Elite Pharmaceuticals Inc (ELTP)

[no2koolaid]

So you think we wait another 2 years

More or less...

There are a number of things converging in 2023...the poison pill ends in November 2023 and four ANDAs (two for 2022, two for 2023) are expected to be approved or at least filed, according to Nasrat. It is reasonable to suggest that the four additional ANDAs will increase Elite’s revenues substantially; this would be particularly true if a generic Vyvanse is included among the four. Vyvanse goes off-patent in 2023 and has a market share greater than Concerta and Adderall IR & XR COMBINED. If, in FY 2022, Elite is expected to generate revenues > $30M, four more ANDAs could mean roughly tripling revenues. And that is not factoring in the Dexcel partnership with the potential EMA/EU approval for Adderall IR.

So, if keeping score at home that potentially amounts to more than $100M in annual revenues and does not account for the reality that it takes time to hit peak market penetration, as the Walgreen’s emergence of XR suggests. Then there is always the Mikah held portion of the SunGen split that Nasrat has said Elite will buy when it has sufficient retained capital, which will add revenues (but remember, Elite gets manufacturing revenues for ALL its IR & XR products. So, that revenue share will not double and it is also why the cost of buying the SunGen share from Mikah is far less than imagined).

Finally, as investors well know, Nasrat’s only exit is through M&A. And, as business strategists know, acquirers do not wait until companies fully realize their development, as that makes them more expensive. Rather, they look for that Goldilocks moment when business development can be quantifiably forecast and then they make an offer that will provide a premium above whatever the share price might be at the time. That is why, to me, 2023 is the Goldilocks moment.