Elite Pharmaceuticals Inc (ELTP)

[kayak_wench]

It will not take 5 years for Oxycontin to be sold as a generic. It will probably be at most a year and Elite is poised to enter that market early. Maybe not as the first but as early as they can without being the first. There is also the recent blood pressure medicine. That will also roll out in within a 5 year window, probably not more than 3 years. Those two items alone mean that the 5 year return on buying Elite will be attractive. Someone will absolutely look at those two known events and factor it into their assessment of the value of Elite.

But a sale of the company before the end of the year depends on the price Nasrat and the board are looking for. In last call he said he would only put the company up for sale if the valuation the M&A firm reached was agreeable to him and the board. He also said they would decide about phase two in 3 to 4 months.

Now on top of all of this, we need an independent M&A firm that we hired who will audit everybody and then come up with their own projections and models for the valuation. That becomes Phase 1. Next step is Phase 2. If the numbers they come up with are agreeable, then we'll give the M&A firm a green light to move forward and find a suitor..... We will decide if we will enact Phase 2 within the coming 3 to 4 months.

We got past the first hurdle of the independent M&A firm valuing the company over the 'desired' buy out number.

Here is exactly what Nasrat said at the end of yesterday's call (I capitalized the words that Nasrat vocally stressed).

"Our M&A partner IS working on finding us a suitor. IF an acceptable offer is presented today, we will be more than happy to consider it. But if not, we will wait another quarter or two to show realistic revenues and profits that include Lisdex and show the trending for the sales of Lisdex which would take the guess work out of how much the company is really worth"

Note they aren't looking to rush the sale they have a strong believe that our revenues and profit will continue to grow through the end of the year further justifying a buy out at the price they are looking for. So no one here should worry about a decrease in sales and profit in the Nov CC.

What Nasrat probably will not tell us is the share price the board wants, but we know the M&A firm's estimate reached that. He will also not tell us what the range of values the M&A firm reported. Remember he did that for Sequestox and that information was weaponized against him when Sequestox failed to launch. If he revealed that value we would certainly have a spike up in price but if the M&A didn't go through and we instead to an uplisting that would have a negative impact and probably bring the share price lower than it would have been otherwise causing more dilution. So as a long-term investor I support him holding that card close to his chest.

In the meantime we need more interest from financial analysts pointing out the value in Elite (ones other than Zach's). If we get one or two articles about Elite being 'for sale' and a possible sale going through we would definitely see a price increase. I really think those articles will be coming soon now that Nasrat has formally told us the company is being shopped around.