one can learn a lot by observing. So, I checked their website and, to my surprise, missing from among the drugs Nostrum listed in their product portfolio were the four drugs they bought from Elite! How is it that Nostrum could fail to see the obvious revenue generating benefits of the four $50-100M drugs they bought from Elite?

Just to provide evidence, here is Nostrum’s website and their product portfolio that is missing the four drugs they “stole” from Elite:
https://www.nostrumlabs.com

Acetazolamide Extended-Release Capsules, 500 mg – 100 count

Calcium Acetate Capsules, 667 mg (EQ 169 mg of Calcium) – 200 count

Carisoprodol Tablets USP, 250mg (CIV) – 30 count

Carisoprodol Tablets USP, 250mg (CIV) – 100 count

Carbamazepine Capsules Extended-Release Capsules, 100 mg – 120 count (Med guide)

Carbamazepine Capsules Extended-Release Capsules, 200 mg – 120 count (Med guide)

Carbamazepine Capsules Extended-Release Capsules, 300 mg – 120 count (Med guide)

Dapsone Tablets USP, 25 mg- 30 count

Dapsone Tablets USP, 100mg – 30 count

Elixophyllin Elixir (Theophylline Oral Solution, USP) 80 mg / 15 mL, 16 ounces (Labelling)

Metformin Hydrochloride Extended-Release Tablets, 500 mg - 60 count (Med guide)

Metformin Hydrochloride Extended-Release Tablets, 1000 mg - 60 count (Med guide)

Nitrofurantoin Oral Suspension, USP, 25 mg / 5 mL, 240 mL (Labelling)

Pindolol Tablets USP, 5 mg - 100 count

Pindolol Tablets USP, 10mg -100 count

Piroxicam Capsules USP, 10 mg – 100 count (Med guide)

Piroxicam Capsules USP, 20 mg – 100 count (Med guide)

Piroxicam Capsules USP, 20 mg – 500 count (Med guide)

Promethazine Hydrochloride Oral Solution, USP 6.25 Mg/5 mL (Labelling)

Promethazine Hydrochloride and Codeine Phosphate Oral Solution, USP 6.25 mg and 10 mg /5 mL (Med guide) (Labelling)

Sucralfate Tablets USP, 1g – 100 count

Sucralfate Tablets USP, 1g – 500 count

Theophylline (Anhydrous) Extended-Release Tablets, 400 mg – 100 count

Theophylline (Anhydrous) Extended-Release Tablets, 600 mg – 100 count

Venlafaxine Hydrochloride Extended-Release Tablets, 150 mg (base) - 30 count (Med guide)

Venlafaxine Hydrochloride Extended-Release Tablets, 150 mg (base) – 90 count (Med guide)

Venlafaxine Hydrochloride Extended-Release Tablets, 225 mg (base) - 30 count (Med guide)

Venlafaxine Hydrochloride Extended-Release Tablets, 225 mg (base) - 90 count (Med guide)

The only thing left to say is PERIOD!