Replies to post #283369 on Elite Pharmaceuticals Inc (ELTP)

[mrwrn2010]

Generating some money is clearly better than generating none, yes. Most R&D companies make $0 and simply burn cash until they get approvals, acquired, or go under. Elite can offset some of its R&D costs with the generic side of the business which removes risk.

I don’t think anyone is here solely because of the small generic products they are currently selling.

[tenor15824]

Yes and you know where the bulk of that profit came from - One time target income.

[Chasing]

prove it

Do you know how many longs here boasted about how great their income was in 2016? When they were an R and D company?

[no2koolaid]

Amidst the discussion about what a pharma company will not pay for Elite there is much to learn from the world of M&A.

Allergan completed an agreement to acquire nano-cap Tobira Therapeutics for $28.35 p/s in upfront cash, a whopping six-fold premium to the September 19, 2016 close of $4.74 p/s. And, imagine this, Tobira had no approved products and only $1,053 (that is correct, one thousand fifty three dollars) for a licensing fee. And, here is the interesting part – Allergan still has no revenues generated from that acquisition.

How about Gilead’s purchase of Kite in August 2017 for $11 Billion, while Kite had $22 Million in revenues for 2017 and their cash burn was $330 Million. Ah, that means they were losing money.

In January 2018, Celgene bought Juno for $9 Billion after Juno had failed in a P-3 putting the company 2 years behind its development of its lead drug JCAR17. Oh, it has no approved drugs or revenues beyond the fees previously paid by Celgene. And, they were burning through cash like there was no tomorrow trying to get through necessary R&D.

I suppose I could continue but why bother? I do not have to explain it to an Elite investor.