Thanks for that post, really helpful.
After reading all the material and in the spirit of being constructive i will add a few risks I can think of:
1. the patch is the least used and least effective method for the 24/7 programs. Possibly because it is drug related rather than alcohol.
2. Margins clearly indicate the company relies on the government programs and spending as opposed to private business spending. Positioning the company in the medical field will require capex and an uncertain payoff.
3. are managers wise capital allocators. I noticed the updated esop, which is a large negative at these price levels. For the recent past they have been building cash balances. Will be of utmost importance where each dollar is used and the return on each dollar that can be expected.
4. I am really not sure about the patent situation. David kidwell, the inventor, filed a patent 20 years ago. assuming no extensions have been granted, the patent should be expiring soon.
On the positive end.
1. The company has outsized margins and requires very little capital
2. The 2017 court case was decided in their favor
3. Tailwind from gov cracking down on opioid abuse
I will keep my eye on this situation. As you said, they report a whole 2 years after results have been booked, which adds a hitch to any analysis that can be done. Thanks again for your help, looking forward to your comments.
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